Gold is on the rise in morning trade Tuesday as concern about
debt fears spreading across Europe is bolstering the allure of
alternative assets, including the yellow metal.
In particular, worries are mounting that the Europe's latest
$146.5 billion financial aid package for Greece will not be enough
to help the country climb out of its debt burden, and that many
other euro zone nations may possibly find themselves in a similar
situation. Such fears have led investors to shrug off the dollar's
gains against the euro.
At 0815 ET, gold is up 0.2% at $1,186.00 an ounce, while silver
is 0.8% lower at $18.69 an ounce, and copper is 1.0% weaker at
$324.50 a pound.
Base metals are on the decline as a report suggested China's
economic expansion is cooling off. HSBC's survey for China's
purchasing manufacturing index reached 55.4 in April, compared to a
reading of 57.0 in March.
On the corporate front, Melbourne-based Newcrest Mining Ltd. (
)'s $9.5 billion bid for Australia's Lihir Gold Ltd. (
) was approved by Lihir's directors. They unanimously reommended
that shareholders vote in favor of the takeover, which would create
the world's fourth-largest gold producer. Under the deal, Newcrest
will acquire all of Lihir's ordinary shares, with Lihir
shareholders receiving one Newcrest share for every 9.43 Lihir
shares they own in addition to 22.5 cents in cash per share.
Meanwhile, Canada's Yamana Gold Inc. (
) reported first quarter revenue gaining 62% from a year ago as
gold prices climbed and production increased. Still, profit fell to
$79.5 million from $86.0 million as gains from favorable foreign
exchange rate in 2009 pushed up earnings the previous year.