Franco-Nevada Corporation

When it comes to investing in stocks, Berkshire Hathway’s (BRK.A) chair, Warren Buffett, and Bridgewater’s founder, Ray Dalio, have similar advice.

Royalty and streaming mining companies’ valuation multiples (GOAU) (NUGT) are usually higher than those of their mining peers.

On January 21, CIBC raised its target price for gold from $1,300 per ounce to $1,350 per ounce for 2019.

Dalio’s Bridgewater Associates built its position in gold ETFs mainly after the second quarter of 2017.

Royalty and streaming mining companies’ (GOAU) (SIL) multiples are usually higher than those of their mining peers.

While gold miners have been out of favor for a long time, that may be about to change. As uncertainty in the market is increasing, gold prices are poised to rise.

According to the COT report for the week ended August 10, money managers were net short on gold for the eighth straight week.

According to the COT report for the week ended August 3, money managers were net short on gold for the seventh straight week.

According to the COT report for the week ended June 26, 2018, money managers were barely net long on gold with just over 4,000 net speculative long contracts.

The primary reason for the fall in precious metals on Monday was the US dollar, which strengthened against the basket of other world currencies.

The Global X Silver Miners ETF (SIL) and the VanEck Vectors Gold Miners ETF (GDX) have fallen about 7.6% and 1.8%, respectively, during the last month.

In this article, we’ll focus on the correlations of selected miners with gold.

Besides overall market volatility, the most important determinant of precious metal prices, especially gold’s (IAU) (SLV), is the US dollar.

Over the past three years, AEM, FNV, and ABX have seen a declining correlation to gold.

US ten-year Treasury note yields (IEF) hit a high mark of approximately 3.1% today—a record since July 2011.

Over the past three years, PAAS, AUY, and GOLD have seen declining correlations with gold, while FNV saw a mixed correlation to gold.

Among the four major streaming companies we’ll discuss in this part of our series, Franco-Nevada (FNV) has the highest forward EV-to-EBITDA multiple of 22.8x.

When analyzing precious metals and precious metal mining companies, it’s essential to analyze the relationship between precious metals.

In this part of the series, we’ll focus on the gold-platinum spread, which compares the price performances of the two metals.

In addition to the US dollar playing on precious metals, US interest rates and the decisions by the Federal Reserve have also historically had a substantial impact on these safe havens.

Among these four miners, Newmont has shown the highest correlation to gold, while Franco Nevada has seen the lowest correlation on a YTD (year-to-date) basis.

In this part of our series, we’ll look at the correlation between gold and four mining stocks: Franco-Nevada (FNV), Coeur Mining (CDE), Kinross Gold (KGC), and Eldorado Gold (EGO).

Mining stocks tend to move in accordance with gold prices.

Goldcorp (GG), Randgold Resources (GOLD), Hecla Mining (HL), and Franco-Nevada (FNV) are trading at $13.30, $101.70, $3.55, and $68.16, respectively.

It was widely expected that precious metals and miners would react negatively after the FOMC (Federal Open Market Committee) meeting.

On Wednesday, March 14, 2018, precious metals fell, but miners had a mix of ups and downs.

Precious metal miners had a reasonably good start to 2018. Overall, on a YTD (year-to-date) basis, precious metals’ reactions have been mixed.

The US Dollar Index averaged 96.6 in 2017. A Reuters poll estimates that the US Dollar Index could end this year at ~88.7.

Precious metal mining stocks tend to take their cues from gold prices. Gold is the most crucial of the four precious metals, and its direction becomes the direction for the other three metals most of the time.

Despite the impressive rise of bitcoin in 2017, its increased price volatility and complex mining process have limited its demand.

Another critical factor that has been affecting the price movement of precious metals is overall market volatility.

Gold and silver spot prices fell 0.40% and 1.2%, respectively, on Friday, February 16.

Royalty and streaming companies Royalty and streaming companies’ business model differs greatly from that of other precious metal miners (RING), mainly because royalty and streaming companies do not own mines. These companies make upfront payments to gain a right to a fixed percentage of future silver or gold mine production. Additional payments are then made […]

GDX and GLD The VanEck Vectors Gold Miners ETF (GDX) tracks the performance of the NYSE (New York Stock Exchange) ARCA Gold Miners Index. Its major holdings are senior and intermediate precious metal miners listed in the United States and Canada. Currently, Newmont Mining (NEM), Barrick Gold (ABX), and Newcrest Mining are the fund’s top […]

On Friday, February 9, gold prices saw some sign of revival as equities continued tumbling and haven bids pulled precious metals higher.

After disappointing the markets for a long time, the US dollar (UUP) has finally rallied. The US non-farm payrolls data released on February 2, 2018, were better than expected.

Gold prices (GLD) rose ~13% in 2017. On top of that, January 2018 saw a ~3% rise in prices.

The iShares MSCI Global Gold Mining ETF (RING) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) have risen 5.0% and 1.1%, respectively, during the last one-month period.

Looking ahead for 2018, industry analysts stated in a Bloomberg article that they expect gold to perform better early in the year led, by the “January effect.”

Commitment of Traders report The CFTC (Commodity Futures Trading Commission) releases the Commitment of Traders (or COT) report every Friday. It presents a breakdown of the open interest positions of all major contracts in the futures market up until the Tuesday prior. It has four main categories of traders: producers swap dealers money managers other reportables […]

Starting 2018 on the wrong foot After declining by ~10% in 2017, the US dollar (UUP) has extended its fall in 2018. It has fallen by ~2% against a basket of currencies so far, trading close to three-year lows. There are many potential reasons for the slump in the dollar. Some of them are related to […]

Gold started 2018 on a strong note, in line with the new-year price rallies it has seen over the last few years.

As we know, precious metals are closely tied to movements in US interest rates. Bonds and equities are both yield-bearing assets, so a rise in yields often causes a slump in demand for assets such as gold and silver.

Gold is a non-yield bearing asset that reacts negatively to rises in the interest rate.

Most mining stocks have risen over the past one month due to the revival in gold prices.

New Gold, Agnico-Eagle Mines, Franco-Nevada, and Cia de Minas Buenaventura have call-implied volatilities of 45.2%, 24.4%, 21.7%, and 31.2%, respectively.

Precious metal mining companies have witnessed a rebound in their prices alongside precious metals.

Analysts are calling for average revenues of $678.5 million for 2017 for Franco-Nevada (FNV).

Due to its solid performance YTD (year-to-date) and bright outlook, Royal Gold (RGLD) is attracting a lot of interest from the analyst community.

The performance of gold and silver in 2017 is weaker than most other industrial metals. There are many factors that explain the weaker performance of precious metals.

A brief analysis of mining stocks is crucial when investors are parking their money in the precious metals market, specifically in mining companies.

Miners’ correlation with gold Gold is regarded as the most important precious metal, and most miners are known to follow its price trends. In this part of the series, we’ll look at Wheaton Precious Metals (SLW), Franco-Nevada (FNV), Coeur Mining (CDE), and Barrick Gold (ABX). The prices of mining-based funds are also closely related to those of […]

Precious metals rebounded after the Fed increased the interest rate on December 13.

RGLD is being covered by 13 Wall Street analysts right now, of which 54% recommend a “buy” for the stock, while 46% recommend a “hold.”

Gold, silver, and platinum all had a down day on Tuesday, December 13, mainly due to speculations over the Federal Reserve’s pending interest rate decision.

Although the US dollar has been the most important element contributing to changes in precious metals, the upcoming December meeting of the Federal Reserve has taken all of investors’ attention.

J.P. Morgan sees gold prices averaging $1,295 per ounce in 2018, with second-half prices averaging $1,340 per ounce.

Gold prices touched an almost four-month low in early December. After breaching $1,300 per ounce in September due to geopolitical tensions, gold prices have mostly been on a downtrend.

Royalty and streaming mining companies (RING) (SIL) have business models that are considered quite conservative because they don’t own mines.

While geopolitical tensions, low US inflation, and uncertain policy reforms have been supporting gold, the other key factors have been working against it.

Gold is the most dominant among the four precious metals. It’s important that investors analyze how miners are moving compared to precious metals.

Gold remains the most dominant among the four precious metals. It’s crucial that investors analyze how the miners are moving versus precious metals.

Correlation analysis Mining stocks’ performance usually depends on precious metal prices. Correlation analysis can give investors some perspective on how mining stocks relate to precious metals, especially gold. In this part of our series, we’ll look at four miners—Royal Gold (RGLD), Goldcorp (GG), Franco-Nevada (FNV), and Randgold Resources (GOLD)—and their correlation with gold. On Monday, the ETFS Physical […]

As we analyze the performance of the precious metals market, it’s crucial to look at the core mining stocks and also their technical details.

Besides the impact of interest rates, there are also other global indicators that could play on precious metals—the most important being the US dollar.

The Sprott Gold Miners (SGDM) and Global X Silver Miners (SIL) have fallen 0.21% and 1.9%, respectively, on a 30-day-trailing basis.

Gold touched its three-week high level on Thursday, November 9, of $1,289.5 and closed at $1,287.5 per ounce.

The past week has been beneficial for precious metals—gold, silver, platinum, and palladium rose 0.42%, 1.5%, 0.63%, and 1.5%, respectively.

China’s gold consumption in 2017 has picked up in 2017 after being lukewarm in 2016.

Gold prices (GLD) have risen ~10.5% as of November 7, 2017, YTD (year-to-date).

When investors want to park their money in miners, it’s crucial that they analyze the correlations of mining stocks with gold.

On November 1, Alamos Gold, B2Gold, Newmont Mining, and Franco-Nevada had implied volatility readings of 46.9%, 54.8%, 25.9%, and 25.5%, respectively.

As of October 27, 2017, First Majestic (AG), Franco-Nevada (FNV), Coeur Mining (CDE), and Harmony Gold (HMY) had implied volatility readings of 54.6%, 25.5%, 46.7%, and 53.3%, respectively.

Franco-Nevada and Silver Wheaton have seen an upward trend in their correlations with gold.

Due to the falling precious metal prices in the past week, mining stocks and their RSI levels have also fallen.

Gold, silver, and platinum have fallen 1.7% apiece during the past five trading days, while palladium has fallen 2.7%.

When investors consider parking money in the mining sector, there are a few crucial indicators that they should watch.

On a YTD (year-to-date) basis, RGLD, AEM, and FNV have risen 38.3%, 7.3%, and 33.3%, respectively, while Goldcorp has seen a YTD loss of 3.4%.

The Physical Silver Shares (SIVR) and Physical Swiss Gold Shares (SGOL) witnessed rises on Friday, October 16, climbing 0.98% and 0.81%, respectively.

Precious metal mining companies gave a mixed reaction on Thursday, October 12.

Mining funds that have a strong relationship to precious metals are the Global X Silver Miners (SIL) and the VanEck Vectors Gold Miners (GDX).

All the four precious metals saw an up day on Monday, October 9, 2017.

Credit Suisse (CS) downgraded Franco-Nevada (FNV) from “outperform”’ to “neutral” on September 25, 2017.

Mining stocks showed a mixed performance on Thursday, October 5, despite the latest rebound in gold.

Wheaton Precious Metals trades at a forward EV-to-EBITDA multiple of 16.6x, which is a discount of 19% to the sector average multiple.

On September 29, Alamos, First Majestic Silver, Franco-Nevada, and Pan American had call implied volatilities of 46.9%, 54.6%, 25.5%, and 34%, respectively.

The negative sentiment toward gold prevailed on Friday, September 29, the last trading day of the month. Gold futures for November expiration fell 0.3%.

North Korean tensions Like the US dollar, global tensions can be responsible for precious metal price fluctuations. North Korea has interpreted US president Donald Trump’s comments as a declaration of war, stating that Pyongyang has the right to take countermeasures, including shooting down US bombers outside of its airspace. The ongoing unrest in the Korean peninsula has led to a global […]

B2Gold and Royal Gold have seen downward-trending correlations with gold, while Franco-Nevada and Randgold have seen mixed correlation trends.

Among the four major streaming companies we’re looking at in this part, Franco-Nevada (FNV) has the highest forward EV-to-EBITDA multiple of 28.8x, a 35.0% premium to its peers.

Gold prices have been on a roller coaster ride, given the on and off situation with North Korea. A missile test and gold’s safe-haven appeal have propelled prices higher, and then they’ve fallen back again.

In this part of our series, we’ll look at the relationships that some miners have with the precious metals they mine.

Precious metals saw a down day on Monday, September 18. Gold, silver, and platinum fell 1.1%, 3.1%, and 1.1%, respectively, on the day.

According to the latest COT report, large precious metal speculators continued to increase their bullish bets on gold futures.

As mining companies are known to closely track precious metals, in this article, we’ll look at how a few miners have moved over the past month as well as their technical indicators.

Most mining stocks have risen over the past month due to a substantial rebound in the prices of precious metals.

Among the four miners we’re looking at, Gold Fields has the highest correlation to gold on a YTD basis, while Sibanye Gold has the lowest correlation to gold.

Royalty and streaming companies are quite different than other precious metal miners in terms of business model.

Yamana Gold has the highest correlation with gold, while Pan American Silver has the lowest correlation.

On September 1, 2017, Franco-Nevada, Randgold Resources, Yamana, and AngloGold had volatilities of 34.0%, 37.9%, 58.2%, and 51.5%, respectively.