|Day's range||1,421.10 - 1,454.40|
(Bloomberg) -- Billionaire hedge-fund manager Ray Dalio sent ripples through the gold market this week when he advised buying the metal, but he’s part of a bigger wave.In the past month, banks including Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley have raised their forecasts for bullion or touted its prospects, while holdings in exchange-traded funds linked to gold rose to a six-year high. Richard Hayes, chief executive officer of Australia’s Perth Mint, said buying by central banks is adding to the enthusiasm.Bullion is getting more attention from institutional investors as the prospect of slowing economies, lower interest rates and rising global tensions drives demand for the metal as a store of value. Gold, which benefits from low rates because it doesn’t pay interest, has since late May generated the best returns in the Bloomberg Commodity Index.“Safe-haven flows into the asset class in light of geopolitical risks and unresolved trade tensions continue to support the gold price,” Darwei Kung, head of commodities and portfolio manager at DWS Investment Management Americas Inc., said in an emailed report.According to Dalio, the founder of Bridgewater Associates, stimulus from central banks that’s helped bolster asset prices is nearing its limit and having diminishing effects on economies. Such stimulus will lead to more negative real and nominal returns, spurring investors to seek alternative forms of money such as gold or other stores of wealth, Dalio said this week in a LinkedIn post.‘Paradigm Shift’He sees a coming “paradigm shift” in the next few years as an enormous amount of debt and non-debt liabilities such as pension and health care comes due and can’t be funded with assets. That will lead to “some combination of large deficits that are monetized, currency depreciations, and large tax increases.”Assets “that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold,” Dalio said.Investor demand has kicked into high gear since the Federal Reserve signaled in June that it may begin cutting U.S. interest rates as early as this month to shore up growth. That could set the metal up for a fall if the Fed doesn’t follow through as investors expect. The market is currently pricing in a 50-basis-point cut, “and any change in sentiment could see a sharp reversal to the downside,” according to DWS’s Kung.Wealth EffectStill, Goldman analysts including Mikhail Sprogis and Sabine Schels said in a June 25 report that bullion doesn’t need fear to prosper. While a gradual brightening of prospects for the world economy in the second half of 2019 and receding worries of recession could lead to lower “fear”-driven demand for bullion, that will probably be offset by a positive “wealth” effect, the bank said.Gold futures for August delivery on the Comex in New York rose as much as 1.8% to $1,454.40 an ounce on Friday, the highest for a most-active contract in six years. Prices are heading for a fourth weekly gain in five.If the rally does persist, retail investors who have largely been on the sidelines may soon join in, according to Hayes of the Perth Mint.“It takes a little while for a rally like this to really feed into mainstream society,” Hayes said in an interview by phone. “If it is sustainable it will undoubtedly spark additional interest not only from institutions but from the average investor in the street.”(Updates with gold price in third-from-last paragraph.)To contact the reporters on this story: Joe Richter in New York at email@example.com;Justina Vasquez in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Billionaire investor Ray Dalio made headlines this week by asserting in a 6,000-word essay that gold should become a key part of every portfolio. Investors in Canadian gold stocks are way ahead of him.Gold producers have been on a tear in Canada, keeping the benchmark S&P/TSX Composite Index near its all-time high. Companies, including Eldorado Gold Corp., Alacer Gold Corp. and Semafo Inc. make up half the index’s biggest gainers this year, while nine of the top 10 in the past month have been gold or silver producers. The gold firms have taken the reins from technology and pot stocks, which were the drivers earlier this year.The S&P/TSX had been rising out of an ugly trough reached in December, in part thanks to Shopify Inc.’s gravity-defying rally and several high-flying pot stocks. The gauge rose 12% from beginning of the year though the end of May, outperforming the S&P 500.During those five months, technology and pot/healthcare were the best-performing sectors, rising about 39% and 31%, respectively. Meanwhile, the materials sector had been languishing at the bottom of the 11-group list.That all began to change in April. The broader market started to turn lower as trade-war jitters percolated and economic-growth concerns rose. Those issues, plus strengthening dovish signals from the U.S. Federal Reserve, nudged investors to gold as a haven.By June, the precious metal was on a tear, trading near six-year highs, benefiting miners and pushing up the S&P/TSX. Helped by the rally in gold and silver mining stocks, materials became the best-performing sector from June 1 through Thursday, rising 17%, while cannabis/healthcare became the worst, falling 6.6%.To be sure, technology and pot are still the Canadian index’s top two sectors this year. And materials stocks, which were the worst performers year-to-date until the end of May, are now among the top five.There may be more room for gold to rise. Industry analysts are jumping on the bandwagon, according to Bloomberg data, which shows that, on average, industry experts are predicting that gold and silver prices will remain elevated heading into at least next year.To contact the reporter on this story: Aoyon Ashraf in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Brad Olesen at email@example.com, Steven Frank, David ScanlanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Eurasian Resources Group Sarl, the mining firm backed by the Kazakhstan government, is exploring options for assets in the Democratic Republic of Congo including a potential sale, according to people with knowledge of the matter.China Nonferrous Metal Mining (Group) Co. is among companies interested in the assets, the people said, asking not to be identified as the information is private. Deliberations are at an early stage, and ERG could decide against a sale, they said.Bidders could value the company’s assets at $3 billion to $4 billion while the seller may be seeking $7 billion to $8 billion, the people said. Valuing the assets is difficult because of political risks in the region and volatile metal prices, among other reasons, they said.A representative for ERG declined to comment. China Nonferrous couldn’t be reached for comment.ERG, which mines copper and cobalt in DRC, has been reviewing its investments and has already sold assets valued at about $1 billion, according to its website. The company is a major producer of cobalt, a material used in rechargeable batteries powering iPhones and Tesla cars, though it’s had to grapple with a supply glut and declining prices. Congo produced 72% of the world’s supply of cobalt last year.Read more about cobalt mining in the DRC here.The firm is also developing large-scale investment projects in Central Asia and Africa with the Chinese government as part of the New Silk Road initiative, according to its website.China Nonferrous operates in more than 80 countries and regions globally. It produces so-called nonferrous metals, which contain little or no iron, such as copper, lead and gold. The company also invests in mining projects in Zambia, Mongolia, Myanmar, Thailand and DRC, according to its website.\--With assistance from William Clowes and Elena Mazneva.To contact the reporters on this story: Carol Zhong in Hong Kong at firstname.lastname@example.org;Vinicy Chan in Hong Kong at email@example.com;Dinesh Nair in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Fion Li at email@example.com, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. lawmakers repeatedly pressed Facebook's top blockchain exec to halt development of the Libra cryptocurrency in Tuesday's hearing.
Today we are going to look at Lena Gold-Mining Public Joint Stock Company Lenzoloto (MCX:LNZL) to see whether it might...
The cryptocurrency markets fell sharply on July 14 after bitcoin endured a $1400 sell-off, denying the bulls a chance to revisit 2019 highs.
An advocacy group is testing out the idea that the combination of bitcoin and orbital communication can help fight news censorship.
(Bloomberg Opinion) -- Gold has had some reputational issues since reaching a record high in 2011. The thesis at the time was that a massive expansion of the money supply via the Federal Reserve’s quantitative easing program would spark hyper-inflation, making hard assets more attractive than financial assets. Hyper-inflation never came to pass, which helps to explain why the price of gold tumbled almost 50% over the following four years.We still don’t have very much inflation, and yet there is renewed interest in gold with prices reaching their highest since early 2013 at about $1,440 an ounce. There are a lot of reasons to like gold. One is that gold tracks fairly closely with budget deficits. The highs of 2009-2011 roughly corresponded with the large deficits that reached 10% of GDP during the Obama administration, which included the stimulus spending during the Great Recession and a sharp depreciation in the value of the dollar.This time there is a sense that the deficit problem is large and intractable. The Congressional Budget Office forecasts the deficit will more than double to 8.7% of GDP by 2049. Also, there is open discussion of things such as modern monetary theory, or MMT, which would be about the most gold-bullish development imaginable.Gold is the closest thing that we have to an objective store of value. Many disagree, saying there is nothing objective to gold’s value, since it generates no cash flows. That’s not the point. The point is that there is a finite amount of gold in the earth’s crust, there is growing evidence that we have mined most of it, and aside from traveling to an asteroid, we aren’t going to produce much more. (Full disclosure: I have positions that would profit from rally in gold and the shares of gold mining companies.)The cryptocurrency promoters argue that Bitcoin is an objective store of value, and they are somewhat right, since there can only be a certain number of coins in existence. But Bitcoin has some technical complications that gold does not, such as what happens if the power goes out? I have argued for years that tangible things you can pick up and touch are considerably more valued than lines of computer code. Time will tell.But the biggest factor affecting gold prices recently has been the proliferation of negative-yielding debt. There are about $13 trillion of negative-yielding bonds in the world, and a shiny rock that yields nothing – but, admittedly, has some storage costs - is actually high-yielding in comparison.Those who advocate the investment merits of gold are often labeled as “gold bugs,” which has become a somewhat derisive phrase, associated with conspiracy theories and tinfoil hats. But in the current political and economic environment, there are real intellectual reasons to think about gold other than hysteria over hyper-inflation due to money printing.The hysteria over inflation due to money supply growth was pretty widely accepted in 2009, including by me, but it was the fear of inflation that drove people into gold, which worked out, and put options on 30-year bonds, which didn’t. In other words, gold can move on fear. It can move on fear of deficits and it can move on fear of MMT -- even if those fears are never realized. Markets are occasionally irrational, but that doesn’t mean there aren’t opportunities to profit from the irrationality.Every bubble has two phases. There’s the first move, which is backed by lots of speculative froth and retail participation, and the second move, which is the real move and that may not happen until years later. It happened with tech, first in 1999, which eventually involved into the FAANG group of stocks: Facebook, Apple, Amazon.com, Netflix and Google. It seems to be happening in Bitcoin, as the most recent thrust higher is mostly happening without retail participation. And it is happening in gold, where a dearth of retail coin sales suggests the surge higher is more about institutional and central bank demand.People tend to invest in what they have an affinity for and what they agree with. Environmentalists and animal rights folks invested in Beyond Meat. Cannabis “enthusiasts” invested in cannabis stocks. Conservatives like gold. We should all like to invest in things that go up, no matter what they are.To contact the author of this story: Jared Dillian at firstname.lastname@example.orgTo contact the editor responsible for this story: Robert Burgess at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Jared Dillian is the editor and publisher of The Daily Dirtnap, investment strategist at Mauldin Economics, and the author of "Street Freak" and "All the Evil of This World." He may have a stake in the areas he writes about.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking...
Ahead of Tuesday’s bidding deadline, Acacia Mining has announced a big increase in production thanks to a strong performance at its flagship asset in Tanzania. The London-listed miner said output rose 51 per cent to almost 159,000 ounces of gold in the three months to June, up from 105,000, boosted by a record breaking performance from its North Mara mine. It churned out 119,000 ounces of gold in the quarter and set a monthly production record of nearly 48,000 ounces in June.
While the uptick in the price of gold has helped this miner, plenty of other reasons help account for the stock's ascent.
The G20 Summit provided the upside for yields in the week, in spite of weak stats out of the U.S. NFP numbers could give rates another boost this week.
(Bloomberg) -- Barrick Gold Corp. is working with advisers to find a buyer for its Massawa gold project in Senegal, which it acquired as part of its purchase of Randgold Resources Ltd., people familiar with the matter said.The asset could fetch a value of about $500 million, the people said, asking not to be identified because the deliberations are private. The company aims to kick off a formal sale process shortly for part or all of its stake, the people said.Barrick is targeting $1.5 billion in asset sales through 2020 following the company’s $5.4 billion takeover of Randgold completed in January. The gold mining industry is consolidating quickly, and the biggest producers have been selling off smaller, unwanted assets as they merge.Acquisitions of gold miners are up nearly sixfold over the last 12 months to about $27 billion, according to data compiled by Bloomberg. No final decisions have been made, and there’s no certainty the deliberations will lead to a sale of the Massawa project, the people said.A spokeswoman for Barrick declined to comment.Barrick owns about 83% of the Massawa project, according to its website. The asset is located in eastern Senegal, about 700 kilometers (435 miles) southeast of the capital city of Dakar.Massawa is an an example of a project where Barrick could sell part of its stake to another miner operating nearby, Chief Executive Officer Mark Bristow said in a May interview. Other companies in the area include Toronto-listed Teranga Gold Corp. and closely held Toro Gold Ltd., Bristow said.Barrick walked away from a nearly $18 billion bid for Newmont Mining Corp. earlier this year, opting instead for a joint venture around the two companies’ Nevada mining assets. Newmont in April agreed to buy Goldcorp Inc. in a deal valued at $10 billion, becoming Newmont Goldcorp Corp. in the largest takeover of its kind.\--With assistance from Danielle Bochove and Doug Alexander.To contact the reporter on this story: Dinesh Nair in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Aaron Kirchfeld at email@example.com, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The metal is consolidating levels between 1,410 and 1,425 as the unit remains slightly bullish, but a firm dollar is holding the metal at current levels. All focuses are now in the employment report.