Sentiment with gold miners looks low, gauging from the GDX and GDXJ charts. This makes me wonder if they aren't really digging the yellow metal up so much. Ok, the price of gold has dropped lately, however, given the demand is still there from foreign banks and governments, surely things are looking rosy for them?
https://news.italy24.press/trends/687105.html
LONDON (Reuters) – A growing number of countries are repatriating gold reserves as protection against Western-imposed sanctions on Russia, according to an Invesco survey of central banks and sovereign wealth funds.
Last year's financial market crash has caused widespread losses for sovereign wealth fund managers who are "fundamentally" rethinking their strategies assuming rising inflation and geopolitical tensions will persist.
More than 85% of the 85 sovereign wealth funds and 57 central banks that participated in Invesco's annual "Global Sovereign Asset Management Study" believe that inflation will be higher in the next decade than in the last.
Gold and emerging market bonds are considered a good bet in this context, but the freeze of nearly half of Russia's $640 billion gold and foreign exchange reserves, imposed by the West in response to the invasion of Ukraine , seems to have triggered a change.
The poll showed that a "substantial share" of central banks are concerned about the precedent being set. Nearly 60% of respondents said the situation has made gold more attractive, while 68% are keeping reserves at home compared to 50% in 2020.
A central bank, whose name the study does not name, said: "We used to keep it (gold) in London ... but now we have moved it back to our country to keep it as a safe haven asset and to keep it safe" .
Rod Ringrow – Invesco's head of government governance, who oversaw the report – said this was a widely held view.
"'If the gold is mine, then I want it in my country' has been the mantra we've seen over the last year or so," he continued.
Geopolitical concerns, coupled with opportunities in emerging markets, are also encouraging some central banks to diversify against the dollar.
A growing 7% believe that rising US debt is also a negative factor for the greenback, even though most still do not see an alternative to the dollar as the world's reserve currency. The percentage of respondents who view the Chinese yuan as a potential competitor has dropped to 18% from 29% last year.
Nearly 80% of the 142 institutions surveyed see geopolitical tensions as the greatest risk for the next decade, while 83% cited inflation as a concern for the next 12 months.
Infrastructure is now considered the most attractive asset class, especially projects involving the generation of renewable energy.
Concerns about China have made India one of the most attractive countries for investments for the second consecutive year, while the trend of 'near-shoring' – in which companies build plants closer to where they sell their products – is supporting countries such as Mexico, Indonesia and Brazil.
In addition to China, Britain and Italy are also seen as less attractive, while rising interest rates, coupled with the habits of working from home and online shopping that have become ingrained during the Covid-19 pandemic, make so that real estate is now the least attractive private asset.
According to Ringrow, the best performing investment funds last year were those that recognized the risks posed by rising asset prices and were willing to make material changes to their portfolios. The same will happen in the future.
"Funds and central banks are now trying to cope with higher inflation," he said. "It's a big change."
also at https://www.ft.com/content/76bddb74-4ddb-4e36-b70c-c0e26d8bf557
Quote from: arekaywhy on Aug 05, 2022, 06:00 AMSentiment with gold miners looks low, gauging from the GDX and GDXJ charts. This makes me wonder if they aren't really digging the yellow metal up so much. Ok, the price of gold has dropped lately, however, given the demand is still there from foreign banks and governments, surely things are looking rosy for them?
Gold about 9.5% off it highs
Sold 20% of my producers two weeks prior( fluke)
Sold 5% of NMG added to other developer explorers which are so under valued eg one valued at $80 an ounce in the ground.Egg on face or winning a race we will see.
Silver on an absolute tear. I have a small holding that used to be worth almost meaningless money in terms of the size of my portfolio a year ago but the price of silver has tripled in the last year and from reports I have been reading with industrial demand, the shortage of supply, the fact that the world market has been in production deficit for the last 5 years, explosive growth with its use in data centers, solar panels and talk that certain brands of solid state EV batteries will require about 1kg of silver per 100 kw/hr battery I think the tear has legs and I'm not the only one.
I listened into the CEO of Hecla mining on CNBC the other day https://www.hecla.com/ opining on the demand supply imbalance and he says we're about 200m ounces a year short and there's no easy way to fix the supply shortfall with new mines taking years to consent and little in the way of prospects. Silver normally a by-product of gold mines. Anyway Hecla has quadrupled in the last 6 months so obviously they're well positioned.
I just sold all my silver miners for a very tidy profit. The structural deficit etc is real, but I feel the pricing is getting exuberant. The old saying for commodities - "the cure for high prices is high prices". Industrial users of silver are now massively incentivized to reduce and substitute usage, etc. Anyway, I'm extremely happy with my profit so will now not look at the price for another year or so ;)
Hi Ho Silver, now $US112 ! Nearly quadrupled in the last year ! The last 5 years of chronic supply shortages which have lead to huge draw-downs of bullion in vaults is making its presence felt. The only viable solution to ongoing supply shortages in the medium term is higher prices to suppress demand but there are no metal substitutes for many of the industrial uses that Silver is used for.
Could be just the beginning of a super cycle for Silver in my opinion. Gold silver ratio used to be only 2.5:1 in ancient Egyptian times. Could history repeat and we see Silver head to over $US1,000 an ounce over the next decade ?
Disc: Still a very small position for me.