AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
The price of gold fell further on Tuesday (12 November local time) as Trump’s election victory continued to support the US dollar and Treasury yields higher, with December Nymex Gold Futures closing down $17.20 to $2,600.30 per ounce, which is a seven-week low. The price of the silver futures closed at $30.645 an ounce, slightly gained on previous sessions.
The price of gold has fallen more than 5 per cent since last week’s U.S. election, as hedge funds unwound bullish bets and exchange-traded funds shifted money out of gold to support the U.S. stock market.
Chris Weston, head of research at Pepperstone Group Ltd., said funds sold long positions after a technical drop below the 50-day moving average, so there are also technical reasons behind gold’s current decline.
Daniel Pavilonis, senior market strategist at RJO Futures added: “I think this is just a corrective move in a long-term bullish market. The policies that are in place now are seen to continue to push up inflation. Therefore, if we see another wave of inflation coming, that should push gold higher.”
Year-to-date, the precious metal is still up more than 25 per cent, supported by the Fed’s easing cycle, central bank purchases while heightened geopolitical and economic risks driving safe-haven demand.
According to the CME’s Fed Watch tool, the likelihood that the central bank will cut rates again in December is 65 per cent, compared to about 80 per cent before Trump’s victory. Wednesday will see the release of the latest US Core Consumer Price Index report, where investors can look for clues as to the Fed’s next move after last week’s 25 basis point rate cut.
Analysts point out that the psychology of the precious metals market has changed over the past week. Most gold and silver traders/investors seem to have shifted from confidently buying price dips to now being careful to sell any price gains.
The main reasons for this change in psychology are the deteriorating recent technical patterns in gold and silver and a return of risk appetite across the markets. Until this change in trader psychology, gold and silver prices look set to remain predominantly sideways or lower.
The US Dollar Index hit a 4.5-month high during today’s session, while Nymex crude oil futures prices are slightly firmer, trading near $68.25 per barrel. The benchmark 10-year U.S. Treasury yield is currently around 4.5 percent.
In addition, according to the Silver Institute’s latest Silver Market Mid-Term Review, released Tuesday evening, the global silver market will experience a fourth consecutive year of supply shortages in 2024.
The report projects that industrial demand for silver will grow by 7 per cent in 2024, exceeding 700 million ounces for the first time, with growth driven by green economy applications, particularly in the photovoltaic (PV) sector.
Meanwhile, demand from the automotive industry is also expected to increase, with silver benefiting from increased electrification of powertrains and continued investment in infrastructure such as charging stations. While a tough macro backdrop is dragging down sales of consumer electronics, the rapid adoption of artificial intelligence technology is leading to growing demand for technology upgrades, replacements and investments in new infrastructure, the report said.
