SSgA SPDR Gold Shares

IAG stock could continue to gain traction due to its high operational leverage, at least as long as the upward trend in gold prices continues.

At 2:50 PM EDT on July 22, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), and Royal Gold (RGLD) gained ~1%, ~2.0% ,and ~0.77%, respectively.

Gold (IAU) (GLD) prices usually have a strong negative correlation with the US dollar (UUP). Gold, like other commodities, is denominated in the dollar.

IAMGOLD’s (IAG) 2Q17 production was 223,000 ounces of gold—growth of 26,000 ounces or 13% year-over-year (or YoY).

Gold prices plummeted on Wednesday, January 25, 2017, and gave the lowest close in recent weeks.

Gold and interest rates have a close inverse relationship. The higher the rate for Treasuries, the lower the demand for non-yield-bearing assets such as gold and silver.

At 6:05 AM EST on March 19, the West Texas Intermediate crude oil futures for May 2018 delivery were trading at $62.20 per barrel—a drop of 0.34%.

Central banks have been net buyers of gold since the beginning of the financial crisis of 2008.

Outflows from exchange-traded funds (or ETFs) led to an ~28% fall in gold prices in 2013. They sold a combined 881 tons of gold. Investors should monitor the change in ETF holdings.

Goldcorp’s (GG) all-in sustaining costs (or AISC) are falling. In 2013, its AISC was $1,031 per ounce. It expects the AISC to be in the range of $950–$1,000 for 2014.

Goldcorp (GG) reported its 3Q17 results after the market closed on October 25, 2017. It reported EPS (earnings per share) of $0.13, which beat analysts’ expectations by $0.02.

The CBOE Volatility Index suddenly rose 6.0% on November 9, 2016, after it was clear that Trump had unexpectedly clinched the election.

Cheaper oil means lower inflation. This means gold should be affected negatively since it’s usually considered a hedge against inflation.

These economic concerns and monetary stimulus expectations have decreased the probability of an interest rate hike by the US Federal Reserve, and the chances of an interest rate hike in July dropped to zero.

So what should investors be doing today? While inflation may take another year or more to get going, it’s not too early to start implementing long-term inflation hedges.

Recent readings have shown that inflation has stabilized, which is a good thing, but signs of an imminent acceleration in inflation are still scant.

Physical buying from China and India should support the demand for gold. But a rate hike by the Fed could be the catalyst that could take gold down.

Palladium has seen six out of seven down trading days as of January 12. The recent stock market slump in China, which caused global tumult, hurt palladium.

Copper is trading lower on Thursday. At 6:36 AM EST, the COMEX copper futures contract for July delivery was trading at $2.06—a decline of 1.1%.

AISC (all-in sustaining costs) are an encompassing measure that helps compare miners’ performance—a vital metric for investors. They show the company’s margin cushion at prevailing gold prices (GLD)(IAU).

It’s important to keep an eye on labor conditions since they offer a look at the future direction of gold prices and ultimately gold-backed ETFs.

Investments in the precious metals sector—including mining—substantially depend on the rate hike conundrum.

Lower ore grade increases the amount of waste stripping required—in order to extract some volume of ore—as a result of mining more tons of waste.

At 8:45 AM Eastern time, gold futures contracts for June delivery were trading at $1,298.75 per ounce, a gain of 0.23%. Silver was trading at $17.59 per ounce, a loss of 0.37%.

Precious metals often run in the opposite direction of stocks. Whenever the risk appetite of investors is high, stocks tend to perform well.

US crude oil prices (USO) (OIIL) fell by 2.2% in the week ended June 17, 2016. Crude oil closed at $47.98 per barrel on the same day.

At 2:40 PM EST on August 8, the COMEX gold futures contract for December delivery was trading at $1,341.35 per ounce—a drop of ~0.23%.

Donald Trump has been vociferous about cutting taxes. He intends to reduce the current seven tax brackets to three.

At 6:35 AM EST on October 7, the COMEX copper futures contract for December delivery was trading at $2.15 per pound—a fall of ~0.12%.

The market is anticipating the speech by the Federal Reserve chair, Janet Yellen, at the annual central bankers meeting to be held in Jackson Hole, Wyoming, on August 26.

U.S. public debt is the amount owed by the federal government in terms of outstanding treasury securities. For September 2014, U.S. debt to GDP was 102.9%.

Real interest rates are adjusted for inflation. As real interest rates rise, other investments usually become more attractive. This reduces the demand for gold and vice versa.

Although not considered safe haven assets, in the current context of high geopolitical risk and consequently volatility, investors could consider investing in sectors like energy and large cap companies.

In 2015, Goldcorp (GG) achieved record gold production of 3.5 million ounces. This is a solid 24% growth YoY. The company achieved its production guidance of 3.3–3.6 million ounces.

According to the median of 12 forecasts in a Bloomberg survey of analysts and traders, gold prices could reach as much as $1,424 per ounce by the end of the year.

Four days before the UK (EWU) decided to leave the European Union (VGK), Soros warned the markets of a “Black Friday” and a crash in the pound.

Barrick’s high financial leverage is a key investor concern. Resolving this could lead to rerating of Barrick stock, a positive for Barrick’s share price.

Goldcorp’s asset portfolio is located in politically stable, low-risk jurisdictions in the Americas. This is one of Goldcorp’s key advantages. Many gold miners are facing political instability and taxation issues.

Investors were somewhat pessimistic about gold during the last quarter of 2016. Most of the fluctuations were due to the news of the interest rate hike.

Tracking China and India’s inflation figures can give you insight into gold prices’ future direction. It also provides you a look into gold-backed exchange-traded funds (or ETFs) like the SPDR Gold Shares (GLD).

India imported gold worth $1.97 billion in June—a fall of 37% YoY (year-over-year). That’s quite low compared to a rise of 10.50% YoY in May.

As gold rose initially, the revival in the equity markets shadowed the precious metal. Silver maintained its gains. It’s used as an industrial metal.

China’s better-than-expected growth in real estate investments in April supported copper prices on Monday.

In Q3, billionaire investor Leon Cooperman’s top five holdings were Fiserv, Alphabet, United Continental, Chimera Investment, and Cigna.

Yamana Gold’s (AUY) valuation multiple has varied widely between 5.1x and 15.1x.

The fraction of total gold output held by central banks around the world has continued to decrease over the last decade and a sharp reversal in this trend is unlikely.

Central bank policies can have a significant impact on gold price. Central banks are a large gold holder. They own ~30,500 tons of gold. This is close to 20% of the gold ever mined. As a result, their policies on gold sales, gold purchases, and other monetary policies can have a significant impact on gold price.

Billionaire investor and bond guru Jeffrey Gundlach also shared his view on bond yields in an interview with CNBC.

Many economists, like the Nobel Prize–winning Paul Krugman, believe that the Fed acted as a “white knight” in 2008, saving the global economy in the dire aftermath of the financial crisis.

Goldcorp continued with its lower cost trend, as the key cost metric AISC (all-in sustaining costs) fell 21% YoY and remained almost flat QoQ in 3Q15.