(Bloomberg) -- Gold headed for its best week since December amid a retreat in bond yields and a report that top buyer China may import more of the metal.After weeks trading in a narrow range, gold has advanced as Treasuries yields and the dollar head for weekly losses. Lower yields boost the appeal of bullion, which doesn’t offer interest. Dollar declines helped spur a broad rally in raw materials, with the Bloomberg Commodity Index also on track for its best week of 2021.Bullion is showing tentative signs of breaking out of a slump following three straight monthly losses. Prices rose above the 50-day moving average on Thursday, a positive signal for traders who follow chart patterns. On Friday, bullion extended gains to the highest since February after Reuters reported that China has given banks permission to import a large amount of bullion to meet domestic demand.The overall robust performance in commodities this week was “being supported by a surprise drop in U.S. Treasury yields accompanied by a weaker dollar,” said Ole Hansen, head of commodities research at Saxo Bank. Gold, along with crude oil and copper, “broke higher, thereby potentially signaling renewed momentum attracting fresh buying from speculators.”Spot gold rose 0.8% to $1,778.17 an ounce by 1:43 p.m. in New York. Prices are up about 2% this week, on course for the biggest gain since Dec. 18. Futures for June delivery on the Comex rose 0.8% to settle at $1,780.20 an ounce.Federal Reserve Chairman Jerome Powell’s reiteration of his dovish stance on monetary policy also helped bullion this week. That helped offset the impact of improving U.S. and Chinese economic reports, which could otherwise diminish demand for the metal as a haven.“The economic data published in the U.S. yesterday afternoon turned out for the most part to be significantly better than the market had anticipated,” Commerzbank AG analyst Daniel Briesemann said. “It seems that market participants believed the U.S. Federal Reserve’s assertion this time that it would not react to good data and would tolerate economic overheating.”In other precious metals, silver and platinum advanced.Palladium rose 1.2% after reaching the highest in more than a year. The metal, which reached a record of $2,883.89 in February last year, has benefited from stricter emissions rules that boost usage in autocatalysts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The first-round winner of Peru’s presidential election wants to renegotiate mining contracts rather than seize assets, said a party official, in comments that may ease concerns in the world’s second-biggest copper industry.While Free Peru’s official platform mentions taking control of natural resources, its candidate Pedro Castillo isn’t looking to nationalize mining, and welcomes private investment, the party’s legal representative Ana Maria Cordova said by telephone. Castillo, who will announce some “adjustments” to his platform, wants a bigger share of company profits to benefit Peruvians.“Not to expropriate them, not to nationalize or anything, but so that the conditions in some way also favor populations where these industries or mining operations are involved,” she said. “It is simply renegotiating conditions so that they somehow improve in favor of the population.”Castillo will face right-winger Keiko Fujimori in a June 6 runoff vote. Fujimori has warned that her rival’s plans to rewrite the constitution and take over strategic companies make him a danger to democracy. Whatever the outcome, higher investment risk will result in less copper supply over time, Jefferies analyst Christopher LaFemina wrote. That may help push up prices of the metal as demand surges amid a transition to clean energy and transport.Castillo wants to ensure certain resources better serve local populations, Cordova said, citing some of the highest gas prices in South America despite Peru being a major producer. Uncertainties surrounding the rural schoolteacher-turned-politician, who earlier this week vowed to nationalize the Camisea gas deposit, have spooked investors.Still, Peru has experienced hard-line candidates in the past who softened their views after taking office, and any radical moves would have to get through a predominantly investor-friendly congress.“I don’t see Peru going the way of Venezuela,” said Bloomberg Intelligence analyst Grant Sporre. “That said, if the country does raise royalties and taxes, that will make investment more difficult and projects in copper, for instance, are likely to slow. Peru still needs to remain competitive.”Peruvian operations owned by companies including BHP Group, Freeport-McMoRan Inc. and Southern Copper Corp. account for 11% of the world’s mined copper. Anglo American Plc is scheduled to begin production at the Quellaveco mine next year. The country is also a major producer of zinc, silver and gold.No ‘Apocalypse’Cordova said private capital “won’t be touched,” with the government simply looking for a bigger share of profit.“The government plan remains the same, what will be done are detail clarifications, and obviously based on the conversations with the other political organizations, there may be some flexibility,” she said.“In the short term, we still see a lot of resilience in the sector and a positive macroeconomic environment,” said Hector Collantes, an associate director at Fitch Ratings, who covers metals and mining. “There’s a lot of caution in the medium term to decide on growth projects that could affect the long term.”Gold Fields Ltd. Americas Executive VP Luis Rivera said on Wednesday that Peru’s constitution had proven resilient in the past. “It’s not like this is going to be an apocalypse,” he said at an industry seminar.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The Zacks Analyst Blog Highlights: BHP Group, Rio Tinto, Southern Copper and Freeport-McMoRan