Spot prices challenged the US$280-per-oz. level during the first few days of the new year, and the London morning fix of Jan. 7 was holding steady in that region. The U.K. gold auction of Jan. 9 was the focus of attention.
In the first week of the year, gold moved toward support in the US$277-to-278-per-oz. region in the wake of encouraging U.S. economic figures.
Local dealers report that physical demand in India is sluggish, owing to the political environment; the next wedding season, however, starts Jan. 15, which generally boosts consumption.
Part of gold’s buoyancy is attributable to a small retreat in the dollar against both the euro and the yen. This is partly a result of comments made by the Chinese finance minister, to the effect that the country should consider increasing its euro holdings.
Elsewhere in the foreign exchange markets, the Argentine government says it will start renegotiating its foreign debt with creditors in early February. The government also devalued the peso by almost 30%, thus severing its link to the U.S. dollar.
In the U.S., the Bureau of Labor Statistics reported that non-farm payroll employment decreased by 124,000 over the month and by 1.1 million over the last four months of 2001, with unemployment rising to 5.8%. In December, job losses continued in manufacturing, transportation and trade; these losses were partially offset by employment gains in services and government.
Meanwhile, the Chinese Metallurgical Construction Company (MCC) is to take over Pakistan’s Saindak project, the only copper-gold mine in the country, on Jan. 18. Operations are expected to commence in February, with commercial production targeted for before year-end. MCC will pay the Pakistani government $500,000 per month over 10 years plus half of total revenue from mineral sales. Average annual output over a 20-year life is expected to consist of 45,000 oz. gold, along with nearly 16,000 tonnes copper and 90,000 oz. silver.
— The preceding is from the London-based World Gold Council.
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