Pasofino Gold Limited (TSXV: VEIN)
Re-defining the Dugbe Gold Project
Gold prices fell this week as the US and China agreed to temporarily cut the tit-for-tat tariffs imposed in April, boosting broad financial market risk sentiment. Meanwhile, signs of slowing inflation and weaker-than-expected U.S. economic data cemented bets that the Federal Reserve will cut interest rates further this year, offering the precious metal a bit of support.
Spot gold fell 1.9 per cent to $3,180.46 an ounce by 10:30 a.m. ET, erasing most of Thursday’s gains. The gold futures contract in New York was also down 1.2 per cent to $3,187.00 an ounce.
Tim Waterer, chief market analyst at KCM Trade, said that on the bright side, the fall in gold prices continues to attract buyers, suggesting that the precious metal remains a favoured asset as the outlook for global growth and inflation remains uncertain.
It’s worth pointing out that gold prices were supported by a fresh round of safe-haven buying in the late Friday session after ratings agency Moody’s downgraded the U.S. sovereign credit rating from Aaa to Aa1. Moody’s pointed out that the reason for the adjustment of the rating is the rising cost of interest rates and unsustainable debt growth, while revising U.S. sovereign rating outlook from ‘negative’ to ‘stable’.
As the last major rating agency to maintain the U.S. sovereign debt Aaa rating, Moody’s pointed out in the report, the U.S. successive administrations and Congress have failed to reach agreement on measures to reverse the trend of large annual fiscal deficits and interest cost growth. And the fiscal proposals currently under consideration would not result in substantial multi-year reductions in mandatory spending and deficits.
After Moody’s downgrade, the market had little time to react. However, gold made a solid reversal, ending the week with prices back above $3,200 per ounce. Meanwhile, U.S. Treasury yields moved higher and stock index futures wavered in after-hours trading, reflecting investor uncertainty about the weekend.
Despite the recent pullback, precious metals have been one of the best performing assets this year, up nearly 24 per cent. After the price of gold surpassed $3,500 per ounce to hit a new all-time high in April, JP Morgan and UBS and other large banks predicted that gold will rise further during the year, JP Morgan predicted that by the second quarter of 2026 the price of gold will reach $4,000.
