Okay, I’ve been investing for quite a few years now, but I’m the first to admit that I don’t understand much of what goes on in global financial markets. So, can you explain why precious metals are being sold off so heavily right when you’d think people would be buying and positioning themselves for this supposed commodities super cycle and fiat currency devaluations etc?
Precious metals firmed overnight despite rising bond yields and oil prices, a bullish read through in our opinion. If and when Scott Bessent & Co can arrest the deteriorating bond market, gold looks poised to pop higher, though we feel it’s going to be nigh on impossible for him to get yields lower until we see oil prices soften – cue President Trump’s negotiation skills.
Gold posted a modest gain last week after the strong Jobs Report pushed the precious metal down more than US$40/oz on Friday – rising intertest rates is a headwind for gold. Moving forward precious metals are in a by a tug-of-war between Fed hawkishness (bearish) and a weakening dollar plus central bank demand (bullish), with this weeks CPI likely to deliver the next outsized move.
Newmont is the largest listed gold producer in the world and for us it’s acting as an excellent roadmap for the sector, and miners in general. While consolidation of recent strong gains looks likely we’re still looking for the US$135bn giant to punch to new highs in the coming months.
The gold sector’s likely to experience some profit taking this morning following the Fed Chairs hawkish comments on Friday night – gold ETFs fell ~4% in US trade. However, after seeing VAU surge over 50% in just 4-weeks we intend to be slightly pedantic with our entry level, we can always pay up later in the coming weeks if the deep pullback doesn’t materialise.
The “Debasement Trade” is one of the big winners of the new measures by Scott Bessent & Co, it’s essentially investors protecting themselves against the risk that money buys less over time. When governments run large deficits, debt keeps rising and policymakers try to contain borrowing costs, investors can lose confidence in traditional currencies, particularly the US dollar, and shift toward scarce assets such as gold, silver, and bitcoin. Put simply, governments can issue more dollars and debt, but they cannot print more gold.
Good Morning, They say we should ignore the noise, but the noise about precious metals (gold, silver, platinum etc) is very loud. Warnings about pending price crashes and, conversely, outrageous price targets that are hard to believe. So, I will ignore the noise and listen to you. I already know that you’re bullish, but exactly where and why are these metals stocks going in your opinion? Thank you, as always.
RRL +3.28%: delivered a huge step-up in FY26 earnings as the unhedged gold producer captured record Australian-dollar gold prices.
NST +6.21%: produced another strong year of earnings growth as elevated gold prices flowed through to the bottom line, with the share price move today helped by a solid uptick in bullion prices overnight. Revenue was bang in line with consensus, but FY27 will be less about the gold price and more about execution at the new processing plant.
