Reports Project Gold Mines Are Expected to Produce More Than Ever In 2021
FinancialNewsMedia.com News Commentary
PALM BEACH, Fla., April 14, 2021 /PRNewswire/ -- Gold has again risen to all-time highs because investors have again rushed to its traditional 'safe haven'. It rises not despite the pandemic… but because of the global crisis. The trading price is predicted by many to continue to soar and miners are also looking to increase production. A report from Singapore Bullion Market Association, spoke about the Metals Report issued in London which said: "Turning to 2021, Metals Focus remains bullish towards gold. We are confident that as policy rates remain low and fiscal spending persists, inflows of institutional money into the yellow metal will continue. Low rates and yields are typically positive for gold, as they minimize the opportunity cost of holding the zero-yielding metal. Moreover, given exceptionally low yields (or, in other words, high bond prices), the effectiveness of bonds as a hedge against market turmoil, and in particular equity market corrections, is hampered as it becomes harder to see yields fall much more. This forces investors towards other portfolio diversifiers, something that should continue to benefit gold. Related to this point, policy accommodation has resulted in exceptionally strong equity market performance. While this has been a boon for investors, it also amplifies their need to diversify portfolios and gold will remain an instrument to do so." Active stocks in the mining markets this week include Calibre Mining Corp. (OTCQX: CXBMF) (TSX: CXB), Franco-Nevada Corporation (NYSE: FNV) (TSX: FNV), Lundin Mining Corporation (TSX: LUN) (OTCPK: LUNMF), Endeavour Mining Corporation (TSX: EDV) (OTCQX: EDVMF), First Majestic Silver Corp. (NYSE: AG) (TSX: FR).
Singapore Bullion continued: "Loose fiscal and monetary policy also creates future inflation risks. It is worth remembering here that this argument was instrumental in fueling the gold price rally that followed the 2008 global financial crisis, only to be proven wrong later. In spite of this precedent, many investors feel that given the far more extensive stimulus provided during the Covid-19 crisis, the likelihood of inflationary pressures is much higher. As such, even though Metals Focus' house view is that high inflation seems unlikely, we believe that the fear of it will continue to benefit gold over the next 12 months or so. Last but not least, we believe that the dollar will likely remain weak for some time, adding further price support. We therefore see gold once again breaking the $2,000 mark in the next few months and reaching new all-time highs later in the year."
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