Tag: the gold report

How the Five Principles of Capital Allocation Can Mean Gold Mining Success

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The Gold Report: The price of gold is flirting with a five-year low. Do you attribute this solely to the strength of the U.S. dollar, or are there other factors at work?

Ralph Aldis: There are other factors. Most important is the strength of the equity markets. Looking at a six-year window, we have seen, for the third time in the last hundred years, the highest returns for such a period. This happened before in 1929 and 1999. These phenomenal returns have been fueled not by fundamentals but rather by the U.S. Federal Reserve, which is trying to jumpstart the economy.

All this has taken people's eyes off gold, but it won't go on forever.

TGR: The bear market in gold equities is now four years old. This means lower gold production and less exploration. Gold production from South Africa has collapsed. Shouldn't lower gold production result in a higher gold price? Continue reading "How the Five Principles of Capital Allocation Can Mean Gold Mining Success" →

How to Position Your Portfolio for the Coming Gold Upturn

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The Gold Report: The metal mining sector is undergoing many of the same types of issues as the energy sector. What is your candid assessment of the near future for gold, silver and the base metals?

Etienne Moshevich: My outlook for the sector is very similar to that of the overall energy marketthe world needs gold and the commodity isn't going away. It may go out of favor for a couple of years, which we're experiencing now, but it seems as though the market is slowly starting to creep back up and this is the time investors need to be positioning themselves in high-quality management teams and projects before the market gets away from them.

Although many things could change, macro signs are pointing to a turn in the gold market. Even though the U.S. dollar is still the strongest and most reliable currency in the world, more and more countries seem to be shifting away from the dollar, which would definitely strengthen demand for gold. Also, if the U.S. economy falls into another recession and the Federal Reserve decides to apply another one of its quantitative easing techniques, then this will be very bullish for gold.

"Source Exploration Corp.'s past success indicates the great potential for the upcoming drill program."

One last major factor that we should consider is the possible demand from foreign central banks. We need to keep in mind that the Swiss are voting on a gold referendum that would require the Swiss National Bank to hold 20% gold reserves. Even if this doesn't go through, I'm sure there would be more pressure on it to increase gold reserves over time. I'm bullish on silver, as well, over the long term because of its industrial and technological applications.

TGR: Let's tour the field. Starting with gold, which companies do you spot as viable? Continue reading "How to Position Your Portfolio for the Coming Gold Upturn" →

Global Insecurity Is Good for Gold, Says Mike Niehuser

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The Gold Report: Gold and silver have both demonstrated explosive growth in 2015. Why has this happened, and will it continue?

Mike Niehuser: Well, I am not sure that I would categorize a higher gold price in the first part of 2015 as "explosive." Since the beginning of 2015, gold appears to be trading within a band of $1,200 to $1,300 an ounce ($1,2001,300/oz). While this is not "explosive" from a broader perspective, it is certainly a relief compared to declines in 2013, so let's just say gold has done well so far in 2015.

Despite declines over the last couple of years, gold is still well above its lows prior to Sept. 11, 2001. It has held up in spite of concerns for deflation resulting from a global economic slowdown. This has not been helped by loose monetary policies.

"Alexco Resource Corp.'s environmental business continues to grow and cover overhead while the company unlocks the exploration upside at Keno Hill."

I think the strength is in part due to what Sen. John McCain characterized as being in "an unprecedented period of global turmoil." Russia has reclaimed the Crimea and is in the process of annexing eastern Ukraine. The same could be said for insurgents in Iraq and eastern Syria. Concerns over the repayment of Greek debt, nuclear issues in Iran and an unsettled path for a maturing China should keep things interesting for gold.

Also, it is not clear how the recent collapse in oil prices will impact the economies or political stability of oil-producing nations, such as Russia and Iran. The conventional solution seems to be economic sanctions, but it has been said, "When goods stop flowing across borders, armies soon follow." At least North Korea is out of the headlines.

International anxiety may be good for gold prices as gold continues to have a place as a store of value in uncertain times.

TGR: What are your metals prices forecasts for 2015? Continue reading "Global Insecurity Is Good for Gold, Says Mike Niehuser" →

Avoid Dodos and Find Gold and Silver Miners that Can Soar

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The Gold Report: A recent Raymond James research report refers to silver as the "devil's metal" What is the story there?

Chris Thompson: Silver is much more volatile than gold. Typically when we see a weak day for the gold price, silver has a terrible day. Likewise, if we see a strong day for gold, typically silver delivers exceptional performance. Because it's so volatile, we term it the devil's metal.

TGR: If the selloff in precious metal equities is over and this is the bottom, how long do you expect the flat-lining to persist?

CT: At Raymond James, in the near term we see gold trading rangebound between $1,200 per ounce ($1,200/oz) and $1,300/oz and silver trading rangebound between $16.50/oz and $18.50/oz. We are not seeing fundamentals that would prompt a price outside of those respective ranges. We expect current price strength to continue to the end of Q1/15, followed by some weakness into the summer and then more strength toward the end of the year.

TGR: In a recent research report you warned investors about 2015 possibly being the "Year of the Dodo" for certain precious metal producers. Please explain. Continue reading "Avoid Dodos and Find Gold and Silver Miners that Can Soar" →

Is Market Sentiment Shifting to Gold?

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The Gold Report: Quite a few analysts believe 2015 will be a year of great economic volatility, as foreshadowed by what happened with oil in 2014. Do you agree?

Eric Coffin: I do think 2015 will be pretty volatile, with the potential for nasty financial surprises. We've already seen bond yields go negative in Germany, France and elsewhere, and we could see big moves in and out of different asset classes.

TGR: Could the oil price collapse be a leading indicator of a global economic slowdown?

EC: That's an oversimplification. Economic growth in China has slowed and will probably slow some more. And China is the 800-pound gorilla of commodity consumption. Estimates for worldwide growth in 2015 have recently come down but not enough to justify the drop in the oil price.

"Excelsior Mining Corp.'s Gunnison project has extremely good logistics."

The main reason for the oil price crash is oversupply. U.S. supply has grown massively due to fracking and horizontal drilling, while Libya and Iran have both added a million barrels a day. These events have disrupted the equilibrium.

TGR: Mario Draghi, president of the European Central Bank (ECB), has famously boasted he will do "whatever it takes" to save the euro. Greece will hold an election Jan. 25, and the polls tell there is a good chance the new government will reject its current arrangement with the ECB. If this occurs, can the euro be saved? Continue reading "Is Market Sentiment Shifting to Gold?" →