Gold falls on technical pull back
Ashanti to move ahead with mine financing deal
By Myra P. Saefong, CBS MarketWatch
Last Update: 5:35 PM ET Feb 17, 2000
Futures Movers
Agriculture Outlook
NEW YORK (CBS.MW) -- Gold futures fell by late Thursday in a
technical pullback from a four-day high, pressured by Ashanti's
confirmation of an agreement that will likely lead to additional production.
April gold closed down $1.20 to $303.80 on the
Commodities Exchange division of the New York
Mercantile Exchange, after hitting an intraday high
of $312.50, while March silver fell 4 cents to
$5.265 an ounce.
"I view it as more of a technical move," Dave
Meger, senior metals analyst at Alaron.com said.
"The floor did not make any significant comment on
any big noted sellers and that was really pressing
the market lower today."
The only fundamental factor in view was
Wednesday's news on Ashanti Goldfields (ASL:
news, msgs). "It looks like the Ashanti deal went
through," he said. Ashanti shareholders agreed to
withdraw legal action that had been preventing the
gold producer from entering into financing
agreements, according to Meger. This allows
Ashanti to make a deal with financiers on a $100
million loan and proceed with the completion of the Geita mine in
Tanzania.
If that deal had fallen apart, that could've been favorable to the market,
but now that Ashanti is much closer to those financing arrangements and
much closer to the idea that they won't have to be buying back hedges --
"it's negative because they aren't going to have to buy in the marketplace,"
Meger commented.
Meanwhile, reduced gold-producer hedging and the recent strength in the
platinum group boosted gold to a four-day high early Thursday.
Last week, Placer Dome (PDG: news, msgs) said it had completely
suspended its hedging program, implying confidence in gold's present
value, while Barrick Gold (ABX: news, msgs) announced a reduction to
the total amount of ounces committed to its gold sales program.
In other metals highlights, palladium pulled back from a near two-week
rally on tight supplies that has brought prices to an all-time high on the
Nymex.
Ashanti to move ahead with mine financing deal
By Myra P. Saefong, CBS MarketWatch
Last Update: 5:35 PM ET Feb 17, 2000
Futures Movers
Agriculture Outlook
NEW YORK (CBS.MW) -- Gold futures fell by late Thursday in a
technical pullback from a four-day high, pressured by Ashanti's
confirmation of an agreement that will likely lead to additional production.
April gold closed down $1.20 to $303.80 on the
Commodities Exchange division of the New York
Mercantile Exchange, after hitting an intraday high
of $312.50, while March silver fell 4 cents to
$5.265 an ounce.
"I view it as more of a technical move," Dave
Meger, senior metals analyst at Alaron.com said.
"The floor did not make any significant comment on
any big noted sellers and that was really pressing
the market lower today."
The only fundamental factor in view was
Wednesday's news on Ashanti Goldfields (ASL:
news, msgs). "It looks like the Ashanti deal went
through," he said. Ashanti shareholders agreed to
withdraw legal action that had been preventing the
gold producer from entering into financing
agreements, according to Meger. This allows
Ashanti to make a deal with financiers on a $100
million loan and proceed with the completion of the Geita mine in
Tanzania.
If that deal had fallen apart, that could've been favorable to the market,
but now that Ashanti is much closer to those financing arrangements and
much closer to the idea that they won't have to be buying back hedges --
"it's negative because they aren't going to have to buy in the marketplace,"
Meger commented.
Meanwhile, reduced gold-producer hedging and the recent strength in the
platinum group boosted gold to a four-day high early Thursday.
Last week, Placer Dome (PDG: news, msgs) said it had completely
suspended its hedging program, implying confidence in gold's present
value, while Barrick Gold (ABX: news, msgs) announced a reduction to
the total amount of ounces committed to its gold sales program.
In other metals highlights, palladium pulled back from a near two-week
rally on tight supplies that has brought prices to an all-time high on the
Nymex.
