U.S. equities hold steady, May 30-June 3

Economic data was mixed with reports that U.S. consumer spending in April posted its sharpest increase in more than six years, while jobs data showed that non-farm payrolls in May increased the least in more than five and a half years at just 38,000. The employment figures sent the U.S. dollar down 1.6% on June 3, but contributed to the rise in the gold price, which advanced 2.5% to US$1,243.50 per oz. gold. Attacks on oil infrastructure in Nigeria helped push Brent crude to a weekly close of US$50.21 per barrel. The Dow Jones Industrial Average fell 0.4% to 17,807.06, and the S&P 500 remained relatively flat — up just 0.003% to 2,099.13.

Barrick Gold jumped US$2.56 to US$19.18 per share. The company confirmed it had reached a US$140-million settlement in a class action lawsuit pending before the U.S. District Court. The lawsuit claimed that Barrick had misrepresented the status of its Pascua Lama project. Barrick rejects the allegations and said “the company has not accepted any charges of wrongdoing or liability.” Construction at the project was stopped in 2013 after being dogged by environmental issues, political opposition and cost overruns. The gold producer has written down the project’s value by an estimated US$6 billion.

Infill drilling at the Brucejack project’s Valley of the Kings lifted shares of Pretium Resources by 17% to US$8.26 apiece. The underground drill program returned six intersections grading greater than 1,000 grams gold per tonne, within long intervals of significant gold mineralization. The results from the 2015–2016 infill drill program and a revised geological interpretation will be incorporated into an updated resource estimate for the Valley of the Kings. Highlights include 149.95 grams gold per tonne uncut over 31 metres, including 9,200 grams gold uncut over 0.5 metre in hole 746 and 69.66 grams gold uncut over 23.3 metres, including 2,260 grams gold uncut over 0.5 metre in hole 749. Commercial production is targeted for 2017.

Vale’s shares were the second most traded and rose US63¢, or 16%, to US$4.61. The company sold its 27% in the troubled CSA steel plant to Germany’s ThyssenKrupp for a “symbolic price” to focus on its core business. (Vale is entitled to a part of earnings if ThyssenKrupp sells the steel plant in the future.)