Gold reached yet another record high at the end of last week, crossing US$2,500 per ounce for the first time.
The yellow metal stayed above that key level until experiencing a pullback on Thursday (August 22), but breached US$2,500 again on Friday (August 23) morning. Gold is seeing support from quickly increasing confidence that the US Federal Reserve will cut interest rates at its next gathering, which is scheduled for September.
The central bank’s July meeting minutes, released on Wednesday (August 21), show the “vast majority” of participants believe it will be appropriate to do so if economic data continues to show inflation is declining.
A major revision to US jobs data has also added fuel to the rate cut fire.
On Wednesday, the Bureau of Labor Statistics said employers in the country added 818,000 fewer jobs in the year ended this past March. That means job growth averaged 174,000 a month during that period, not 242,000 as originally outlined. The downward update was expected and could also be revised, but if it holds it will be the largest since 2009.
The icing on the cake was Fed Chair Jerome Powell’s talk at the Jackson Hole Economic Symposium on August 23. During the much-anticipated speech, he said the time has come for policy to adjust — while as usual he didn’t provide details on the exact timing or extent of the cuts, he emphasized that the direction of travel is clear.
“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” he said.
Powell also said the balance of risks to the Fed’s dual mandate has changed — with inflation now “significantly” down, its attention is shifting to ensuring that the labor market stays strong.
The Fed’s next meeting is set to run from September 17 to 18.
Bullet briefing — Kazatomprom cuts guidance, Lucara finds huge diamond
Kazatomprom cuts 2025 production guidance
Major uranium miner Kazatomprom (LSE:KAP,OTC Pink:NATKY) released its financial results for the first half of 2024 on Friday, but all eyes were on its updated production guidance for 2025.
The company previously expected to produce 30,500 to 31,500 metric tons of uranium next year, but now anticipates output of between 25,000 and 26,500 metric tons of the energy commodity.
The firm has pointed to project delays and a sulfuric acid shortage as reasons for the downgrade.
“Kazatomprom had initially intended to ramp up its 2025 production to a 100% of Subsoil Use Agreement levels. However, the uncertainty around the sulphuric acid supplies for 2025 needs and delays in the construction works at the newly developed deposits resulted in a need to re-evaluate our 2025 plans,” said CEO Meirzhan Yussupov.
Kazatomprom’s comments boosted uranium stocks as investors took the news as another indication that miners won’t be able to produce enough uranium to meet growing demand. This week’s announcement that China has approved 11 nuclear reactors in a US$31 billion investment has only contributed to the narrative.
Lucara recovers “epic” diamond at Karowe
Lucara Diamond (TSX:LUC,OTC Pink:LUCRF) announced the recovery of a massive 2,492 carat diamond at its Botswana-based Karowe mine. According to the company, it’s one of the largest rough diamonds ever unearthed — media reports indicate that it’s second only to the Cullinan diamond, found in South Africa in 1905.
The gem isn’t the first big find at Karowe, and Lucara credits its success to its X-ray transmission technology, which it set up at the mine in 2017. This technology helps the company identify and preserve large, high-value diamonds.
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