Obama’s plans to tighten banking regulations toppled commodities last week, pushing gold down to a one month low at below US$1,100/oz, while the US Dollar showed weakness before today’s US existing home sales update, which is expected to show a decline of the number of existing homes sold.
The US Dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.3% today, with profit taking following last week’s rally also factoring in. The American currency was later supported by reports that Ben Bernanke would secure confirmation for a second term as Fed Chairman from the US Senate later in the week.
The yellow metal returned to US$1,100/oz, while silver climbed to US$17.13/oz and platinum, which has recently rallied on anticipated higher demand from newly established PGM (platinum group of metals) based exchange funds, moved down to US$1,539/oz.
Mining stocks were higher in London with platinum producers leading the way.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) was flat.
Aquarius Platinum (LSE: AQP) was the top performer in the sector in the FTSE 250 with a 2.4% improvement. Silver producer Hochschild Mining (LSE: HOC) added slightly less than 1%, while gold miner Petropavlovsk (LSE: POG) made little headway.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) was the top performer among the juniors, gaining 7.5% after reporting new mineralisations at its flagship Vatukoula mine. Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) followed, climbing 6.7%.
Turkey focused gold miner Ariana Resources (AIM: AAU) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) headed in the opposite direction, shedding 7% and 4.5% respectively.
Disclosure: The author holds no positions in the company