Silver was more volatile, briefly jumping above the $52 per ounce level.
The precious metals were under some pressure on Thursday (November 20) following the publication of US jobs figures from September. The Department of Labor report, which was delayed due to the government shutdown, came in stronger than expected, with nonfarm payrolls rising by 119,000 this month.
That’s more than double the 50,000 profit estimated by analysts.
Have the job numbers tempered expectations that the US Federal Reserve will cut interest rates at its December meeting, as per the minutes of the central bank’s last meeting.
The minutes highlight the disagreement surrounding October’s interest rate cut. They also say that while “several participants” believe a rate cut next month could be appropriate, “many” disagree.
Fed Chairman Jerome Powell previously said a cut in December is not a “foregone conclusion.”
Apart from that, the minutes indicate broad approval for the end of quantitative tightening (QT) on December 1. Adrian Day of Adrian Day Asset Management recently highlighted the end of QT and said he sees a potential move to quantitative easing (QE) on the horizon.
Here’s how he explained it:
“(Powell) basically announced that as of December 1st there will be no more QT – okay. He also said that all the money from mortgage-backed securities that are rolling over, that are maturing, will now be put back into government bonds. Excuse me, well, that’s starting to look a lot like QE to me, or the beginning of QE.”
Day went on to say that he previously thought QE would start sooner, possibly this fall, but that the government shutdown appears to have postponed this.
“I think this will be the big story for the next six months,” he added.
Bullet briefing – Barrick faces turmoil, MP seals Saudi refinery deal
Barrick Mining is facing more turmoil
Turmoil for major gold and copper producer Barrick Mining (TSX:ABX,NYSE:B) continued this week after a series of corporate developments made headlines.
First, Reuters reported this that Barrick’s board is considering splitting the company into two different entities: one focused on North America and the other on Africa and Asia.
Four sources familiar with the company’s thinking told the news outlet that Barrick’s African assets could also be sold outright, as could the Pakistan-based Reko Diq mine.
This would essentially undo Barrick’s merger with Africa-focused Randgold Resources in 2019.
Barrick did not respond to requests for comment, but news emerged later in the week about activist investment firm Elliott Investment Management took a “big bet”. in Barrick.
Sources told the Financial Times that Elliott is now one of Barrick’s top ten investors, meaning his stake is worth at least $700 million. Elliott has not shared any information about what Barrick would like to do, but is reportedly “encouraged” by the idea of splitting the company in two.
Barrick has faced numerous headwinds recently, including the seizure of a major gold mine in Mali and the departure of CEO Mark Bristow. Bristow, who took over at Barrick after it joined forces with Randgold, abruptly stepped down in September after facing criticism.
Although Barrick’s shares are up just over 130 percent this year, the company has underperformed compared to its peers in the gold sector.
Bristow isn’t the only person to leave Barrick lately; the latest news from the company this week is that two senior managers and a top manager have left. CEO Mark Hill announced the changes in a memo seen by Bloombergsays the company wants to evolve its business model so that it is aligned with the company’s strategic priorities.
The latest rare earth deal from MP Materials
Rare earth miner MP Materials (NYSE:MP) and the US Department of Defense are working together on a strategic joint venture with Saudi Arabian Mining Company (Maaden).
The deal, which will see the three entities collaborate on a Saudi Arabian rare earth refinery, comes after the US and Saudi Arabia signed a strategic framework to secure crucial supply chains.
The refinery will process rare earth raw materials from Saudi Arabia and elsewhere and will be able to produce both light and heavy rare earth metals, which are crucial to many high-tech industries.
Under the Trump administration, the US has stepped up efforts to break Chinese dominance in rare earths, strengthening its relationship with MP Materials in July. agreed to buy $400 million in preferred stock in the company, a move MP Materials called a “transformational public-private partnership.”
Shares of MP Materials are up more than 250 percent this year.
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