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Commodities

Zamfara establishes its first gold reserve

The Governor disclosed that the gold was entirely mined and refined by local artisanal miners in the state.

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Buhari presented with gold bars mined in Zamfara as Nigerian prepares to launch PAGMI scheme.

Zamfara State Government has established the first of its kind gold reserve in Nigeria, starting with 31 kg of processed gold, that will be deposited in a bank.

The Governor of Zamfara state, Bello Matawalle disclosed that the gold was entirely mined and refined by local artisanal miners in the state.

Commenting on the motive behind the project and its prospects, Matawalle revealed that the decision to undertake and fully establish the project is driven by economic and social considerations that the project will have on the indigenes in the state and country at large, both at present and in the future.

READ: Nigeria to lift ban on Zamfara solid mineral mining by Q1 ending 

“My administration will subsequently continue to buy gold from our local miners so as to gradually improve the reserve.

“Even though our state, like other states of the Federation, is grappling with competing demands from the public, the resources at our disposal are meagre. We feel it is of utmost significance to invest in the future of our people.

“The establishment of the gold reserve, therefore, is part of the relentless efforts by my administration to diversify the state’s economy by exploring all potentials of the state, and maximally utilizing them for the benefit of both the present and future generations.”

READ: Crypto robber steals $15 million

In the opinion of the governor, the reserve had a relatively better Returns on Investment (ROI) when compared to financial equities such as Stocks. He emphasized the need to diversify the economy, citing the recent collapse of the oil market as justification to diversify into the Solid minerals sector.

Why it matters

Given the present FG’s drive to diversify the economy, this development is a welcome idea and in line with the goal. It has great potential for increased employment generation, higher IGR, savings of hard-earned forex, and other spillover effects on the economy.

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

2 Comments

2 Comments

  1. Biodun Idowu

    October 8, 2020 at 9:10 pm

    Should a State own any mineral resource such as gold when petrol is controlled by the Federal Government?

  2. David

    November 12, 2020 at 3:49 pm

    Sudan and Ghana also produce gold, both are mired in poverty, the main beneficiaries being local ruling class elites and the imperialist exploiters, US, UK, EU.

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Commodities

Oil prices plunge on surging U.S. dollar

U.S. West Texas Intermediate (WTI) crude futures were down by  0.6%, to trade at $63.17 a barrel thereby giving up all of Thursday’s gains.

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Oil prices gain likely to halt over demand uncertainty as US-China tension intensifies

Oil prices drifted lower at the last trading session of the week. The plunge is attributed to the surging U.S. dollar and expectations revealing more supply is likely to come back to the market as global energy demand has improved significantly.

What you must know: At the time of writing this report, U.S. West Texas Intermediate (WTI) crude futures were down by 0.6%, to trade at $63.17 a barrel, thereby giving up all of Thursday’s gains.

Brent crude futures dropped about 0.3%, to trade at $66.70 a barrel. The April contract expires on Friday.

READ: Oil prices tumble, oil traders jittery on OPEC+ meeting

Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave an indepth analysis on why crude oil prices are currently having a downturn.

“Stronger US dollar, especially against Asia EM and higher bond yields, lead to the selling of long-duration assets. And given the massive overweight of “long duration, infinite growth tech” at the index level, stocks are capitulating.

“And the domino effect is starting to hit commodities like oil triggered by a correction in the reflation trade due to higher US yields that are becoming a significant source of market volatility.

“Next week’s OPEC+ meeting has more potential to be damaging than a positive catalyst given the optimism now priced into oil and the likelihood the group takes steps that could prompt a round of profit-taking.”

READ: Oil Price: A dead cat bounce in the making?

What to expect: Oil pundits, however, anticipate the bearish trend might likely be short-lived, given evidence of an ongoing demand rebound and the likelihood that oil markets remain tight this year.

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Commodities

Gold breaks below $1,800 per ounce, amid rising U.S Treasury yields

At the time of writing this report, the blinky metal at the futures market was trading at $1,796.40 per ounce.

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gold, Gold fast losing the battle to Bitcoin

Gold drifted below the $1,800 price level at the fourth trading session of the week due to higher U.S. Treasury yields. Also, U.S. Federal Reserve Chairman, Jerome Powell, maintained that the current ultra-easy monetary policy paused buying pressure on the yellow metal’s appeal.

At the time of writing this report, the blinky metal at the futures market was trading at $1,796.40 per ounce.

What you need to know: Usually, higher inflation boosts the price of the precious metal in principle, but also helps U.S Treasury yields (gold’s arch-enemy), which in turn helps the opportunity cost of holding the safe haven shinny asset.

READ: Gold suffers its worst January performance since 2011 amid rising U.S dollar

The U.S Fed Chief recommitted to getting the world’s largest economy back to full employment during his testimony before the House Financial Services Committee.

He tried calming fears about inflation in the $20 trillion powered economy, emphasizing that he would only start worrying about it if prices began to rise in an aggressive and troubling way.

Benchmark U.S. Treasury yields are currently at the highest levels in a year.

Stephen Innes, Chief Global Market Strategist at Axi, gave further insights on the political macro condition that could determine the precious metal’s future, at least for the midterm, knowing fully well that gold is priced in the U.S dollar.

READ: Nigeria’s first and largest industrial-scale gold mine set to be completed in first half of 2021

“Gold broke below USD1,800/oz. Such a break below that level this month has done some psychological damage to the market, I believe.

“On the political side, President Biden’s incentives look fully aligned with getting the US economy and populations as healthy as possible ahead of the 2022 mid-term elections.

“If both fiscal and monetary policy makes maximum efforts into a post-pandemic recovery, then at the very least we will get temporary inflation along with plenty of debate whether it might become more permanent.

READ: Gold fast losing the battle to Bitcoin

bitcoin train

Bottom Line
Gold traders are not keen on going bullish, at least for the near term, on the bias that rising U.S Treasury yields see investors showing less interest in the yellow metal.

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