Gold prices ended the second week of the year just below US$1,920 per ounce.
The yellow metal last broke above $1,900 in April 2022 before embarking on a bumpy decline that continued throughout the summer and fall. The reversal began in early November and gold has risen about $300 since then.
The increase comes despite the US Federal Reserve’s efforts to fight inflation. Central banks have repeatedly indicated plans to continue raising interest rates, which tends to be negative for non-interest-bearing assets like gold.
However, many market participants believe the Fed will reconsider, and the latest consumer price index released on Thursday (Jan. 12) has added momentum to that debate. The price rose 6.5% year-on-year and fell 0.1% month-on-month, in line with the consensus forecast.
US Global Investors (NASDAQ:GROW)’s Frank Holmes is one of the experts who thinks the Fed should ease.
“I am very bullish on gold as an asset class. Without a very tragic global recession, we will not be able to raise interest rates further this quarter. he said.
He suggested investors focus on mid- and small-cap gold stocks ahead of a potential gold price rally.
Sweden’s LKAB Discovers Europe’s Largest Rare Earth Deposit
This week also brings news from the rare earth market, an area we don’t often cover at INN.
Swedish state-owned mining company LKAB announced on thursday The discovery of Europe’s largest rare earth deposit. The property’s mineral resources, called Per Geijer, represent over one million tonnes of rare earth oxides.
“This is the largest deposit of rare earth elements known in our region of the world and is a key building block for the production of critical raw materials that are absolutely essential to enable the transition to the environment. could become,” said Jan Moström, LKAB President and Group CEO. “We are facing a supply problem. Without mines, there would be no electric vehicles.”
Rare earths are important for many high-tech applications and are becoming an important source of demand as electric vehicles gain global attention. We are trying to diversify away from China, which has long dominated production and processing.
Although its dominance has waned in recent years, the U.S. Geological Survey estimates China’s rare earth production at 168,000 tonnes in 2021, far ahead of the second-placed United States at 43,000 tonnes.
No rare earths are currently produced in Europe, and LKAB stresses that although the Per Geijer discovery is significant, the project will take time to get into production. Moström said in a company press release that from 2010 to 2015 he did not expect such a thing to happen unless Europe took steps to speed up the permitting process.
At the same time, regions need to increase their processing capacity.
“So we need to look at the entire value chain for these metals, also for products like high-efficiency magnets that we want to use in things like wind turbines and traction engines (electric vehicles),” says Erik Jonsson, senior geologist at Geological Swedish Mineral Resources. Bureau investigation, told Reuters.
For now, LKAB’s first step is to apply for a development concession that will allow further exploration of the deposit. The company plans to submit an application later this year.
LKAB is best known as an iron ore miner and accounts for 80% of the EU’s iron ore production. It also markets other industrial minerals and offers a variety of products and services, including drilling solutions, concrete, and explosives.
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Securities Disclosure: I, Charlotte MacLeod, have no direct investments in any of the companies mentioned in this article.
Editor’s Disclosure: Investing News Network does not guarantee the accuracy or completeness of information reported in interviews it conducts. The opinions expressed in these interviews do not reflect those of Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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