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.
Gold prices rebounded steadily this week, with spot gold closing at $3,361.21 per ounce on Friday (May 23), marking a nearly 5% weekly rise. The rally came after Moody’s downgrade of U.S. debt last Friday. Meanwhile, the U.S. dollar index tested a three-week low near 99 points.
In a world worried about future deficits, interest payments, increased U.S. bond issuance and inflation, a steepening yield curve is bad for the dollar and U.S. stocks, and is instead a reason to buy gold and even bitcoin, Chris Weston, head of research at Pepperstone, said in a report on Friday.
Analysts point out that rising Japanese Treasury yields could further dismantle the yen carry trade, which could trigger global liquidity problems, while gold is increasingly becoming the ultimate safe-haven monetary asset globally.
Han Tan, chief market analyst at FXTM, said that next week, in addition to trade and geopolitical developments, gold traders will also focus on the FOMC meeting minutes, Fed officials’ speeches and PCE data to adjust their expectations for a Fed rate cut. Once the Fed releases stronger signals of rate cuts, gold prices may finally break through the $3,000-$3,500 range.
President Donald Trump’s threat to raise tariffs on European imports to 50 per cent by June 1 could also push up safe-haven demand for gold, according to Ole Hansen, head of commodities strategy at Saxo Bank. Trump’s tariff threat today reminds investors that the trade war is far from over and the US will suffer the economic consequences, which is a positive for gold.
Adam Turnquist, chief technical strategist at LPL Financial, said Friday that while stocks have rebounded significantly from April lows, trade, deficit and growth issues remain significant for the dollar. The de-dollarisation trend has made it difficult for the dollar to gain support over the past month against a backdrop of rising deficit forecasts and a downgrade of the US debt rating. The dollar’s technical momentum and positions remain bearish, and a break below the consolidation range would not only be technically significant, but could also heighten concerns about the health of the U.S. economy.
David Morrison, senior market analyst at Trade Nation, believes a weaker dollar will continue to favour gold, but he is telling investors to remain cautious as current momentum is neutral and prices could move in both directions. In an environment where the U.S. dollar is under pressure and investors are shunning the U.S. bond market due to debt concerns, there is still a strong case for holding gold as a hedge.
U.S. stocks will be closed for the day on 26 May (next Monday) due to the Memorial Day holiday.
