Editor’s Picks: Gold Price Breaks US$1,900, Brink’s Sues Air Canada for C$23 Million Heist
The gold price has picked back up after ending September with a fairly steep decline.
The yellow metal finished last week at about US$1,830 per ounce, but gained steam over the course of this week to end Friday (October 13) at the US$1,933 level. The US$100 gain took gold to a point not seen since September 20.
Gold is known as a safe-haven investment that provides portfolio stability in times of turmoil, and it played that role this week as violence broke out in the Middle East. The Palestinian group Hamas led an attack on Israel last weekend, and the violence has continued since then, with Israel launching its own offensive on the Gaza Strip.
The yellow metal’s rise also came ahead of the latest US consumer price index (CPI) data. The numbers show overall CPI rose 0.4 percent month-on-month in September, while core CPI, which excludes food and energy, went up 0.3 percent. On an annual basis, overall CPI and core CPI were up 3.7 percent and 4.1 percent, respectively.
Market participants are looking at these numbers for clues on what the US Federal Reserve may do at its upcoming meeting, which is scheduled to run from October 31 to November 1. The central bank held interest rates steady at its last meeting, but indicated that one more hike might be on deck for 2023. Now experts are less certain, particularly given recent comments from Fed officials — a number of them have suggested that rates may be at or near peak levels for this cycle.
Gold tends to fare better when interest rates are lower, and many experts believe today’s elevated levels are helping to keep a lid on the yellow metal. Once again all eyes are on what the Fed’s next move will be.
Brink’s sues Air Canada over gold heist
If you’ve been wondering how thieves managed to steal over C$20 million worth of gold and cash from Toronto’s Pearson International Airport, a lawsuit filed by the Brink’s Company (NYSE:BCO) sheds light on what may have happened.
Brink’s is suing Air Canada (TSX:AC), which flew the cargo from Switzerland to Toronto, where it was unloaded into an Air Canada bonded warehouse. The goods were gone only 42 minutes after they was taken off the plane.
In its statement of claim, which was filed with the Federal Court of Canada, Brink’s states that an unidentified person gained access to the storage area and showed a ‘fraudulent waybill’ to Air Canada staff. The airline then released the 400 kilograms of gold and US$1.95 million in banknotes.
‘Air Canada (AC) accepted the fraudulent waybill from the unidentified individual without verifying its authenticity in any way. Had AC made the necessary and appropriate inquiries in the circumstances, the unidentified individual’s ability to steal the cargo entrusted to its care would have been entirely avoided’ — the Brink’s Company
Brink’s wants Air Canada to cover the cost of the gold and cash, which comes to about C$23 million, as well as special damages and expenses. Air Canada has not yet commented on the situation or filed a statement of defense.
The crime took place back in April, and it’s taken months for these new details to come to light. Further developments in the case may also be slow, but we’ll keep you posted.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.