BCEAO releases $ 6 billion for West African economies

The BCEAO has just made a liquidity injection of 3350 billion FCFA ($ 6 billion) at a fixed rate of 2% in favor of several banks of the UMOA. A total of 87 financial institutions participated in the operation. The Central Bank of West African States (BCEAO) made a further injection of liquidity to its member countries last week. In total, 3350 billion FCFA ($ 6 billion) were disbursed by the institution.

During the auction on September 14, 87 banks in the sub-region obtained an injection of liquidity at a fixed rate of 2%. With more than 1000 billion FCFA ($ 1.8 billion), it is the Ivory Coast which obtained the most important financing, ie 31% of the funds injected.

It is followed by Senegal with more than 580 billion FCFA ($ 1 billion), Mali with 466 billion FCFA (835 million $), Benin with 434.5 billion FCFA (777 million $) and Burkina Faso with 318 billion FCFA. ($ 569 million). Niger with 241.6 billion FCFA ($ 432 million), Togo with 219 billion FCFA (…

Coronavirus Maintains Upward Trend in Gold Prices

After hitting its highest level in seven years on Monday, gold is still on an uptrend, helped by low interest rates and abysmal government debt against the Covid-19.
Coronavirus Maintains Upward Trend in Gold Prices

The ounce of gold started to rise again on Tuesday, May 19. The day before, the precious metal had even approached $ 1,800, before falling back to $ 1,730, after the announcement of promising tests by the Moderna laboratory on a vaccine against the Covid-19 disease. The news briefly restored confidence in the equity markets, to the detriment of the bullion, but the upward trend in gold remains, even if the volatility is high.

Safe haven in pandemic times

The precious metal is more than ever a safe haven in these times of pandemic. Investors are wondering about the duration of the health crisis and especially about its economic consequences in the medium and long term. However, we saw on Tuesday that new home projects plunged 30% in April in the United States.

Economic risks and escalating Sino-American tensions

This is in addition to the dismal forecasts of the chairman of the Federal Reserve over the unemployment rate which could climb to 20 or 25% in the world's leading economy. If Jérôme Powell ruled out a crisis of the magnitude of 1929 and dismissed the possibility of negative interest rates in the United States, these rates remained very low on both sides of the Atlantic, they no longer paid Investors, also worried by the colossal indebtedness of the countries affected by the Covid. To make matters worse, escalating tensions are worsening between China and the United States. Which does not bode well for the world economy.

Historical record of investments in ETFs

Investments in bullion have more than offset the drop in sales of gold jewelry. The jewelers had lowered their curtains during the confinement. The Chinese and Indians, the biggest consumers of gold jewelry in the world, therefore reduced their purchases in the first quarter, their currency was also under pressure. But investments in bullion funds or trackers have increased the most in four years. At 3,185 tonnes now, they are reaching their highest level of all time. Likewise, individuals bought 36% more gold than the same period last year, particularly in Western countries.

Mining production in decline

Central banks continued to collect gold at a slower pace than last year, however, they have many other expenses. All this while gold production continues to be disrupted by the epidemic. It fell 3% in the first quarter, to its lowest level in 5 years. Mining activity has been slowed by health measures against Covid-19 in South Africa. In Russia, the military has even set up a field hospital near Polyus’s largest gold deposit in Siberia.

Good results for gold companies

Despite this drop in production and the costs of implementing preventive measures, mining companies are reaping good profits in the first quarter thanks to soaring gold prices, from the Canadian giant Barrick to the smallest companies present in West Africa, like Terranga or Endeavor.