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Gold down, lithium stocks gain

The gold price dropped and commodity prices were weaker, as the US dollar strengthened and Federal Reserve chairman Jerome Powell made hawkish comments indicating possible interest rate rises, but Australian lithium companies provided positive moves.
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Pilbara rises on POSCO deal

Staff reporter

Gold, which was yesterday above US$1,330 an ounce on the spot market, was earlier trading around $1,318.

The metals and mining sectors were lower on key indices since this time yesterday, down about 1.8% on both the S&P500 and S&P/TSX Composite Index, 0.8% lower in London yesterday and down 1.4% in Australia today.

In the US, Freeport-McMoRan (US:FCX) and Newmont Mining (US:NEM) both lost about 2.2%.

In Toronto, the bulk of gold stocks closed lower, bar Kirkland Lake Gold (CN:KL) and Yamana Gold (CN:YRI), up about 1% and 0.5% respectively.

Randgold Resources (LN:RRS) reversed the previous day's gains in London, closing down 2.3%.

Lithium companies were the key gainers in Australian trade today.

Developer Pilbara Minerals (AU:PLS) was up almost 14% in morning trade after striking a landmark deal with South Korean conglomerate POSCO covering offtake, an immediate near-A$80 million (US$62 million) direct equity investment and participation in a proposed downstream lithium chemicals facility.

Pilbara had released a positive prefeasibility study earlier this month outlining a compelling case to expand its 2Mtpa project, which is nearing commissioning, to 5Mtpa.

Lithium producer Galaxy Resources (AU:GXY) was the second biggest gainer on the benchmark S&P/ASX200, closing up 6.4% on no news.