Wall Street Journal (December 12)
“Investors spent most of 2023 fretting about inflation and interest rates. Now they are snapping up everything from stocks and bonds to crypto and even gold.” Does the “simultaneous surge across assets” signal “the arrival of a lasting bull market” or is it “just a fleeting sugar high at the end of the Federal Reserve’s tightening cycle?” Opinions are divided.
Tags: 2023, Bonds, Bull market, Crypto, Cycle, Fed, Fleeting, Fretting, Gold, Inflation, Interest rates, Investors, Stocks, Surge, Tightening
Reuters (February 1)
“Socialist President Nicolas Maduro is under intense pressure to step down, with Venezuela in deep economic crisis and the government facing widespread international condemnation for elections last year seen as fraudulent.” It appears he is making plans “to sell 29 tonnes of gold held in Caracas to the United Arab Emirates by February in order to provide liquidity for imports of basic goods.”
Tags: Basic goods, Condemnation, Crisis, Elections, Gold, Imports, Liquidity, Maduro, Pressure, Socialist, UAE, Venezuela
New York Times (April 2)
“The prospect of job creation and short-term returns has prompted several governments in Latin America to welcome mining companies and keep regulation to a minimum,” sometimes with disastrous consequences. “The surge in reckless mining operations has provoked anger and controversy throughout the region, and it was a driving force for a remarkable law passed Wednesday in El Salvador banning mining for gold and other metals in the tiny Central American nation.” This bold new ban is unlikely to inspire copycats, but it may “prompt other countries to consider more carefully the toll mining takes on vulnerable communities and the need for tighter regulations and stronger enforcement of environmental rules.”
Tags: Anger, Controversy, El Salvador, Gold, Job creation, Latin America, Mining, Reckless, Regulation, Short-term returns
Institutional Investor (July 18)
Following a tumultuous weekend with a failed coup, another police officer shooting in the U.S., and continuing Brexit worries, investors may want to consider “whether security and geopolitical threats to stability will undermine the impact of aggressive easing actions of the world’s central banks. A recovery in the Turkish lira and global equity indices and a retreat in gold prices, seemingly fueled by the coup’s failure, suggests that at least some parts of the market believe central bank policymakers still trump security threats when it comes to financial asset valuation.”
Tags: Asset valuation, Brexit, Central banks, Easing, Equities, Failed coup, Geopolitical threats, Gold, Investors, Lira, Police, Recovery, Security, Shooting, Stability, Threats, Tumultuous, Turkey, U.S., Worries
Institutional Investor (August 27)
Gold is losing “its luster as an asset class.” Long considered a “hedge against inflation, currency volatility and geopolitical turmoil,” many experts are now questioning gold’s status as a legitimate investment. “Gold has failed to benefit from global economic and political turbulence recently…. Given that gold offers investors no yield, if it doesn’t rise in value during episodes like these, investors don’t have many reasons to hold it.”
Tags: Asset class, Currency volatility, Geopolitical turmoil, Gold, Hedge, Inflation, Investment, Investors, Turbulence, Value, Yield
Forbes (February 10, 2014)
“Beijing is becoming more dependent on the U.S. and the rest of the world for its strength and prosperity.” Though it may be the largest holder of U.S. Treasuries, this is not a sign of strength. “The idea that a government gains strength by piling up dollars or other foreign currencies is a mercantilist holdover from the 16th to 18th centuries, when France, Spain and others thought amassing gold and silver was how a country became wealthy. Trade, not hoarding, makes for a powerful economy.”
Tags: Beijing, China, Currencies, Dependent, Dollars, Economy, France, Gold, Government, Hoarding, Mercantilist, Prosperity, Silver, Spain, Strength, Trade, U.S. Treasuries, Wealth
Wall Street Journal (April 18, 2013)
“Gold’s Plunge Is Cause For Optimism.” Gold investors may not feel the same after watching their asset lose over 15% of its value since February. Still, the plunge could signal a promising trend if capital is redirected from dollar-devaluation hedges “toward investments in what has been called ‘the economy of the mind’—that is, new entrepreneurial endeavors and industries.”
Tags: Devaluation, Dollar, Economy of the mind, Gold, Investors, Plunge, Trend
Financial Times (August 7)Financial Times (August 7)
Gold has risen to $1,900 an ounce from $280 a decade ago. “The total market value of all the gold in existence…exceeds the combined capitalisation of the German, Chinese and Japanese stock markets.” When the gold bubble will end remains a question, but by some yardsticks it’s nearing a correction. “Gold is at a 120-year high (at least) relative to US house prices. Likewise, it is at a 74-year high relative to US wages, at multi-generation highs relative to wheat, coffee and cocoa.”
“Trust has broken down between IPO vendors and issuers and traditional investors in new stock offerings in Europe. Deal arrangers seem incapable of bridging the valuation gap between the two sides.” Issuer focus on achieving high valuation is colliding with investor expectation to buy at a discount. As a result, 50% of Europe’s large planned IPOs failed this year. The situation is only slightly better for IPOs of all sizes. “In the first seven months of this year, 143 initial public offerings were priced for European issuers, while 50 others, over one-third as many, were either announced and then postponed or launched and then pulled. That’s a very high failure rate.”
Wall Street Journal (July 6)
On August 22, the SEC is expected to vote on conflict minerals. A new regulation could require companies to verify and report the origins of even trace amounts of tin, tungsten, tantalum or gold. Costs could be staggering. “To comply with the law, companies will have to disclose if any of the minerals that make up the metals in their products were mined in the Congo. That means every company must trace every product back through the supply chain, and then have the findings certified by an independent third party.”
Tags: Conflict minerals, Gold, SEC, Supply chain, Tantalum, The Congo, Tin, Tungsten
Financial Times (May 6)
In a single trading session, commodities prices came crashing down on Thursday, with silver falling 13%, oil 10% and gold 4%. While the sharp correction was not predicted, a slew of rationale has subsequently been offered to objectively explain the dip. The Financial Times finds most of this reasoning specious, writing “the ease with which we explain price swings – in any direction – suggests that we do not really understand them at all.” Instead, the FT opts for a simpler explanation. “Last week’s slide probably just means that a self-inflated bubble self-deflated a little, in accordance with its own internal mass-psychological dynamics. Put simply, investors took fright.” Trying to explain what caused the fright or predict where it may lead is a fool’s game. Commodities may go up or they may go down. We cannot know.In a single trading session, commodities prices came crashing down on Thursday, with silver falling 13%, oil 10% and gold 4%. While the sharp correction was not predicted, a slew of rationale has subsequently been offered to objectively explain the dip. The Financial Times finds most of this reasoning specious, writing “the ease with which we explain price swings – in any direction – suggests that we do not really understand them at all.” Instead, the FT opts for a simpler explanation. “Last week’s slide probably just means that a self-inflated bubble self-deflated a little, in accordance with its own internal mass-psychological dynamics. Put simply, investors took fright.” Trying to explain what caused the fright or predict where it may lead is a fool’s game. Commodities may go up or they may go down. We cannot know.
Tags: Commodities, Gold, Oil, Price Swings, Silver
