Rua Gold Inc. (TSXV: RUA, OTC: NZAUF, WKN: H8E)
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On Wednesday, the precious metals market received a boost as economic data showed a continuous rise in U.S. initial jobless claims and a contraction in the service sector, leading to a weakening of both the dollar and U.S. Treasury yields. Gold futures prices reached their highest closing level in approximately one month, while silver prices surged 4%, breaking the critical threshold of $30 per ounce.
August gold futures on the New York Commodity Exchange climbed $36 to $2,369.40, an increase of 1.5%, marking the largest single-day percentage gain since April 5 and the highest closing price since June 6. September silver futures rose $1.18 to $30.84, a 4% increase, the largest single-day gain since June 20. Moreover, silver prices have risen for six consecutive trading days.
Regarding the outlook for silver, Chen Lin of Lin Asset Management explained that once market participants realize the huge supply-demand gap in the silver market, prices for this precious metal will quickly rise to the level of $50 per ounce. Lin pointed out that two or three years ago, the solar industry consumed 100 million ounces of silver, which soared to 200 million ounces last year, and he expects this figure to reach 300 million ounces in 2024.
The ISM non-manufacturing index last month dropped to 48.8% from 53.8% in May, the lowest level since May 2020. Additionally, the number of initial jobless claims for the week ending June 29 increased by 4,000 to 238,000, higher than economists’ forecast of 233,000. Lastly, the ADP report showed that U.S. businesses added 150,000 new jobs last month, the smallest gain in five months.
After the data release, the yield on the 10-year U.S. Treasury note fell from 4.425% on Tuesday to 4.352%, and the ICE Dollar Index declined 0.4% to 105.35.
Furthermore, another driving factor for Wednesday’s rise in gold prices was expectations of rate cuts in the U.S. Federal Reserve Chair Jerome Powell, speaking at the European Central Bank meeting in Portugal on Tuesday, noted that while it is too early to take action on rates, inflation appears to be returning to the downward path observed at the end of last year. Many media outlets interpreted Powell’s dovish remarks as suggesting that the Fed is reconsidering rate cuts.
