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.

Richard Bernstein on making money In an interview with CNBC, prominent investor Richard Bernstein shared his views on global equity markets and how to make money in 2018. In the previous part, we saw that he advised investors to stay invested in the market as long as corporate earnings are accelerating. Bernstein also said that the best way […]

China is the largest gold producer in the world, accounting for 14% of total production. East Asia as a whole produces 21% of the total newly mined gold. Latin America produces around 18% of the total.

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.

The SPDR S&P 500 ETF Trust (SPY) traded flat as investors were cautious about Greece’s debt deal negotiations with its Eurozone partners.

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.

The 10-year Treasury yield still appears attractive relative to sovereign rates elsewhere in the world. In addition, longer-dated Treasuries also look more attractive than those with two- to five-year durations.

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.

Iamgold (IAG) generated revenues of $277.4 million in Q2 2018, which represents a YoY (year-over-year) growth of 1.1%.

Paulson holdings include bullish positions in Allergan (AGN), Mylan (MYL), and Time Warner Cable (TWC). Its event-driven fund, Advantage, lost 29% in 2014.

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.

At 6:15 AM EST on June 14, the WTI crude oil futures for July delivery were trading at $66.84 per barrel—a gain of 0.32%.

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.

Gold touched a one-month low on Thursday, September 28, due to the rise of the US dollar over the speculation of another rate hike in December 2017.

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.

At 6:30 AM EST on December 15, the West Texas Intermediate crude oil futures for January 2018 delivery were trading at $57.34 per barrel—a gain of 0.53%.

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.

Among senior gold miners (GDX), Newmont Mining (NEM) has the second-highest forward enterprise value-to-EBITDA multiple of 8.1x.

Goldman Sachs expects WTI crude oil price to be $55 per barrel in 1Q17 and 2Q17. These estimates were raised from $45 and $50 per barrel, respectively.

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%.

AGI, SLW, ABX, and KGC currently have RSI levels of 50.3, 74.3, 44.4, and 50, respectively.

After the $5 billion stock market collapse in China, investors fled to gold. Even a third straight annual decline in prices has failed to make gold lusterless in China.

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.

India and China make up 50.0% of the global demand for physical gold. When gold prices fall, physical gold-buying provides support for gold.

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%.

Last week, financial markets opened on a strong note as Hurricane Irma died down and the damage was less than anticipated.

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.

IAMGOLD (IAG) generated revenue of $244.8 million in the third quarter, a YoY (year-over-year) fall of 9%.

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.

Macroeconomic analysis should be forward-looking, but trying to anticipate policy changes based on the Fed’s projections has been a losing strategy.

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.

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.

US stocks represented by SPY and SPXL fell on Friday, December 18. The oil ETF fell by 0.7% due to the oil supply glut. US WTI crude fell by $0.22.

Despite headwinds in the form of soft wage growth, low inflation, and a falling labor participation rate, the labor market looks robust.

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.

At 4:45 AM EST on February 7, the West Texas Intermediate crude oil futures for March 2018 delivery were trading at $63.36 per barrel—a fall of 0.08%.

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.

Equities are the best-performing asset class over the long run. The CAGR for equities over the last 20 years, not considering the dividends, is 13%.

The US dollar index was trading on a lower note on March 31, 2016, at 2:30 PM EST as unemployment added further uncertainty to the US rate hike.

In times of escalating geopolitical or economic concerns, gold often acts as a safe-haven asset. This year, however, gold’s safe-haven appeal seems to be somewhat tarnished.

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.

On November 20, Jeffrey Gundlach told Reuters that investors haven’t shown an appetite for Treasuries even though US stock markets have fallen.

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.

Gundlach also had something to say about assets other than bonds and stocks like gold (GLD) and the US dollar (UUP).

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.

According to Barclays (BCS), Goldcorp (GG) has the potential to provide nearly 30% upside from its closing price of $13.80 on June 23, 2017.

Money supply is the total amount of currency and other liquid instruments in circulation in an economy. Money supply data is usually collected and published by the country’s central bank.

The trend of soft wage growth persisted in February. Wage growth hasn’t been able to break out of its rut. It continues to stay at a YoY level of 2%.

Gold prices (GLD) recorded their first weekly gain last week after six weeks of continued losses. What changed?

When gold prices fell by 11% in 2015, GDX amplified that loss by returning -25%. In 2016, GDX amplified gold’s gains positively.

On November 9, 2016, the iShares 20+ Year Treasury Bond ETF (TLT) fell 4.2% following Donald Trump’s win.

Newmont Mining Corporation (NEM) is the world’s second largest gold producer and the only gold company included in the S&P 500 Index.

Kinross Gold (KGC) produced 671,267 GEOs (gold equivalent ounces) in 2Q16, which represents a 1% YoY (year-over-year) rise but a sequential decrease of 2%.

Gold is often touted as the safe-haven asset that investors embrace in times of economic and political uncertainty.

The main factor that caps economic growth and inflation for a country is the amount of debt the country carries. Debt, if used in the right way, can boost economic growth—but it can also damage the economy.

On November 25, the SPDR S&P 500 ETF closed on a flat note ahead of the holiday. It closed at $209.3. The Energy Select Sector SPDR ETF fell by 0.81% on the day.

Many prominent investors have a strong dislike of bitcoin (BTC). Jeffrey Gundlach, who believes Bitcoin could easily rise 25% and return to a $5,000 price point, still doesn’t advise investing in it.

Eldorado Gold (EGO) is Canada’s second-largest gold mining company, whose price is trading at $2.22 per share as of January 28, 2016.

So far, Barrick Gold (GOLD) stock has been trading in a narrow range in the fourth quarter. The stock has risen almost 30% in 2019.

Barrick Gold (ABX) stock has fallen 30% year-to-date, and it has underperformed relative to its peers in the gold sector. This is mainly due to the firm’s high debt profile.

AngloGold Ashanti (AU) it is less exposed to South Africa than other South African miners. About 28% of its production comes from South Africa.

The US dollar (UUP) is gaining strength after a short dry spell.

The SPDR Gold Trust ETF (GLD) has fallen ~8.0% year-to-date and ~11.0% from its April peak.

This series analyzes gold prices and market fundamentals. June gold futures trading on the COMEX slightly declined by 0.02% on May 22, 2015.

Gold doesn’t give any returns besides appreciation. Appreciation doesn’t always happen. As a result, gold has to compete against assets that yield something. When the return on the alternate assets begins to rise, the demand for gold falls. In a scenario where the real interest rates are rising continuously, the demand for gold—as an investment—will start falling.

After falling for two consecutive trading days, gold regained its strength on Wednesday, June 29, amid increasing concerns over the stability of the global markets.

The Cortez mine is one of the largest and lowest-cost mines in the world, with huge upside exploration potential. It is Barrick’s largest-producing mine and contributes close to 15% of the total production.

Due to more uncertainty and the positive macro backdrop offered by the Fed, gold prices (IAU) (JNUG) could get another significant boost.

Silver has outperformed gold year-to-date (or YTD). The SPDR Gold Shares ETF (GLD) has risen 17% YTD, while the iShares Silver Trust ETF (SLV) has risen 24%.