The third quarter of 2019 was eventful for the gold sector, with two interest rate cuts from the US Federal Reserve, a price rally and subsequent pullback and lots of speculation.
The yellow metal started Q3 trading at US$1,383.70 per ounce and trended higher for the majority of July. As of August 1, gold was at US$1.445.10 and spent the rest of the month picking up momentum.
However, the September story was slightly different, as the precious metal started the 30 day cycle at US$1,528.50, then slipped to US$1,482.20 to end the three month period.
Gold price update July: Six year high
Ongoing geopolitical concerns between both the US and China, and the US and the Middle East, brought investors flocking to the safe haven metal in July, raising the price of gold by 3 percent for the period.
The month’s major headline was the official launch of the joint venture project between Barrick Gold (TSX:ABX,NYSE:GOLD) and Newmont Goldcorp (TSX:NGT,NYSE:NEM) in Nevada.
Dubbed Nevada Gold Mines, the partnership is now the world’s largest gold complex. Barrick holds a 61.5 percent stake in the new project and acts as the operator, while Newmont owns 38.5 percent.
Mid-month, gold hit a six year high of US$1,445.50 on continued concerns that trade tensions might lead to a global economic slowdown.
In July, Jonathan Butler, an analyst for Mitsubishi (OTC Pink:MSBHF,TSE:8058), noted that investors were holding their breath ahead of the seasonal summer slowing of the resource sector.
“Everything revolves around gold right now. The key trend is for gold to convince the investing community that the recent six year high, breaking out from overhead resistance, is the beginning of a major move to the upside,” he said. “Once investors return to the precious metals, silver will catch up and most likely overtake gold, bringing the gold silver ratio back to a level of 70 to 1 or lower.”
Following a slight dip after hitting its six year high, the yellow metal finished the month at US$1,413.40.