Precious Metals

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Rickards - >>> AI, Gold and Nuclear War


BY JAMES RICKARDS

APRIL 16, 2024


https://dailyreckoning.com/ai-gold-and-nuclear-war/


AI, Gold and Nuclear War

So-called artificial intelligence (AI) is taking the world by storm. Meanwhile, gold has shot up like a rocket over the past couple of months.

In mid-February, gold was trading at $1,990. Two months later, gold is trading above $2,400 — a $410 gain in just two months.

So here’s a question:

Is there a connection between AI and gold? It seems like an odd question. But as it turns out, the answer is yes. And surprisingly, there has been for decades. It involves the Cold War between the U.S. and the Soviet Union.

In the early 1980s, the KGB was deeply concerned about the possibility of a nuclear first strike by the United States. At the time, Yuri Andropov was head of the KGB.

Andropov’s fear of a nuclear first strike by the U.S. was based in part on the 1980 election of Ronald Reagan and Reagan’s plan to install Pershing II intermediate-range missiles in Europe.

Those missiles could be armed with nuclear warheads and could strike the Soviet Union within minutes of being launched. This put Soviet nuclear forces on a hair-trigger alert. They adopted a “launch on warning” posture.

This means that as soon as credible evidence of a planned first strike was discovered, the Soviet Union would launch its own first strike to avoid destruction of its forces.

The irony was that the U.S. had no actual plans to launch a first strike, but the Soviet Union didn’t know that. Reagan’s speeches about the “evil empire” did nothing to calm Soviet concerns.

AI and Nuclear Readiness

In response, the Soviets developed a primitive (by today’s standards) AI system called VRYAN. That’s a Russian acronym for: sudden nuclear missile attack.

VRYAN took about 40,000 military, economic and political inputs and computed the relative strength of the Soviet Union compared with the United States expressed as a percentage output. The model used a value of 100% for equivalence of the USSR to the U.S.

The Soviet leadership was comfortable that the U.S. would not launch a nuclear first strike if the USSR could maintain a value of 60%, although they viewed 70% as providing a more comfortable margin.

A VRYAN output of 40% was considered the critical threshold at which the U.S. might feel it could launch a first strike with acceptable risk that the Soviets would not be able to mount a successful second strike.

VRYAN output values were in steady decline in the dangerous period from 1981–1984 (in 1984, the VRYAN output had declined to 45%).

The VRYAN AI system relied on by the KGB and the Soviet Politburo was an important factor in the Soviet decision in 1981 to vastly increase intelligence collections aimed at detecting U.S. preparations for a first strike.

Close Call

This intelligence collection effort was complicated to the point of extreme danger by the fact that the U.S. and NATO were conducting a war game in late 1983, code-named Able Archer 83. This war game was to practice a nuclear strike on the Soviet Union.

It turned out that the U.S. was rehearsing a nuclear first strike at the same exact time that the KGB was looking for evidence of a nuclear first strike. Able Archer 83 provided the KGB with more than enough reason to suspect the U.S. was indeed preparing for a first strike under cover of a war game.

VRYAN’s AI output on relative U.S. strength was compounded by massive U.S. intelligence failures regarding Soviet intentions. U.S. intelligence analysts assumed that the future would resemble the past, and that Soviet alerts were really propaganda designed to halt the U.S. deployment of Pershing II intermediate-range nuclear missiles in Europe.

U.S. intelligence analysts were also guilty of what’s called mirror imaging: the belief that because you know your own intentions, your opponents must share your view. In this case, the U.S. assumed that because they had no intention to launch a first strike, the Soviets must have understood that intention and would therefore have no cause for concern.

In fact, the Soviets had the opposite view based in part on VRYAN AI output.

The world came extremely close to World War III and a nuclear holocaust as a result of this sequence of events and misperception of intentions. It was only when one U.S. general decided not to escalate in the face of Soviet first strike preparations that both sides deescalated, and the crisis eventually receded.

The information above wasn’t fully understood by either side at the time of the escalation. On the U.S. side, it wasn’t until the 1990 publication of a study entitled The Soviet War Scare by the President’s Foreign Intelligence Advisory Board (PFIAB) that something like the full story was revealed.

Nuclear War Threats: Good For Gold

This study was originally classified above TOP SECRET. (Most citizens assume that TOP SECRET is the highest level of classification. But there are secret access codes that limit circulation of certain documents even among those cleared with TOP SECRET access.

In the case of The Soviet War Scare, those restrictions had the code names UMBRA, GAMMA, ININTEL, NOFORN, NOCONTRACT, ORCON. I can’t discuss my own TOP SECRET clearances, but I can inform you that very few intelligence operatives would have been able to view the PFIAB report based on those restrictions.

So what does all this have to do with gold?

Buried inside The Soviet War Scare was this passage about the U.S. assessment of KGB collection requirements related to a potential nuclear war:

VRYAN Collection Requirements – Throughout the early 1980s, VRYAN requirements were the No. 1 (and urgent) collection priority for Soviet intelligence… They were tasked to collect:… monitoring of the flow of money and gold on Wall Street as well as the movement of high-grade jewelry, collections of rare paintings and similar items. (This was regarded as useful geostrategic information.) (Emphasis added)

And there it is! The U.S. assessed that the KGB tracked the movement of gold as a leading indicator of nuclear attack.

I didn’t find this completely surprising. From 2004–2010, I was co-director of a CIA effort called Project Prophesy that looked at capital markets activity as an early warning of an enemy attack.

Gold was one of the valuable assets that was on our list of items to track. The idea was that if a general or political leader had advance information about an attack, they’d convert their wealth to gold in safekeeping in order to financially survive the fallout.

The bottom line is that this intelligence reporting and AI system are not ancient history. Today, the world is closer to nuclear war than at any time since the Able Archer scare in 1983. Gold is once again on the move, having risen from $1,830 per ounce on Oct. 5, 2023, to over $2,400 today. That’s a 31% gain in six months.

Is this a coincidence? Hardly. A close correlation of huge gains in gold with serious threats of nuclear war is exactly what one should expect.

Unfortunately, those threats of nuclear war are not going away soon. One need only look at the Iranian attack on Israel this past weekend and the possibilities of further escalation.

There are also situations in Ukraine, Russia, NATO, Gaza, the Red Sea and the Suez Canal revealing that the world is a more dangerous place than it has been for decades.

That’s bad news for the world but good news for gold investors. The rally we’ve seen in the past six months is just getting started.

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>>> Why Are Gold Bar Sales Surging at Costco?


The New York Times

by Rebecca Carballo

April 11, 2024


https://www.yahoo.com/news/why-gold-bar-sales-surging-175059774.html


Alongside its $1.50 hot dog and soda combo, gallon tubs of mayonnaise and value packs of socks, Costco, the warehouse retailer, has been selling gold bars since October.

Now, Costco is selling up to $200 million worth of gold and silver each month, according to an analysis from Wells Fargo.

Online forums and Reddit threads have cropped up where customers give one another advice on how to purchase the bars before they sell out.

“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars, yes, but when we load them on the site, they’re typically gone within a few hours,” Richard Galanti, Costco’s executive vice president and chief financial officer, said in an earnings call in September.

Costco started selling gold bars in October.

Costco is now selling one-ounce, 24-karat gold bars, according to its online store. The bars can be purchased only by members, and the price varies based on market rates. As of Thursday, the bars were sold out for members online, but The Wall Street Journal reported that shoppers purchased them for around $2,000 in December.

Costco has also been selling silver coins, advertised as 99.9% pure silver, since January, according to an analyst report from Wells Fargo.

People buy gold in times of turmoil.

The precious metal has set a series of records as it surged to $2,350 per troy ounce, up roughly $300 since the start of March.

Buying gold becomes more common in times of economic turmoil. Although the U.S. economic outlook has improved and inflation has slowed, it remains higher than the targets from the Federal Reserve, said Sadiq S. Adatia, the chief investment officer for BMO Global Asset Management. And on Wednesday, a key inflation rate was revealed to be stronger than expected.

Investors have said they were puzzled about the rally.

Geopolitical concerns could also be a factor in an increasing interest in gold, Adatia said. There has been more interest in gold since Ukraine’s currency collapsed after Russia’s invasion, he said.

For those looking to purchase gold for the first time, Costco provides familiarity and ease, Adatia said.

“They make it convenient,” he said. “People can physically go in and pick it up and that’s it, versus opening up an account and buying gold shares.”

How much is Costco profiting from this?

Probably not too much.

Given its pricing and shipping costs, it’s likely a “very low profit business at best,” analysts with Wells Fargo wrote in a note to clients on Tuesday.

Costco sold more than $100 million of gold during its first quarter, or the three-month period ending on Sept. 30 last year, Galanti said on a December earnings call. However, those sales have likely grown since then and may now be running at $100 million to $200 million per month, which could increase its sales figures by 1%.

“The reason that we looked at this is that it’s becoming a larger contributor to sales for them,” said Edward Kelly, managing director of equity research at Wells Fargo. “It’s not that $100 or $200 million a month is a lot for Costco, but it’s new business and they didn’t have that business last year.”

In the three-month period ending on Dec. 31, Costco’s e-commerce sales grew 18% compared with the same period a year earlier, driven in part by demand for the precious metals, Galanti told investors on an earnings call in March.

Investing in metals can be volatile.

The Commodity Futures Trading Commission has urged caution when buying gold because precious metals can be highly volatile.

“Like other commodities, precious metal prices rise as demand goes up, so when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the agency said in a statement.

The commission likely puts that warning out to signal that it is not a guaranteed investment, said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report. He recommends the average person invest 3% to 5% of their assets in gold.

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[gfp927z]

Goldman recently came out bullish on gold (previous post), so that's a factor in the current move, and another is that Wall Street often bases its decisions on TA / charts, and this big breakout is attracting attention. I figure numerous 'macro' factors are also at work, including the growing US debt bomb, the BRICS plans for their own gold linked currency to compete with the US dollar, etc. As we know, central banks have been piling into gold for years, so global demand grows and mining output has lagged.

So the 'stars + planets' are finally aligning to produce the big breakout. The professional 'gold bugs' are always bullish, and have their reputations and livelihoods wrapped up in the bullish side, via newsletters, book sales, etc. But it looks like gold's appeal is broadening, and some of the Bitcoin crowd might also be switching over to gold. Seeing gold being sold at Costco, and selling out within hours, may have also attracted some attention. And anyone who follows TA / charts couldn't miss the extremely bullish chart pattern that had developed.

Based on the charts, this move is probably just beginning. But as you said, the big question is when does the suppression mechanism kick in? If gold is allowed to run up too much it could reinforce an inflationary vibe and thus work against the Fed's goals. So we'll see how long the party lasts, but so far it's been fun :o)




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>> silver <<

Silver also coming to life :o) Looking at the SLV chart, as with gold there is a quasi 12 year cup + handle (bullish), with the 3 year 'cup' having a quasi inverted head + shoulders (also bullish). It's much less classic than on the gold chart, but is easier to see now that silver is climbing. Also the 'neckline' on the silver chart is sloped, where gold's is flat and thus more 'classic'.

Anyway, looks like silver is playing catch up to gold. There is also a potential motivation for price suppression with silver, since it represents a key input cost for solar panels. Therefore keeping silver prices lower helps keep solar cost competitive with traditional types of energy. Not sure how much price suppression of silver has been going on in recent years, but like gold. it does seem to have peculiar 'smack downs' at times.



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>>> Gold: The Everything Hedge

By Jim Rickards

https://dailyreckoning.com/goldilocks-is-gonna-get-it/

Gold is trading at $2,211 per ounce this afternoon. Since its interim low of $1,832 per ounce on Oct. 5, 2023, gold has posted a 21% gain. That’s in less than six months. Almost half of that gain occurred in the one-month period from Feb. 11 to March 11.

That overall gain is especially impressive considering gold had been stuck in a fairly narrow range of $1,650–2,050 for the past two years. That’s a range of about 10% above and below the midpoint of $1,850. Starting from the high end of that range, gold traversed the entire range to the upside and beyond in just one month.

Now, any reference to “gold prices” is an interesting one. If you treat gold as a commodity, then the price per ounce measured in dollars is one way to think about price.

On the other hand, if you think of gold as money (as I do) then the dollar price is not really a price — it’s a cross-rate similar to euro/dollar (about $1.08 today) or dollar/yen (about 152 today). When analysts say the “price” of gold is $2,211 per ounce, I think of that data as showing the gold/dollar cross-rate = $2,211.

That’s useful because there are two sides to a cross-rate. While most analysts say that gold has rallied from $2,000 to $2,211 per ounce, it is just as valid and perhaps more useful to say that the dollar has crashed from 1/2,000 per ounce to 1/2,211 per ounce.

In this analysis, gold is constant (by weight) and the dollar gets stronger or weaker relative to gold. All of the recent market action points to a weaker dollar.

This mode of analysis also solves another market riddle. Given huge U.S. budget deficits, unprecedented levels of U.S. national debt, slow growth, rising unemployment and persistent inflation, how is it possible that the dollar has been so “strong” lately?

The answer is that it’s only been strong relative to the euro, yen, sterling and some other reserve currencies and as measured by certain dollar indexes (DXY, Bloomberg, etc.) composed of baskets of currencies (but not gold).

But that’s often because those other currencies are issued by countries with debt and growth problems even worse than the U.S.’ Those currencies dropping against the dollar have the look and feel of a good old-fashioned currency war.

It’s only when you use gold as your metric that the real weakness in the dollar becomes apparent, as it should. In effect, certain currencies are weakening against each other but all currencies are weakening against gold.

Returning to the “higher gold price” frame, there are a number of reasons for this trend. The first factor is simple supply and demand. Mining output and recycled gold have been about flat for the past eight years running between 1,100 metric tonnes and 1,250 metric tonnes per year.

At the same time, central bank demand for gold has surged from less than 100 metric tonnes in 2010 to 1,100 metric tonnes in 2022, a 1,000% increase in 12 years. Central bank gold demand remained strong in 2023 with 800 metric tonnes acquired through Sept. 30, 2023. That puts central bank gold demand on track for a new record in 2023. There’s no sign of that demand slowing in 2024.

Constant output with surging demand by central banks does not by itself explain the recent surge in gold prices, but it is a contributor. Importantly, continued strong demand by central banks puts a floor under gold prices. This sets up what we describe as an asymmetric trade where downside is limited but upside is open-ended.

The second factor driving gold prices higher is the need for hedging. This is not the same as inflation hedging. It covers a larger list of risks including geopolitical risk, risks of escalation in the Ukraine and Gaza wars, Houthi efforts to close the Red Sea and Suez Canal, increasing risks of war with China and the intrinsic risk of a senile president of the United States.

As the list of risks grows longer and potentially more dangerous, the need for a hedging asset such as gold that does not rely on any nation-state for its value increases. I call gold the everything hedge.

Finally, gold prices are being driven higher by U.S. threats to steal $300 billion in U.S. Treasury securities from the Russian Federation. Those assets were legally purchased by the Central Bank of Russia as part of their reserve position.

The actual securities are held in custody in digital form at European banks, U.S. banks and the Brussels-based Euroclear clearinghouse. Only about $20 billion of those Treasury securities are held by U.S. banks; the majority are held by Euroclear. Those assets were frozen by the United States at the outbreak of the war in Ukraine.

Freezing assets means the Russians cannot collect interest or sell or transfer the assets or pledge them as collateral. Asset freezes are used frequently by the U.S. including in the cases of Iran, Syria, Cuba, North Korea, Venezuela and other nations. Often the assets are frozen for years but ultimately released to the owner as happened in the case of Iran after 2012.

Now the U.S. wants to go further and actually seize the assets, which may be viewed as outright theft under international law. The U.S. proposes to use the $300 billion to finance the war in Ukraine. European entities have expressed considerable uncertainty about this plan but the U.S. has maintained the pressure and wants to complete the theft before the June and July summits of G7 leaders and NATO members.

If the U.S. steals these assets, Russia will likely confiscate an equivalent amount of industrial and commercial assets located in Russia and owned by German, French, and Italian interests among others.

The bottom line is that if U.S. Treasury securities are not a safe investment, then securities of Germany, Italy, France, the U.K. and Japan are no better. The only reserve asset free of this kind of digital theft is gold. Nations are beginning to diversify into gold in order to insulate themselves from digital confiscation by the collective West.

Finally, there’s an interesting bit of math here, which I’ve explained in the past that shows each $100 per ounce increment in the price of gold is a smaller percentage gain because the denominator is larger.

That makes each $100 milestone ($2,400, $2,500, $2,600) easier to reach than the one before. People don’t really notice this; they just focus on the dollar amount of the gains. But this explains how price rallies gather crazy momentum.

All of these trends — flat output, rising central bank demand, hedging, protection against digital confiscation and simple momentum — will continue. Based on those trends, one would expect the gold price rally to continue as well.

The trend is gold’s friend.

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Goldman likes gold - >>> Gold’s 'record march higher set to continue,' Goldman says


Yahoo Finance

Ines Ferré

March 25, 2024


https://finance.yahoo.com/news/golds-record-march-higher-set-to-continue-goldman-says-164325765.html


Gold’s roughly 8% month-to-date rally has room to grow with the precious metal poised to hit $2,300 an ounce by year-end, according to Goldman Sachs analysts.

On Monday futures gained to trade as high as $2,182 an ounce. The precious metal is considered a safe haven during times of geopolitical tensions and when interest rates decrease. Last week, the Federal Reserve continued to signal that it would lower interest rates three times this year.

The Fed meeting “reinforced the market’s (and ours) expectations that three cuts are likely this year, lending renewed support to gold to test and surpass March’s earlier record high,” wrote a team of analysts led by Samantha Dart.

Goldman Sachs analysts upgraded their average gold price forecast for 2024 from $2,090 to $2,180 per ounce, targeting a move to $2,300 by the end of the year.

The analysts forecast gold prices in the near term will move toward another consolidation phase, barring any geopolitical surprise. However, “a substantive retracement lower will likely also be limited by resilience in physical buying channels,” wrote Dart, citing Chinese imports of the precious metal.

“Nonetheless, in the midterm we continue to hold a constructive view on gold underpinned by eventual Fed easing, which should crucially reactivate the largely dormant ETF buying,” wrote Dart.

Bullion's price increases have been disconnected from recent outflows seen in gold-related ETFs. Strategists believe investors have been rotating money into bitcoin ETFs as the token roared toward new highs earlier this month.

Central banks have been buying up gold at historic levels, helping to drive up demand over the past couple of years.

Adjusted for inflation, gold hit a record in 1980 when it hit $850 per ounce, which would equal almost $3,200 in today's dollars.

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[fung_derf]

The world's central banks still own a huge amount of gold, so they obviously see it as having value.

Well, we don't know this to be true. Many believe all that Ft Know is protecting is the truth that nothing is inside.
Nixon took us off the gold system long ago. I've said for many years that collecting gold is....well .....Fool's gold. Other than at a Pawn Shop (of course they take their commission right off the top).
And trading gold is far worse, ever check into these companies that sell gold? They control the market and the markups.
Diamonds used to be the top notch gem to have, but now they can make artificial ones.
Water.....the only true commodity I can think of without a replacement.....unless of course you accept the words of that great Politician President Dwayne Elizondo Mountain Dew Camacho, who claims Brawndo is better for you than water.

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Derf, >> what gold is used for any more <<

Yes, that's the problem with owning gold since other than jewelry, its only real use historically is as money or backing for money. A tiny amount is used in electronics, but it's negligible. So the question is when will gold return to be a backing for money, ala the Bretton Woods system or something similar? The world's central banks still own a huge amount of gold, so they obviously see it as having value. The new BRICS currency being set up will reportedly be linked to gold, and once operational this could force the dollar and euro into a similar arrangement to remain competitive.

Jim Rickards recommends having 10% of one's investible assets in gold. It's tough to sit in gold when you can get 4-5% in Treasuries or the money market, so it's a dilemma. The timeline for the BRICS gold-linked currency has slipped, but with the US debt now parabolic, I figure it makes sense to at least have something in gold. Silver also seems logical since it usually follows the gold price loosely, and also has many industrial uses, in solar panels, etc. But as the saying goes - 'everything in moderation' :o)


Forbes article -

>>> The BRICs Go For Gold


https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172356566


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[fung_derf]

Yes, copper is needed. Much like silver used to be a necessity for video equipment.
I don't know what gold is used for any more.

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>>> Why Costco is selling gold bars and silver coins


CNN

by Nathaniel Meyersohn

March 7, 2024


https://finance.yahoo.com/news/why-costco-selling-gold-bars-173244588.html


Costco locked in $1.50 hot dog-soda loyalists. Now, it’s chasing a different clientele: precious metal investors and collectors.

Costco recently started selling silver coins for the first time, finance chief Richard Galanti told CNN.

The company is selling 25-count tubes of 1 oz. Canada Maple Leaf Silver Coins online for $675. The front of the coins features a maple leaf, and King Charles III is on the back. The coins are non-refundable, and members can purchase a maximum of five.

Costco is trying to replicate its recent success with gold bars. It began selling $2,000 gold bars online in September and sold more than $100 million worth of the bars last quarter.

But Costco’s move is more about marketing than just about increasing sales. After all, not many people are actually stashing away gold bars in their homes.

It’s selling precious metals to try to reinforce its “treasure hunt” brand image where it peppers its stores with unexpected, limited-time items to keep shoppers coming back.

“We try to create an attitude that, if you see it, you ought to buy it because chances are it ain’t going to be there next time,” Costco’s founder once said. “That’s the treasure-hunt aspect. We constantly buy that stuff and intentionally run out of it from time to time.”

Costco is also selling precious metals as they become more valuable. Gold prices have notched record highs this week. Silver futures are up 21% in the past year.

Precious metal prices have gone up because investors are betting that the Federal Reserve will cut interest rates in the back half of the year.

Gold and silver are considered to be one of the most resilient investments. When interest rates fall, holding income-paying assets (like bonds) becomes less appealing than owning the precious metals. When interest rates are low, falling or — as in this case — expected to fall, demand for Treasury bonds ebbs, and precious metals, which don’t pay out any interest, become relatively more attractive.

Some investors also believe them to be a hedge against inflation, wagering that they will hold their value even if it begins to surge, even though metals face price fluctuations like any other commodity.

Costco’s success in selling the metals comes as the company continues to report strong profits from the pandemic in 2020, when customers rushed to stores to load up on groceries and household staples. Millions of first-time customers signed up for club memberships during the pandemic and have held on to them, pushing Costco’s member rolls to all-time highs.

Shares of Costco (COST) have rallied 60% over the past year.

Costco reported quarterly earnings Thursday. The company’s sales at stores open for at least one year increased 5.6%, but fell short of analyst forecasts.

Costco said inflation was roughly flat during the quarter, which allowed it to reduce prices on some items.

Galanti told analysts on a call Thursday that Costco cut reading glasses, for example, from $18.99 to $16.99 and cut a 48-count of batteries from $17.99 to $15.99.

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[gfp927z]

Derf, With copper, a few years back I had an ETF (CPER), but it ended up causing problems at tax time. Using SCCO and other mining stocks seems like a good approach.

One thing with miners in general though is the geopolitical risk. With periodic leadership changes in these countries, it can result in problems like nationalization of the mines, etc. Historically there's a lot of 'payola' that goes on to buy off the local politicians. There's also the increasing environmental rules to contend with.

But copper is a 'must have' for the 'electric everything' paradigm, so it seems like a logical area for investors. The longer term SCCO chart has been volatile, but overall looks pretty decent. I see they recently lowered their dividend by 20%, though it's still a nice yield.



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More on SCCO - >>> Decoding Southern Copper Corp (SCCO): A Strategic SWOT Insight


GuruFocus Research

March 1, 2024


https://finance.yahoo.com/news/decoding-southern-copper-corp-scco-050928095.html


Insightful analysis of Southern Copper Corp's strengths, including its vast copper reserves and robust production capabilities.

Examination of potential weaknesses, such as dependency on energy prices and supply chain vulnerabilities.

Exploration of opportunities in the context of the global shift towards clean energy and copper's critical role.

Assessment of threats including environmental regulations and market volatility.


On February 29, 2024, Southern Copper Corporation (NYSE:SCCO) filed its annual 10-K report, providing a comprehensive overview of its financial performance and operational strategies. As an integrated producer of copper and other minerals, SCCO operates mining, smelting, and refining facilities in Peru and Mexico. The company's revenue for the fiscal year ended December 31, 2023, totaled $9,895.8 million, a slight decrease from the previous year, primarily due to lower metal prices and sales volumes. Despite this, SCCO managed to increase copper production by 1.8% and molybdenum production by 2.3%. However, net income attributable to SCCO saw an 8.1% decrease, settling at $2,425.2 million. These financial metrics set the stage for a detailed SWOT analysis, providing investors with a clear picture of SCCO's market position and future prospects.

Strengths

World-Leading Copper Reserves and Production: Southern Copper Corp boasts the largest copper reserves globally, positioning it as a top player in the industry. Its significant scale of operations across Peru and Mexico, as highlighted in the 10-K filing, ensures a steady production of copper, molybdenum, zinc, and silver. In 2023, SCCO's copper mine production increased by 1.8% to 2,008.4 million pounds, demonstrating its robust production capabilities. This strength is not only a testament to the company's resource wealth but also to its operational efficiency and expertise in mining and processing.

Strategic Market Positioning: SCCO's market positioning is strategic, with its operations spread across key geographic locations in The Americas, Europe, and Asia. This diversified market presence helps mitigate regional risks and capitalizes on global demand for copper and other metals. The company's long-standing presence in the industry, since 1952, and its listing on both the New York and Lima Stock Exchanges further reinforce its market credibility and investor confidence.

Weaknesses

Energy and Resource Dependency: SCCO's operations are heavily reliant on fuel, electricity, and water, which constituted approximately 29% of its total production cost in 2023. Fluctuations in energy prices and potential shortages of water supply pose significant risks to the company's cost structure and operational continuity. The 10-K filing acknowledges these vulnerabilities, indicating that any disruptions in the supply of these critical resources could adversely affect production and expansion opportunities.

Supply Chain and Operational Risks: The global shipping industry's current challenges, including port congestion and container shortages, present risks to SCCO's supply chain. The company's reliance on third-party energy resources and potential delays in product transportation could impact sales agreements and operational efficiency. Additionally, the need for political risk insurance, which SCCO does not intend to obtain, could expose the company to unforeseen geopolitical risks.

Opportunities

Increasing Demand for Copper in Clean Energy Transition: The global push towards clean energy and electrification presents a significant opportunity for SCCO, given copper's essential role in these technologies. The company's commitment to responsible production practices and certifications under international standards aligns with the increasing expectations for sustainable copper sourcing. This positions SCCO favorably to capitalize on the growing demand for environmentally responsible copper production.

Expansion and Diversification: SCCO's exploration activities in Argentina, Chile, and Ecuador, as well as its existing operations, offer opportunities for expansion and diversification of its mineral portfolio. The company's ability to leverage its vast reserves and operational expertise could lead to increased production, new market entries, and enhanced revenue streams in the future.

Threats

Market Volatility and Price Sensitivity: SCCO's financial results are susceptible to fluctuations in metal prices and global economic conditions. The 2023 decrease in net sales was influenced by lower copper and zinc prices, highlighting the company's sensitivity to market volatility. Such economic uncertainties and potential downturns could adversely affect demand for SCCO's products and, consequently, its revenue and profitability.

Environmental Regulations and Legal Challenges: The mining industry is subject to stringent environmental regulations, which can impose significant costs and operational constraints. SCCO's operations, particularly in Peru, face stricter environmental rules that could impact the company's ability to operate efficiently. Additionally, the lack of certain types of insurance coverage for environmental damage or hazards could expose SCCO to legal and financial risks.

In conclusion, Southern Copper Corp (NYSE:SCCO) exhibits a strong foundation with its vast copper reserves and strategic market positioning. However, it must navigate the complexities of energy dependency and supply chain risks. Opportunities in the clean energy sector and potential for expansion present promising avenues for growth. Nonetheless, market volatility and stringent environmental regulations pose significant threats that SCCO must address proactively. By leveraging its strengths and addressing its weaknesses, SCCO can capitalize on emerging opportunities while mitigating the impact of potential threats.

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[gfp927z]

Derf, With SCCO, it looks like China is cutting their production (article excerpt below), so SCCO and FCX are way up today. Nice move :o) -


>>> Copper and Miner Shares Jump After China Output Cut


Wall Street Journal

by Bob Henderson

3-13-24


https://www.wsj.com/livecoverage/stock-market-today-dow-jones-03-13-2024/card/copper-and-miner-shares-jump-after-china-output-cut-N6dm8hihs8R9lQZOIZBZ?siteid=yhoof2


Copper futures and shares of mining companies popped Wednesday after some of China's smelters agreed to cut production.

Copper futures for March delivery gained 3.25% to close at $4.05 a pound, their highest settlement value in nearly 11 months. Shares of diggers Freeport-McMoRan and Southern Copper were recently up 7.9% and 11%, respectively.

The production cuts were reported by Reuters, which said China's top smelters agreed Wednesday to reduce production at some loss-making plants to cope with a shortage of raw material...

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[fung_derf]

Geez you've got a ton of boards!!!
So, while I tell people buying gold is awful, last August I put some money into copper via $SCCO.
Today it's up 10%! What's up wit dat?

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>>> The world’s appetite for solar panels is squeezing silver supply


Bloomberg News

July 3, 2023


https://www.mining.com/web/the-worlds-appetite-for-solar-panels-is-squeezing-silver-supply/


Changes to solar panel technology are accelerating demand for silver, a phenomenon that’s widening a supply deficit for the metal with little additional mine production on the horizon.

Silver, in paste form, provides a conductive layer on the front and the back of silicon solar cells. But the industry is now beginning to make more efficient versions of cells that use a lot more of the metal, which is set to boost already-increasing consumption.

Solar is still a fairly small part of overall silver demand, but it’s growing. It’s forecast to make up 14% of consumption this year, up from around 5% in 2014, according to a report from The Silver Institute, an industry association. Much of the growth is coming from China, which is on track to install more panels this year than the entire total in the US.

Solar is a “great example of how inelastic demand for silver is,” said Gregor Gregersen, founder of Singapore-based dealer Silver Bullion. The solar industry has evolved to become much more efficient with using smaller amounts of silver, but that’s now changing, he said.

The standard passivated emitter and rear contact cell will likely be overtaken in the next two to three years by tunnel oxide passivated contact and heterojunction structures, according to BloombergNEF. While PERC cells need about 10 milligrams of silver per watt, TOPCon cells require 13 milligrams and heterojunction 22 milligrams.

At the same time, supply is starting to look tight. It was flat last year, even as demand rose by nearly a fifth, figures from The Silver Institute show. This year, production is forecast to increase by 2% while industrial consumption climbs 4%.

The trouble for silver buyers is that cranking up supply is far from easy, given the rarity of primary mines. About 80% of supply of the metal comes from lead, zinc, copper and gold projects, with silver a by-product.

And in an environment where miners are already reluctant to commit to large new projects, lower margins in silver compared with other precious and industrial metals mean positive price signals aren’t enough to crank up output. Even newly approved projects could be a decade away from production.

The result is a strain on supply so significant that a study from the University of New South Wales forecasts the solar sector could exhaust between 85–98% of global silver reserves by 2050. The volumes of silver used per cell will increase and it could take about five to 10 years to bring them back to current levels, according to Brett Hallam, one of the authors of the paper.

Chinese solar companies, however, are actively exploring using cheaper alternatives like electroplated copper, though so far results have been mixed. Technologies that use cheaper metals are now sufficiently advanced, and will soon be put into mass production once silver prices surge, according to Zhong Baoshen, chairman of Longi Green Energy Technology Co., the world’s biggest panel manufacturer.

Silver is currently trading at about $22.70 an ounce. It’s dropped around 5% this year, but is well above where it was before surging in 2020 as the pandemic buoyed demand.

“Substitution will look more interesting when silver’s at say $30 an ounce as opposed to $22 to $23,” said Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd. and one of the authors of the silver institute report. There won’t be a “doomsday scenario” where we run out of silver, but “the market will restore an equilibrium at a higher price,” he said.

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>>> Goldman says ‘shine is returning' for gold as investors ramp up bets on rate cuts


by Jenni Reid

CNBC

November 27, 2023


https://www.nbcchicago.com/news/business/money-report/goldman-says-shine-is-returning-for-gold-as-investors-ramp-up-bets-on-rate-cuts/3287739/


...Analysts at Goldman Sachs said in a note Sunday on the metals outlook for 2024 that gold's "shine is returning."

"The potential upside in gold prices will be closely tied to U.S. real rates and dollar moves, but we also expect persistent strong consumer demand from China and India, alongside central bank buying to offset downward pressures from upside growth surprises and rate cut repricing," they said.

Bank of America analysts, meanwhile, said in a Sunday note that the commodities team's base case was for gold to appreciate from the second quarter of 2024 as "real rates are pushed lower by the Fed cutting."

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>>> Costco's Gold Bars Are Selling Out 'Within A Few Hours'— Here Are 3 Other Ways To Invest In The Yellow Metal


Benzinga

by Jing Pan

Oct 12, 2023


https://finance.yahoo.com/news/costcos-gold-bars-selling-within-152139775.html


Everyone knows you can leave Costco Wholesale with a cart brimming with oversized tubs of peanut butter, a TV larger than your living room wall and enough toilet paper to last a decade. But did you know that the warehouse chain sells gold bars, too?

Costco has started selling 1-ounce gold bars. You can choose from two variations: a 1-ounce gold PAMP Suisse Lady Fortuna Veriscan bar and a 1-ounce gold bar from Rand Refinery.

Both types are available online only and are limited to two per member. They are nonrefundable.

Given that gold bars aren't really a typical grocery list item, you might think that they'd linger unnoticed on Costco's website. But demand has been surprisingly strong.

During Costco's latest earnings conference call, Chief Financial Officer Richard Galanti said, "I've gotten a couple of calls that people have seen online that we've been selling gold — 1-ounce gold bars. Yes, but when we load them on the site, they're typically gone within a few hours, and we limit two per member."

Costco's website indicates that both bars are out of stock as of Oct. 10.

Why Do People Hoard Gold?

People own gold for various reasons — the yellow metal has served as a store of value for thousands of years.

Unlike fiat money, which can be produced in unlimited quantities by central banks, the precious metal has inherent scarcity, making it a hedge against inflation.

At the same time, gold historically has been recognized as a safe-haven asset, providing investors with a hedge against economic uncertainty and geopolitical risks. In times of political unrest, wars and other crises, the yellow metal has often been sought as a refuge, given its global recognition and value.

These days, there are plenty of ways to gain access to the metal — and you don't have to be a member at Costco to do it.

Investing In Gold

The most direct way to own gold is by purchasing physical bullion. While Costco's gold bars might be out of stock — and sell out quickly when they are in stock — there are other reputable online dealers and platforms where you can readily acquire the precious metal. Your local bullion shop may also carry various gold coins and bars.

Second, rather than owning the metal directly, you can also invest in companies that mine it. By buying shares in gold mining companies, you're essentially placing a bet on the company's ability to profitably mine and sell gold. This method introduces the complexities of stock investing, such as assessing a company's management, mining costs and overall financial health. While this method could be more volatile than direct gold ownership, it offers the opportunity for potential dividends and capital appreciation.

In addition, investors can also invest in exchange-traded funds (ETFs) that specialize in gold. These funds track the price of gold and trade on stock exchanges so it's easy to buy and sell them. If you want to get gold exposure in your portfolio without worrying about storage or authenticity, gold ETFs deserve a serious look. However, it's essential to be aware of any associated fees or expenses, which can eat into potential returns.

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>>> Silver coins, promised profits, and an empty vault: How a silver dealer’s slow theft of investors’ precious American Eagle coins ended in a $146m fine


Fortune

by Eleanor Pringle

July 4, 2023


https://finance.yahoo.com/news/silver-coins-promised-profits-empty-115839138.html


Hundreds of depositors who handed millions to a silver dealer in exchange for precious minted coins were told their vaults were actually empty following an investigation by the U.S. Commodity Futures Trading Commission (CFTC).

Two firms run by precious metals dealer Robert Higgins have been ordered to pay out $112.7 million to the victims of an alleged complex fraudulent scheme, and $33 million in a civil monetary penalty.

The investigation into Higgins and two connected companies began last year.

According to a statement from the CFTC, between 2014 and 2022 Higgins conducted a fraudulent silver leasing scheme via two companies: Argent Asset Group LLC (Argent) and First State Depository Company, LLC.

The scheme

The plot, sold to customers as the 'Maximus Program', offered to pay owners of silver coins a lease fee in exchange for Argent's use of the commodity.

The payments were on a "scale" and would increase or decrease depending on how many of their coins the client was willing to offer.

The coins were either already owned by the customers, or could supposedly be purchased through Argent, and were apparently in storage at a vault owned by First State Depository Company in Delaware.

Customers were also told their investments were guaranteed and fully insured.

Coins such as these—silver American Eagle dollars—are often purchased by investors who want to see something tangible for their money, as opposed to government bonds or stocks.

People buy the coins because—although they only have a $1 face value—they are made up of 99.9% fine silver, and thus hold their value as a precious metal as opposed to as a currency.

The bullions are also produced by the U.S. Mint, which guarantees their authenticity and are minted—or stamped—in limited numbers to guarantee their rarity. Currently, uncirculated silver 1oz coins from the 2023 release can be bought for $76 each. (actually $32)

The clients were also under the impression they had an eye on their income from the coins, as they were sent monthly reports from the company which prosecutors allege "falsely indicat[ed] that the assets remained safely stored at FSD."

Vanishing coins

Court documents show that vast quantities of the coins apparently stored at the FSD facilities simply did not exist.

Documents published on June 20 reveal that accountants from Baker Tilly attended the vault to conduct an inventory check and found that nearly $113 million in client and customer assets were missing.

"In some instances, they found empty boxes at FSD with a customer’s or client’s name on it, or boxes that did not contain metal but instead held an “IOU” of sorts—a piece of paper stating the quantity of metal that should have been stored there," the document seen by Fortune continues.

It goes on to add that in some customer cases no records had been kept at all—not even an empty box with their name on it.

Further inventories seen by Fortune show that Baker Tilly had expected to find around 1.2 million Silver American Eagle coins and instead discovered just under 380,000.

Likewise, the accountants also expected to find 11,125 Gold American Eagle coins and discovered just 1,936.

As a result, attorneys for the CFTC allege that the defendants "misappropriated" the coins, either using or selling them for their own benefit.

The CFTC also claims that some customers who had paid for more bullions never got them, with the parties instead pocketing the cash.

The CFTC's director of enforcement, Ian McGinley, said he was committed to "rooting out fraud" in the precious metals market.

However, the body cautioned that although the damages had been awarded to customers there is no guarantee they will get the funds back as the defendants may not have enough assets.

Customers looking for updates on the case will be able to find them on the First State Depository Company website which has been taken over by administrators.

Representatives for Higgins did not immediately respond when approached by Fortune for comment.

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>>> US puts sanctions on gold firms suspected of funding Russia's Wagner mercenaries


Reuters

By Daphne Psaledakis and Humeyra Pamuk

June 27, 2023


https://www.msn.com/en-us/money/markets/us-puts-sanctions-on-gold-firms-suspected-of-funding-russias-wagner-mercenaries/ar-AA1d7Hxq


WASHINGTON (Reuters) - The United States on Tuesday imposed sanctions on companies in the United Arab Emirates, Central African Republic and Russia, accusing them of engaging in illicit gold dealings to fund Russia's Wagner Group mercenary force.

The U.S. Treasury Department in a statement said it slapped sanctions on four companies connected to the Wagner Group and its leader, Yevgeny Prigozhin, and said the illicit gold dealings fund the militia to sustain and expand its armed forces, including in Ukraine and Africa.

"The Wagner Group funds its brutal operations in part by exploiting natural resources in countries like the Central African Republic and Mali. The United States will continue to target the Wagner Group’s revenue streams to degrade its expansion and violence in Africa, Ukraine, and anywhere else," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement.

The U.S. State Department said that any action against Wagner was unrelated to an aborted mutiny last weekend.

Wagner has fought in Libya, Syria, the Central African Republic, Mali and other countries, and has fought the bloodiest battles of the 16-month war in Ukraine. It was founded in 2014 after Russia annexed Ukraine's Crimea peninsula and started supporting pro-Russia separatists in Ukraine's eastern Donbas region.

Central African Republic-based Midas Resources SARLU and Diamville SAU, UAE-based Industrial Resources General Trading and Russia-based Limited Liability Company DM were hit with sanctions in Tuesday's action.

Washington also imposed sanctions on Andrey Nikolayevich Ivanov, a Russian national the Treasury accused of being an executive in the Wagner Group and said worked closely with senior Malian officials on weapons deals, mining concerns and other Wagner activities in the country.

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Franco-Nevada Corporation - >>> A Canada-based streaming and royalty company. It has a diversified portfolio, with agreements tied to gold, silver, the platinum group metals (PGMs), iron ore, and oil and gas. In the third quarter of 2022, 55% of its revenue came from gold.


https://www.fool.com/investing/stock-market/market-sectors/materials/gold-stocks/


A major benefit of Franco-Nevada's focus on royalties and streaming is that it reduces risk. It doesn’t face the capital and operating cost overruns that have historically plagued mining companies. At the same time, Franco-Nevada’s agreements position it to profit as its mining partners complete exploration and expansion projects.

Franco-Nevada's streaming and royalty contracts provide it with the ability to generate lots of cash by selling the physical commodities it receives. That cash flow enables it to invest in new deals and pay a dividend.

Franco-Nevada has increased its dividend each year since its initial public offering (IPO) in 2008, hitting a milestone 15 consecutive years in 2022. The company also boasts a debt-free balance sheet -- a rarity in the mining industry -- giving it even more financial flexibility to invest in new royalty and streaming agreements.

Because Franco-Nevada can profit from gold mining without exposure to the risks of mine development, its stock has historically outperformed the price of gold and other gold mining stocks. All of these factors make it an ideal gold stock investment.

Also, for those interested in ESG factors, the company said in its 2022 asset handbook that it has a goal of achieving 40% diverse representation between the board and senior management as a group by 2025. As The Motley Fool Co-Founder David Gardner says, "Invest for the world you want to see."

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>>> Gold’s Breakout: It’s Not the Inflation


BY JAMES RICKARDS

JANUARY 23, 2023


https://dailyreckoning.com/golds-breakout-its-not-the-inflation/


Gold’s Breakout: It’s Not the Inflation

Most assets have a poor record over the past year. Gold is one of the few assets that posted a gain — not a major gain, but a gain.

Gold has really taken off since late October, from below $1,630 to almost $1,930 today. That’s a major move. What’s going on?

You might want to argue that it has to do with inflation. The trouble with that argument is that (official) inflation has been coming down for the past few months. Meanwhile, gold seemed to massively underperform with respect to the very serious inflation we saw earlier last year.

So again, why are we seeing a gold spike now? The most likely answer lies with central banks and geopolitics.

Central banks as a whole, led by Russia and China, purchased 399 metric tonnes of gold in the third quarter of 2022. (Fourth-quarter data are not yet available.)

That’s the most gold ever purchased by central banks in a single calendar quarter. It represents over 1% of all the gold held by all central banks combined.

If that pace continues or increases, it would amount to an increase of over 4% per year in central bank gold reserves.

Gold in China’s SAFE

Let’s take a look at China. China’s State Administration of Foreign Exchange (SAFE) announced on Jan. 7 that China had added 30 metric tonnes to its official gold reserves in December 2022. This announcement came on top of a prior announcement that China added 32 metric tonnes in November. That’s a 62 metric tonne increase in just the past few months.

This announcement is significant not only because of the size of those increases, but because this is the first time China has announced increases in its official gold reserves since September 2019 — over three years ago. Why now?

The first thing to grasp is that China did not simply buy that much gold in the market over the past two months and then report it in a timely way. China had the gold all along. They just held it off the books inside SAFE.

This announcement was simply a policy decision to make some accounting entries to allow the gold to appear on the books instead of off the books. There is no doubt that China has at least 1,000 metric tonnes of gold held off the books in this manner, perhaps much more.

So the question investors need to ask is not where did China get the gold (they had it all along), but why did China decide to go public with an increase in their holdings at this time? As with everything in China, the real reasons are hidden and the public announcements are mostly lies.

Still, we can use inferential methods to get at what the Chinese are up to.

The Dollar: Victim of Its Own Success

This gold announcement comes at a time when there is a growing dollar shortage in China and around the world. The Chinese may simply want to bolster confidence in their reserve position.

Then there’s the geopolitics of it. There’s a growing movement to move away from dollar reserves because the U.S. has abused financial sanctions to freeze assets including central bank reserves of Russia, Syria, Iran, North Korea, Venezuela and others.

They’re working to reduce dollar reserves and invent new forms of currency for international payments. That’s why countries like China, Brazil and India are moving away from dollars for fear that they will be next on the sanctions list.

In that context, Bloomberg recently reported about a recent meeting of Southeast Asian officials and experts hosted by a think tank in Singapore. The report revealed that participants were just as fearful as the major countries that the U.S. has gone too far in weaponizing the dollar to apply pressure in geopolitical disputes.

George Yeo, the former foreign minister of Singapore, went so far as to say that “the U.S. dollar is a hex on all of us.” He went on to say, “If you weaponize the international financial system, alternatives will grow to replace it.”

The former trade minister of Indonesia, Thomas Lembong, praised Southeast Asia central banks that have developed digital payments systems using local currencies. He also urged government officials to find new ways to avoid relying extensively on the U.S. dollar.

“I have believed for a very long time that reserve currency diversification is absolutely critical,” said Lembong.

Even U.S. “Friends” Have Had Enough

What’s amazing about this report is that the criticism of U.S. dollar policies is coming from reliable allies and countries that have traditionally favored dollars. There was a huge buildup of U.S. dollar reserves throughout Southeast Asia in the aftermath of the global currency crisis of 1997–98.

This policy of building precautionary reserves was designed to prevent another run on local banks and to provide a rainy day fund for essential imports such as food and oil.

Now the asset seems more like a potential liability as the U.S. uses the dollar to threaten countries that don’t support Biden administration warmongering in Ukraine or other U.S. policies such as the Green New Scam.

If friendly countries in places like Southeast Asia join serious rivals such as Russia and China in reducing their reliance on the U.S. dollar, it can only mean a weaker dollar and possibly more inflation ahead.

It will also mean much higher gold prices because gold is the only alternative to dollars or other currencies such as the euro that can be weaponized against them.

That’s because stocking up on gold is a defensive move that helps insulate them against sanctions. Physical gold in secure custody cannot be frozen or seized or digitally banned. It’s just gold — and it’s money good in the hands of the holder.

Russia and China Place Floor Under Gold Price

Returning briefly to China, China’s announcement comes just weeks after Russia announced it had doubled the ceiling on permitted gold holdings of its sovereign wealth fund, from 20% to 40%. This will create demand for perhaps 100 metric tonnes over the coming year.

If China continues to add 30 metric tonnes or so to its reserves at the same time that Russia is out to buy 100 metric tonnes it will put a de facto floor under the gold price, while supporting the 20% rally in gold prices we’ve seen over the past few months.

Russia and China could be acting in concert to send a message to the world that dollars are yesterday’s news, and gold is the new foundational reserve asset (as it was for centuries prior to 1971). We could be witnessing a critical turning point in the international monetary system.

In short, Russia, China and the other nations I’ve mentioned are “weaponizing” gold as another weapon in the ongoing financial war that surrounds the war in Ukraine. Since Russia and China are among the top five gold producers in the world, they can buy gold from their own mines using local currency.

This tactic minimizes their need for dollars since they are paying with money they print themselves. At the same time, it increases the hard currency value of their own gold because they are depriving world markets of substantial output.

Great for Gold Investors

For gold investors, that’s excellent news. Here’s why…

While demand for gold is accelerating, total global production of gold has been flat for the past six years. That combination of flat output and increasing demand will put upward pressure on gold prices and act as a de facto floor under gold. Central banks tend to be opportunistic buyers and will definitely buy if any dips emerge.

That’s a recipe for consistently higher prices. It’s not too late for astute investors to acquire gold if you are not fully allocated already.

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>>> If Russia accepts gold for oil, gold price doubles to $3,600, says Credit Suisse's Zoltan Pozsar


Kitco News

by Anna Golubova
December 07, 2022


https://www.kitco.com/news/2022-12-07/If-Russia-accepts-gold-for-oil-gold-price-doubles-to-3-600-says-Credit-Suisse-s-Zoltan-Pozsar.html


(Kitco News) In a year of "unthinkable macro scenarios," Credit Suisse's Zoltan Pozsar said it is not improbable for gold to double to $3,600 an ounce if Russia responds to G7's oil price cap by accepting gold for crude.

In a note to clients, Pozsar said that a year-end money-market liquidity crunch is unlikely unless Russia decides to accept gold for oil in light of sanctions.

While this outcome might sound out of this world, it is not that far-fetched given some of the geopolitical and macroeconomic surprises from this year, Pozsar said in a note titled 'Oil, Gold, and LCLo(SP)R.' "Crazy? Yes. Improbable? No. This was a year of the unthinkable macro scenarios and the return of the statecraft as the dominant force driving monetary & fiscal decisions," Pozsar wrote Monday.

In this scenario, Russia's President Vladimir Putin responds to the recently introduced $60-a-barrel oil price cap by asking for a gram of gold for two barrels of crude.

At current market prices, the cap of $60 per barrel for Russian oil equals the price of a gram of gold, Pozsar said. What essentially happens here is the U.S. pegs Russian export at this price, and Russia, in return, pegs it at a gram of gold. And this would come at a time when the U.S. is working to refill its strategic reserves with cheap petroleum.

In this example, "the U.S. dollar effectively gets 'revalued' versus Russian oil," Pozsar pointed out. "But if the West is looking for a bargain, Russia can give one the West can't refuse: 'a gram for more.' If Russia countered the price peg of $60 with offering two barrels of oil at the peg for a gram of gold, gold prices double," Pozsar described.

This is how gold can get to $3,600 an ounce from current levels of $1,794 an ounce.

"Russia won't produce more oil, but would ensure that there is enough demand that production doesn't get shut. And it would also ensure that more oil goes to Europe than to the U.S. through India. And most important, gold going from $1,800 to close to $3,600 would increase the value of Russia's gold reserves and its gold output at home and in a range of countries in Africa," Pozsar described.

But gold doubling would be an issue for banks involved with futures markets as most have assumed that governments won't get back to paying for goods with commodities.

"Banks active in the paper gold market would face a liquidity shortfall, as all banks active in commodities tend to be long OTC derivative receivables hedged with futures (an asymmetric liquidity position)," Pozsar wrote. "That's a risk we don't think enough about and a risk that could complicate the coming year-end turn, as a sharp move in gold prices could force an unexpected mobilization of reserves (from the o/n RRP facility to banks) and expansions in balance sheets (SLR) and risk-weighted assets. That's the last thing we need around year-end."

On Monday, the price cap on Russian seaborne oil came into effect. It is being enforced by the G7, the European Union, and Australia. Russia, which is the world's second-largest oil exporter, responded that it would not accept the price cap, even if it has to cut production.

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[BottomBounce]

$NAK Northern Dynasty Minerals Top Institutional Holders
https://finance.yahoo.com/quote/NAK/holders?p=NAK

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Gold + silver looking good, and breaking out :o)

The dollar broke near term support and looks like it might re-enter the broad trading zone it had from 2015-2021 (88-104). Right now it's at 105 and falling, so just above the upper boundary (104) of that trading band. Since the markets tend to 'look ahead' 6,9,12 months into the future, it could be anticipating the winding down of the Fed tightening and then eventual pivot (and a recession). In any event, looks like the lower dollar is helping the metals :o)



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>>> Ghana plans to buy oil with gold instead of U.S. dollars


Reuters

November 24, 2022


https://finance.yahoo.com/news/ghana-plans-buy-oil-gold-150718243.html


ACCRA (Reuters) -Ghana's government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia said on Facebook on Thursday.

The move is meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

Ghana's Gross International Reserves stood at around $6.6 billion at the end of September 2022, equating to less than three months of imports cover. That is down from around $9.7 billion at the end of last year, according to the government.

If implemented as planned for the first quarter of 2023, the new policy "will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency," Bawumia said.

Using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products, he explained.

"The barter of gold for oil represents a major structural change," he added.

The proposed policy is uncommon. While countries sometimes trade oil for other goods or commodities, such deals typically involve an oil-producing nation receiving non-oil goods rather than the opposite.

Ghana produces crude oil but it has relied on imports for refined oil products since its only refinery shut down after an explosion in 2017.

Bawumia's announcement was posted as Finance Minister Ken Ofori-Atta announced measures to cut spending and boost revenues in a bid to tackle a spiraling debt crisis.

In a 2023 budget presentation to parliament on Thursday, Ofori-Atta warned the West African nation was at high risk of debt distress and that the cedi's depreciation was seriously affecting Ghana's ability to manage its public debt.

The government is negotiating a relief package with the International Monetary Fund as the cocoa, gold and oil-producing nation faces its worst economic crisis in a generation.

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>>> Franco-Nevada Corporation (FNV) operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally. It operates in two segments, Mining and Energy. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and energy comprising oil, gas, and natural gas liquids. The company was founded in 1983 and is headquartered in Toronto, Canada.

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>>> Why Royalty Companies Often Outperform Gold Miners


Private Placements.com

November 3, 2021


https://www.privateplacements.com/investing-news/why-royalty-companies-often-outperform-gold-miners/


With spot gold hovering for months around US$1780 an ounce, it seems we're in the middle of a stall in the biggest gold market in history. But still, with quantitative easing continuing apace, a looming global energy crisis, and economic uncertainty running amok, the outlook remains strong for gold.

Gold Mining

Which makes the current market a good one for considering new mining companies to add to your portfolio. In the middle of a lull in a bull market that experts like Rick Rule say we may be less than halfway through, attractive stocks are going at tremendous discounts.

And as you survey the precious metals field for new investments, we'd urge you to consider gold royalty companies.

Though royalty companies often don't get the attention that mining companies garner with flashy projects and fresh drill results, they actually tend to outperform the mining market.

Over the past seven years, five of the biggest royalty companies (Franco-Nevada, Wheaton Precious Metals, Royal Gold, Sandstorm Gold, and Maverix Metals) chalked up returns of 135%. Spot gold, meanwhile, only rose 49%, while the VanEck Gold Miners ETF—one of the best gauges of the junior mining market—rose just 60%.

Though it's true that the companies listed above are a mere slice of the larger royalty market, there are several good reasons why royalty companies are often a better choice than other mining options.

But before we get into that, it's worth diving into how royalty companies work, and how they make money.

How royalty companies work

To put it simply, royalty companies provide mining companies with capital in return for a chunk of the miner's eventual production or revenue.

Mining companies require a lot of money at every stage, whether they're just spinning up the first drills on a promising project or actually building a mine. This capital can be hard to secure—especially when the gold market is unfavourable.

So, royalty companies help finance a project, and take a cut of whatever the project produces in the future.

The most common arrangement, called net smelter agreements (NSRs), usually result in the mining company paying between 1 and 3 percent of its value of production or operating profit for the entire life of the mine.

Nearly as common are streaming agreements, whereby the royalty/streaming company gets between 5 and 20 percent of one or more of the metals produced by the mining company.

This provides the mining company with funds when they're most needed, while providing the royalty company—and its investors—with long-term value.

3 reasons the royalty model often outpaces traditional mining companies

1. Better profit margins

Mining is at every stage an incredibly complex, incredibly expensive process. Every move in the mining space comes with a massive pile of overhead costs and risks, from tonnes of high-priced equipment and teams that include dozens of individuals with unique roles and responsibilities.

But the best royalty companies are lean, streamlined operations. Without the need for drill rigs and huge teams, royalty companies can create value with only a laptop. And, since their costs remain relatively static, they're not exposed to the bulk of the massive risks that come with the mining space.

Which brings us to our next point.

2. Far less risk

The advantages considered above shield royalty companies from the runaway costs that make operating and investing in a mining company so risky.

Royalty companies usually draw from the revenue of a mine rather than from the mining company's ultimate profit. This allows the royalty company to continue pulling in value even when the price of gold stalls.

3. Diversified asset base

Junior mining companies are usually focused on a single project or two, often in a single jurisdiction or region. But the best royalty companies draw revenue from dozens of projects, all over the world.

This dodges jurisdictional risks and political problems, and generally allows the company (and the investor) to avoid putting all their eggs in one basket.

Rapid growth opportunities

Under the right conditions, royalty companies can grow as fast as any overnight junior mining success.

Wheaton Precious Metals (NYSE/TSX: WPM) is a perfect example. The company was founded in 2004. By the end of 2010, it had a market cap of $13 billion. Today, its market cap sits over $22 billion.

Overall, royalty companies offer leveraged exposure to what many see as an upcoming gold market, with many of the dreaded risks of the sector absent.

That's not to say that royalty companies aren't still fairly high-risk propositions, but they're far less risky than their junior mining counterparts.

And while we're certainly an advocate for mining companies at every stage of development, we see investors overlooking royalty companies all the time.

We'll have more info on one royalty company we see as a top player soon. In the meantime, we'd urge you to do some research on the sector and make your own discoveries.

We don't think the bull market for gold is over. Make sure you're prepared.

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>>> JPMorgan Gold Desk Ripped Off Market for Years, Jurors Told


Bloomberg

by Tom Schoenberg and Alex Nguyen

July 8, 2022


https://finance.yahoo.com/news/jpmorgan-traders-ripped-off-gold-200116600.html


(Bloomberg) -- The precious-metals business at JPMorgan Chase & Co. operated for years as a corrupt group of traders and sales staff who manipulated gold and silver markets for the benefit of the bank and its prized clients, a federal prosecutor told jurors in Chicago.

“This case is about a criminal conspiracy inside one of Wall Street’s largest banks,” said Lucy Jennings, a prosecutor with the Justice Department’s fraud section. “To make more money for themselves, they decided to cheat.”

The trial of three former JPMorgan employees, including the veteran head of precious metals, Michael Nowak, is the most ambitious effort yet in a years long US crackdown on market manipulation and spoofing. Unlike past cases of alleged trading fraud, the trio is accused of a racketeering conspiracy under the 1970 Racketeer Influenced and Corrupt Organizations Act -- a criminal law more commonly used against the Mafia rather than global banks.

Nowak, gold trader Gregg Smith and Jeffrey Ruffo, an executive director who specialized in hedge fund sales, are charged with racketeering conspiracy as well as conspiring to commit price manipulation, wire fraud, commodities fraud and spoofing from 2008 to 2016. All together, Nowak and Smith have been accused of more than two dozen crimes. The three defendants face decades in prison if convicted on all counts. Another trader, Christopher Jordan, who was charged alongside them, is scheduled to go to trial in November.

Spoofing, banned by law in 2010, involves huge orders that traders cancel before they can be executed in a bid to push prices in the direction they want to make their genuine trades profitable. While canceling orders isn’t illegal, it is unlawful as part of a strategy intended to dupe others.

“When this trick works, there is somebody else on the other side of the deal that lost,” Jennings told jurors in her opening statement. “Somebody got ripped off.” She added, “We will prove that all three defendants knew from day one that this trading was wrong and did it anyways.”

Read More: JPMorgan’s ‘Big Hitters’ of Gold Market Face Trial Over Spoofing

Lawyers for Nowak and Smith offered jurors a much different view, saying prosecutors had misrepresented how and why orders are made in the precious-metals market, and insisted that the defendants had never intended to deceive anyone. They said the government had cherry-picked trading data to create the false impression that the traders were spoofing when they were actually placing real, executable, open-market orders.

“The government’s simple narrative doesn’t tell the full story -- far from it,” David Meister, Nowak’s attorney, said in his opening statement.

Jonathan Cogan, Smith’s attorney, said gold and other precious metals were traded in a marketplace where computer-generated algorithms can buy and sell commodities in one-millionth of a second. To compete with the so-called “algos,” and to execute trades on behalf of JPMorgan clients, Smith routinely had buy and sell orders at the same time, Cogan said. While some orders were only active for seconds, that’s “an eternity” in such a fast-moving market, he said.

According to Meister, evidence presented at the trial will show that the vast majority of all market orders are canceled, and the typical lifespan of an order is just a couple of seconds.

The defense teams also said there is no evidence, including in JPMorgan chat logs or recorded phone calls, showing what traders Nowak and Smith were thinking, which means prosecutors can’t prove they intended cancel orders before executing them. “In order to win this case, the prosecution must prove beyond a reasonable doubt what was going on in Mr. Smith’s mind all those years ago,” Cogan said.

Ruffo’s lawyer, Guy Petrillo, said his client was a JPMorgan salesman who worked directly with customers who wanted to buy or sell precious metals, and that his job was to bring in client orders. Ruffo never placed any of those orders, wasn’t involved in trading execution, and that his compensation wasn’t linked to the profitability of the bank’s trading activities, Petrillo said.

Key Witnesses

Jennings said electronic communications and other evidence will show how the three collaborated to make sure their trading impacted markets in their favor. She said the government will call upon former traders who worked under Nowak or with the defendants. That includes John Edmonds, a former JPMorgan trader who previously pleaded guilty on charges linked to price manipulation.

Another likely witness for the government is Corey Flaum, who worked with Smith and Ruffo at Bear Stearns before it was acquired by JPMorgan during the financial crisis. Flaum pleaded guilty in 2019 to attempted price manipulation.

Following opening statements, the Justice Department said its first witness is likely to be John Scheerer, who will testify on the Chicago Mercantile Exchange’s operations and futures markets mechanisms.

Prosecutors allege Smith and Ruffo brought their illicit trading tactics from Bear Stearns to JPMorgan and their trading strategy was quickly adopted by Nowak and others. The Bear Stearns traders’ twist was to place multiple orders, at different prices, that in aggregate were substantially larger than the genuine order -- a technique the government calls layering. The orders, made in rapid succession after the genuine order, would be canceled as soon as the genuine order was filled.

Thousands of Trades

Smith, a lead gold trader, executed some 38,000 layering sequences over the years, or about 20 a day, prosecutors said in filings. Nowak himself primarily traded options, but he would dip into the futures market to hedge those positions. He tried his hand at layering in September 2009, according to filings, and went on to use the technique some 3,600 times.

While some of the transactions started before lawmakers banned spoofing, the tactic allegedly continued to be widespread with the JPMorgan traders engaging in spoofing more than 50,000 times in almost a decade, prosecutors said.

Ruffo, meanwhile, is alleged to have told Smith where he needed the market in order to fulfill orders involving at least two of his hedge fund clients -- Moore Capital Management and Tudor Investment Corp., according to court filings. Lawyers for Ruffo and the others said they may call traders from those hedge funds as well as one from Soros Fund Management to testify about transactions. Their witness list also includes six current and former JPMorgan sales staff on the precious metals desk -- two of whom supervised Ruffo.

Spoofing Crackdown

The government crackdown by the Justice Department and the US Commodity Futures Trading Commission has nabbed more than two dozen individuals and firms, from day traders operating out of their bedrooms to sophisticated high-frequency trading shops and big banks including Bank of America Corp. and Deutsche Bank AG.

Not every case was successful. In 2018, a jury acquitted former a UBS Group AG trader of conspiring to engage in commodities fraud, and in 2019, a case against a Chicago programmer who created spoofing software ended in mistrial and charges were dropped. In the JPMorgan case, bank fraud charges against the three defendants were thrown out by the judge.

Still, the government has had many more wins. Two former precious-metals traders at BofA’s Merrill Lynch were found guilty of spoofing by a jury in Chicago last year, and in 2020, two Deutsche Bank AG traders were convicted.

In September 2019, JPMorgan admitted wrongdoing and agreed to pay more than $920 million to resolve US claims of market manipulation in both precious metals and Treasuries. It was the largest ever sanction against a bank over spoofing by a wide margin. JPMorgan also agreed to help the Justice Department prosecute its former employees.

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>>> Switzerland Imports Russian Gold for First Time Since War

More than 3 tons of gold was shipped to refining hub in May

Russian gold became taboo following invasion of Ukraine


Bloomberg

By Eddie Spence

June 21, 2022


https://www.bloomberg.com/news/articles/2022-06-21/switzerland-imports-russian-gold-for-first-time-since-invasion


Switzerland imported gold from Russia for the first time since the invasion of Ukraine, showing the industry’s stance toward the nation’s precious metals may be softening.

More than 3 tons of gold was shipped to Switzerland from Russia in May, according to data from the Swiss Federal Customs Administration. That’s the first shipment between the countries since February.

The shipments represent about 2% of gold imports into the key refining hub last month. It may also mark a change in perception of Russian bullion, which became taboo following the invasion. Most refiners swore off accepting new gold from Russia after the London Bullion Market Association removed the country’s own fabricators from its accredited list.

While that was viewed as a de facto ban on fresh Russian gold from the London market, one of the world’s biggest, the rules don’t prohibit Russian metal from being processed by other refiners. Switzerland is home to four major gold refineries, which together handle two-thirds of the world’s gold.

Back in Business

Switzerland imported Russian gold for the first time since February

Almost all of the gold was registered by customs as being for refining or other processing, indicating one of the country’s refineries took it. The four largest -- MKS PAMP SA, Metalor Technologies SA, Argor-Heraeus SA and Valcambi SA -- said they did not take the metal.

In March, at least two major gold refineries refused to remelt Russian bars even though market rules permit them to do so. Others, such Argor-Heraeus, said they would accept products refined in Russia prior to 2022, so long as there were documents proving that doing so would not financially benefit a Russian person or entity.

Read: Russian Palladium’s Taboo Status Dislocates the Top Trading Hubs

Some buyers remain wary of Russian precious metals, including bars minted prior to the war which are still tradeable in western markets. In palladium, it’s created a persistent dislocation between spot prices in London and futures in New York, due to the greater risk of receiving ingots from Russia in the latter.

Switzerland has been importing small quantities of palladium from Russia -- the world’s biggest miner of the metal -- since April.

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>>> Colorado's Newmont acquiring control of South America's largest gold mine

Global demand for copper is projected to rise more than 50% this decade.


4-14-22

By Greg Avery

Denver Business Journal


https://www.bizjournals.com/denver/news/2022/04/14/colorado-newmont-mining-gold-copper-peru.html?ana=yahoo


Gold miner Newmont Corp. has bought out two other partners, in a pair of deals worth more than $400 million, to become the sole owner of South America’s largest gold mine.

The Greenwood Village-based company (NYSE: NEM), the largest gold producer in the world, reached a deal to buy a 5% ownership stake in the Yanacocha mine in Peru for $48 million. Newmont is acquiring the stake from Japan’s Sumitomo Corp.

The transaction is expected to close by summer. It sets Newmont up for a planned expansion of the massive mine in the Peruvian highlands and to begin extracting significant amounts of copper from the mine as well as gold.

“This transaction gives Newmont full equity ownership of the Yanacocha district where we are positioning the sulfides project for profitable production and value generation for decades to come,” said Tom Palmer, Newmont president and CEO, in a statement.

The companies disclosed the deal Wednesday, two months after Newmont struck a deal with Compañia de Minas Buenaventura S.A.A. (NYSE: BVN) to buy its nearly 44% stake in Yanacocha for a base price of $300 million that could rise to $400 million after contingency payments that are connected to the price of gold and other metals.

Newmont also agreed to give Buenaventura its ownership in a joint venture operating the La Zanja open pit mine in Peru and put down $45 million toward the 12-year-old mine’s future closure costs as part of the deal.

Newmont operates 12 mine complexes in eight countries and employs 35,000 people.

The Yanacocha mine has generated nearly 40 million ounces of gold since 1993. Newmont forecasts that Yanacocha will produce 225,000 ounces of gold and other valuable metals in 2022.

The miner’s acquisitions give it control of the whole Yanacocha mine district, which the company sought as it prepares to fully fund a project to expand the operation and extend its life past 2040. The expansion has been years in the making.

“Newmont has successfully operated in Peru for more than 30 years and has deep knowledge of the asset and the value it brings to Newmont stakeholders,” Palmer said. “We are committed to continuing to be a catalyst for sustainable development in Peru by working closely with communities in the Cajamarca region and the Peruvian government.”

The company says it expects the final decisions this year that will allow it to start the expansion.

The company has said it expects the copper output of Yanacocha Sulfides facility to be worth the equivalent of 500,000 ounces of gold annually between 2026 and 2030.

Copper production has caught Newmont’s eye because it is present at several of its gold mining sites around the world and global demand for copper is projected to rise more than 50% this decade. Copper is key to expanding power lines and in increased production of things like solar and wind power systems, and electric vehicles.

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Franco Nevada - >>> The 3 Best “Royalty” Gold Stocks To Buy Now


Forbes

MoneyShowContributor

Oct 25, 2021


https://www.forbes.com/sites/moneyshow/2021/10/25/the-3-best-royalty-gold-stocks-to-buy-now/?sh=6375e87c2e55


The big question on gold investors’ minds, for good reason, is why gold is not higher given the unprecedented money printing and rising inflation. The second question is, when will it change? asks Adrian Day, a money manager focused on resources sector specialist, a contributor to MoneyShow.com and the editor of Global Analyst. Here he outlines his bullish long-term case for gold, the benefits of royalty streaming companies and his favorite specific investments within the sector.

To some extent, gold has simply been in a long consolidation after the extraordinary move early last year, when gold jumped over 30% from its end-March low to early August high.

The current gold bull market started at the end of 2015, when gold hit $1,051. Gold cycles, both up and down, tend to be long; indeed, the shortest have been the last two, in the 1970s and from 2001 to 2011. And it is not unusual for gold to have mid-cycle corrections, often caused by an extraneous shock.

In the 1970s, gold dropped over 40% in a correction lasting 20 months. In 2008’s credit crisis, it fell nearly 30% in eight months. So far, this pullback has taken 15% off gold’s peak price — a piker by historical standards — and has lasted just 13 months, well within norms for mid-cycle corrections. I would suggest that gold bottomed last March at $1,685, meaning the correction lasted less than seven months.

One major factor holding back gold is the Federal Reserve’s constant threat to start tapering. The Fed has a history of talking more than doing, and, for reasons beyond me, the institution still has credibility.

The fact is that many times in the past gold moved down in advance of Federal Reserve tightening, responding to growing talk, but turned when it actually started to tighten. This is “buy the rumor, sell the news”, only in reverse. Gold acts this way because all-too-often when the Fed does start to act, it is too little too late.

The Fed started raising rates in August 2005, and again in December 2015, after months of discussion. In both cases, gold bottomed the same month rates started being hiked. Similarly in May 2013, when the Fed started talking about tapering, gold slid for the next several months. It was just before Christmas that we saw the first rate hike, and gold bottomed almost to the day.

The recent action has been frustratingly modest and volatile. However, the longer gold meanders in its current trading range, the faster and stronger the eventual move will be. In the meantime, gold investors can accumulate at prices that will appear very good in a few years’ time. They should not wait too long.

The major mining stocks are now extraordinarily inexpensive, with the senior and intermediate gold companies trading in the lowest 25 percentile of their historical valuations, and more-or-less the lowest price-to-free cash flow ever. Given the price of gold, given the strong cash flows, given the improved balance sheets and given the improved discipline among top mining companies, today’s low valuations are a gift.

The major mining companies may be very undervalued, but there is no getting away from the fact that mining is a difficult business and the stocks tend to be very volatile. For the non-specialist, one of the safest ways to invest in the gold space is with the royalty and streaming companies.

These companies, instead of actually mining themselves, invest in other companies and projects in return for a percentage of the revenue. They may invest in producing mines perhaps to fund an expansion, or in development projects or even in exploration.

A royalty typically makes its entire investment upfront and receive a percentage off the top, while a streamer makes ongoing payments in addition to the upfront payments. The benefit of the model is that the royalty or streamer is not responsible for things that change, with the mine or the country.

If mining costs or taxes go up, the mining company has to deal with it but the royalty still gets it cut off the top. Thus, the royalty or streaming company has more assured revenue than the mining company and tends to be a more conservative way of investing in the sector.

Looking at individual royalty streaming stocks, I recently returned from two back-to-back gold conferences in Colorado, where the main attraction was the opportunity for private meetings with company CEOs. Franco-Nevada (FNV) continues to demonstrate why it is a core holding. Nothing in my meeting with Paul Brink, president and CEO for little over a year, changed that opinion. He has, if I may say, really grown into the job following David Harquail, Pierre Lassonde and much earlier Seymour Schulick: big shoes to fill indeed!

Franco has made $800 million in acquisitions so far this year, the largest in iron ore dentures from Vale. This acquisition, plus revenue from energy jumping 78%, means that the contribution from precious metals has dropped under 80%.

Brink pointed out that the Vale debentures had a “catch-up quarter” so on a steady-rate basis, the company’s precious metals revenues remain at 80%. The ongoing expansion at Cobre Panama would also help boost gold revenues. He did say though that the aim would be for the company’s next major acquisition to be in gold.

In our discussion, we focused mainly on the overall royalty/streaming environment as well as Franco’s changing shareholder base. Brink noted that cash was cheap right now, so there was very little distress around. It was the broken balance sheets among major copper producers following the peak in 2012 that enabled Franco to acquire gold by- product streams on some of the world’s largest and long-life copper mines.

Nothing like that exists today and Franco (and other streaming companies) can’t compete, he said, with the current price of debt. The main opportunity now is in assisting single-asset development companies obtaining financing to construct projects.

In that space, royalty and streaming companies are competitive, since the main alternate financing is private equity which can be expensive. Bank debt tends to be heavy on covenants. But, he added, “anything we do now is going to be small.”

I had known that Franco has been becoming more attractive to generalist investors, those wanting some exposure to gold but cautious of big miners with their (mostly) disastrous long-term records.

Franco pitches itself as “the gold investment that works”. But I was surprised to learn that 70-80% of its shareholders now are generalists. This certainly explains why Franco’s stock often moves more with the broad market than with other gold stocks.

Franco has the deepest portfolio of any royalty company, with 403 assets now, of which 60 are producing and 30 are in development. Interestingly, he notes that Franco has about 250 royalties that it does not include in its resource calculations at all. That deep portfolio has hidden gems, assets that had long been “forgotten” and come to the fore with new management or nearby discoveries.

The huge portfolio, and diversification, as well as solid balance sheet, top management, and organic growth all add up to why Franco is a core holding. We have not bought it for a few months now, but it you do not own, the recent price decline (from over $160 at the end of July to the lowest price since April) presents an opportunity.

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Osisko Gold (OR) reported a slight miss on its latest quarter, but maintained full-year guidance, with the Eagle Mine ramping up. Headline financial results were less satisfactory, a loss of C$50 million due to a non-cash impairment at an Osisko Development (OD) project.

OR still consolidates results from OD, which distorts reported cash, revenue and costs of the royalty company. Osisko Gold wants to get its ownership of Osisko Development below 50% of shares outstanding so that it no longer needs to consolidate its financials. It expects progress on this goal next year but is in no hurry to sell its shares at depressed levels.

The Osisko Development spin-off brings advantages to Osisko Gold. As a development company, OD clearly has more costs than a royalty company. As we have discussed before, however, OD will be a tremendous benefit to Osisko Gold, since it provides them with a bult-in pipeline of royalties on development assets for which they do not need to contribute.

In the highly competitive world that royalty acquisition and creation is today, this is an advantage that cannot be overstated. OD expects a construction permit on its Cariboo project in British Columbia in the second half of next year following a large-scale drill program. Other projects are advancing, including San Antonio, in Mexico, which should see cash flow next year.

Osisko Gold also reported that it had repurchased almost 1.3 million shares so far this year, and 920.266 of those in August. The company is authorized to buy up to 14 million shares through it’s normal course issuer bid.

Osisko is in a catalyst-rich period, with multiple projects expected to start producing before the end of next year, including the ramp-up at Eagle (to become its second largest earner); start-ups at Santana and San Antonio; and the start up of production from First Majestic’s Ermitaño on which another of our recommended companies, Orogen, also holds a royalty. So, there is significant growth in the 16 months ahead.

Osisko, meaningfully smaller than the Big Three royalties, has virtually all revenue from gold and silver (97% this year); 96% of its Net Asset Value is from these precious metals. For the major royalty and streaming companies, the NAV that is not gold and silver ranges from 8% for Wheaton to 32% for Franco. It also has the best political risk profile of the larger royalty companies.

At the Denver Gold Forum, I had the opportunity to meet new President and CEO Sandeep Singh for the first time; though I had spoken with him on the phone several times, we had not met due to travel restrictions. My confidence in OR has been only enhanced by meeting him and hearing his vision. With strong management, a solid balance sheet, and deep pipelines including several near-term development assets, and a low valuation, Osisko is buy.

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Wheaton Precious Metals (WPM) recently held an annual “investor day” which took a broad look at the company. Wheaton focuses on streams on high-quality, low-cost, long-life assets. It released a new 10-year guidance of 830,000 ounces average Gold Equivalent Ounces (GEOs), up from its five-year average of 810,000 GEOs.

According to the company, only some 2% of all mine finance since 2004 comes from streams; of that, Wheaton, which invented the streaming model, holds 40%. It currently has 24 assets, with strong partners, 65% of whom are investment grade, including Newmont (NEM), Barrick (GOLD), Vale (VALE) and Glencore (GLNCY).

Some 90% of its streams are on mines in the lower 50 percentile of the cost curve, 74% in the lowest 25 percentile. CEO Randy Smallwood argues that streams have more leverage that royalties because they carry a per-ounce cost.

Its streams have provided over $2 billion more cash flow than expected when the deals were done, and the gap is beginning to widen again. Its policy is to distribute 30% of cash flow in dividends, making for a dividend that increases with the gold price—from 5 cents per quarter in 2015 to 15 cents in the last quarter.

Of course, this policy can make for a volatile dividend; it was 14 cents in early 2013 before falling for the next two years.

Wheaton has taken a different tack to its balance sheet than other larger royalty and streaming companies, saying that with interest rates so low, it makes sense to use debt to acquire cash-flowing assets. It is, however, debt free today after paying off debt from its strong cash flow.

Wheaton has a $2 billion undrawn debt facility and has not issued equity since 2016. It has recovered $8 billion of the total $9 billion it has invested since inception, with remaining assets valued today at $19 billion.

It is diversified between gold and silver, 50% and 41% by revenue this year. Vale’s Salobo is its largest single asset, accounting for 36% of NAV, a little less of revenue. A fire at the mine, with full operations expected to be resumed before month end, may reduce output for the quarter (accounting for about 2% of Wheaton’s overall revenue).

Salobo’s phase III expansion is currently underway, expected to be completed by the second half of next year; Wheaton’s final payment of $670 million on the expansion is not due until 2023. In addition to the Salobo expansion, two large near-term projects underway are Pampacancha ramp-up (a satellite of the Constancia mine), and the underground at Voisey’s Bay, which just commenced initial mining.

By country, Brazil accounts for 32% of revenue, Mexico and Peru another 21% each. Right now, its sees opportunities in helping finance mine expansions and M&A, deals which are typically smaller than the large balance sheet repairs for base metal companies of 2013-2016.

Wheaton stock has bounced, along with other gold stocks, 11% since the end-September lows, but it’s still down 15% from its June highs, and trading at a discount to Franco-Nevada. We want to own Wheaton long term, and if you do not own it, you can buy now. Otherwise, we will look for a pullback under $40 again to add positions.

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>>> 3 Favorite Gold Stocks for 2022 and Beyond

These gold stocks are well positioned to cash in on higher prices.


Motley Fool

by Matthew DiLallo, Neha Chamaria, And Reuben Gregg Brewer

Jan 22, 2022


https://www.fool.com/investing/2022/01/22/3-favorite-gold-stocks-for-2022-and-beyond/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Key Points

Franco-Nevada's diversified business model makes it stand out.

Wheaton Precious Metals' streaming focus has it cashing in these days.

Agnico Eagle Mines' upcoming merger is a major catalyst.


Many investors use gold as a hedge against inflation. Because of that, it has become a hot commodity in recent years as fears of inflation have increased due to all the economic stimulus pumped into the global economy to keep it running during the pandemic.

With inflation running at its hottest level in nearly 40 years last year, we asked three Fool contributors for their favorite ways to invest in gold. Here's why they think Franco-Nevada (NYSE:FNV), Wheaton Precious Metals (NYSE:WPM), and Agnico Eagle Mines (NYSE:AEM) are the best gold stocks.

Gold and a little bit more

Reuben Gregg Brewer (Franco-Nevada): I'm not a huge fan of precious metals miners because the basic business model tends to be fairly volatile, driven largely by commodity price swings. However, streaming and royalty companies like Franco-Nevada take a different approach to the space that helps to smooth out the ride while still providing exposure to gold and silver. Streamers pay miners up front for the right to buy precious metals at reduced rates in the future. Miners use the cash to build new mines, expand existing ones, make acquisitions, or simply to spruce up their balance sheets. Franco-Nevada gets to lock in low prices and, thus, tends to have generous margins in both up markets and down ones.

Royal Gold and Wheaton Precious Metals basically do the same thing, so Franco-Nevada is not unique on this front. What sets it apart is that Franco-Nevada also has a bit of exposure to energy markets (15% of revenue) via deals similar to those it inks for metals. While that means it isn't a pure-play precious metals stock, I think the diversification adds a material benefit given the commodity nature of the business. The proof of the success here is in the company's dividend, which has been increased annually for 14 consecutive years despite the inherent volatility of the precious metals sector.

Franco-Nevada isn't exactly cheap today, with a historically low dividend yield of 0.9%. However, if you are conservative like me and still looking for a gold stock, this diversified play on the space is one you should strongly consider.

A high-margin gold stock

Matt DiLallo (Wheaton Precious Metals): Wheaton is a precious metal streaming company. It pays mining companies an up-front fee to help them finance development and expansion projects. It receives the right to purchase a portion of that mine's production at a fixed price in exchange.

The company's various streaming contracts enable it to purchase gold at an average price of $451 an ounce through 2025. With gold recently trading at more than $1,840 an ounce, Wheaton Precious Metals is making a lot of money.

For example, in the third quarter, the company had an average cash cost of $410 per gold equivalent ounce. Given where precious metals prices were in the quarter, its cash operating margin was $1,354 per gold equivalent ounce. That enabled it to produce more than $200 million of operating cash flow during the quarter on $269 million of revenue and a record $923 million of cash flow during the first nine months.

Wheaton uses its cash flow to pay a dividend -- it pays out 30% of its average operating cash flow over the last four quarters -- and invest in new streams. Thanks to higher precious metals prices, Wheaton has been able to pay a growing dividend, increasing it by 25% over the past year. It has also signed several new streaming deals, which should supply it with a growing cash flow stream in the future.

Wheaton's streaming model has enabled it to consistently outperform the price of gold and gold mining stocks over the years. That winning track record should continue, which is why it remains my favorite way to invest in gold.

Don't miss this upcoming mega-gold merger

Neha Chamaria (Agnico Eagle Mines): One of the few gold mining stocks I have on my radar right now is Agnico Eagle Mines as the company sets itself up for growth, backed by a mega-merger. Agnico Eagle Mines is about to acquire Kirkland Lake Gold in what it calls a merger of equals, with the former set to own 54% stake in the combined company.

Here's why this merger is a big deal for Agnico Eagle Mines: Kirkland Lake Gold is not only one of the most cost-efficient gold mining companies, but is also a debt-free and free-cash-flow-positive gold miner. That's one of the most impressive company profiles you could find in the precious metals industry. Moreover, Kirkland Lake is also on solid footing when it comes to production. On Jan. 17, the miner beat its own estimates and reported record production for its fourth quarter. Kirkland lake also ended the year with $940 million in cash and no debt.

Agnico Eagle Mines, therefore, is on track to become Canada's largest and one of the lowest-cost gold producers after the merger that's expected to close in the first quarter of 2022. In fact, Kirkland Lake's strong financial profile could also mean larger dividends for shareholders in Agnico Eagle. So far, Agnico Eagle has paid a dividend every year since 1983 and has grown dividends at a solid compound annual rate of 20% since 2010. All in, Agnico Eagle looks like one of the most compelling gold stocks for 2022 and beyond.

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>>> 7 Gold Stocks to Consider as Jitters Hit Wall Street


Investor Place

by Josh Enomoto

February 2, 2022


https://finance.yahoo.com/news/7-gold-stocks-consider-jitters-181318226.html


During extended phases of doubt or outright fear, many investors have historically turned to the established security of precious metals. Commanding universal intrinsic value, this special category within the broad commodities sector provides some reassurances of wealth protection. However, carrying around physical metals can be a drag, literally and metaphorically. Therefore, interest could spike regarding gold stocks to buy.

While investors pivoting toward a defensive posture this year may want to consider a modicum of funds directed toward physical metals — after all, if you don’t hold it, you don’t truly own it — gold stocks offer multiple advantages over just the underlying asset. For one thing, it’s quite difficult to steal equity shares, with multiple protections in place. Second, mining firms tend to offer greater returns than just the asset itself.

To be fair, though, gold stocks usually make sense during periods of inflation. Of course, such circumstances invite investors to protect their purchasing power. On paper, a deflationary circumstance would be negative for precious metals as the U.S. dollar would rise in relative strength. Nevertheless, gold may still offer longer-term positive returns based on multiple uncertainties lying over the horizon.

Moreover, the Federal Reserve has signaled a pivot in monetary policy, moving from a dovish, accommodating strategy to one that’s much more hawkish. In turn, this move will likely raise borrowing costs, disincentivizing risk-on assets including gold stocks. However, you should know that no guarantee exists that the hawkishness will be indefinite, particularly because money velocity is near all-time recorded lows.

Defined as the rate at which each unit of currency circulates throughout the economy, an ultra-low money velocity suggests consumers have little confidence in the recovery initiative. Therefore, we could be back toward a dovish policy again, which would bode well for these gold stocks.


Newmont (NYSE:NEM)

Barrick Gold (NYSE:GOLD)

Royal Gold (NASDAQ:RGLD)

Wheaton Precious Metals (NYSE:WPM)

Franco-Nevada (NYSE:FNV)

Sibanye Stillwater (NYSE:SBSW)

Aurelia Metals (OTCMKTS:AUMTF)


During a market panic, virtually all sectors are at severe risk of plummeting, including gold stocks. Therefore, due diligence and strict money management are a must in this arena. At the same time, simmering geopolitical conflicts remind us that problems aren’t just exclusive to home. Thus, at least necessitating a closer look at alternative investments.


Gold Stocks: Newmont (NEM)

When you first start building your portfolio of gold stocks, you want to start with some of the established firms. While this sector presents significant opportunities, particularly during periods of uncertainty and turmoil, it can also get incredibly volatile. That’s the case with junior miners, which are largely aspirational at best.

However, Newmont is about as far as you can get from an exclusively exploration-focused company. Instead, according to its website, Newmont “has the largest gold reserve base in the industry” underpinned by its “world-class ore bodies in top tier jurisdictions.” At the time of writing, NEM stock commanded a market capitalization of $47.7 billion.

Back in early 2020, Newmont achieved a significant milestone, reporting gold reserves of over 100 million ounces — the largest mineral reserves in the industry. Just as well, the company provides a best-of-both-worlds investment, with NEM stock playing into the fear trade while also offering an attractive 3.53% dividend yield.

For comparison, the materials industry’s average yield is 2.82%, giving NEM stock a significant lead over other gold stocks. Furthermore, such a strong yield is obviously much better than the 0% you get holding physical precious metals.


Barrick Gold (GOLD)

Another one of the top gold stocks to buy, Barrick Gold features a market cap of $34.6 billion. While frequently ranking below Newmont in the valuation race, Barrick has ambitious goals, striving to be the world’s most valuable gold miner. To accomplish this objective, Barrick is focusing on what it terms tier one mining assets.

The company defines tier one as the ability to produce half a million ounces of gold annually while facilitating at least 10 years of productive life and enjoying low-cost operations on a total costs-per-ounce basis. If Barrick accomplishes this objective, it will be able to generate not only revenue but revenue predictability. That alone could be worth a pretty premium in this typically volatile segment.

Management anticipates that it will produce an average of 5 million ounces annually through 2030. To be fair, the financials for Barrick has been slowing down recently, a circumstance that’s no different from other gold stocks. For instance, in the third quarter of 2021, its revenue haul of $2.8 billion was about 25% off from the year-ago level of $3.5 billion.

Still, on a multi-year basis, GOLD stock’s chart appears to be setting up for a bullish swing higher. Therefore, it’s certainly one to keep on the radar.


Gold Stocks: Royal Gold (RGLD)

Fundamentally, one of the biggest risks with gold stocks is the threat of the unknown. Basically, if a miner doesn’t produce the target commodity, it’s going to be run out of town. Of course, this risk is most prevalent in junior mining firms, which are focused on the exploration side of the business. If no discovery is made, then the company will likely go bankrupt.

Still, it’s an inherent risk for all gold stocks, which is why investors should consider diversifying into names like Royal Gold. Structured as a royalty firm, Royal Gold focuses on “building and managing a diversified, cash-flowing portfolio of precious metal assets, while also accumulating a pipeline of earlier stage assets that are not yet cash-flowing, but have the potential to do so in the future.”

Gold stocks tied to royalty models benefit from revenue predictability. By definition, a royalty is a “non-operating interest in a mining project that provides the right to a percentage of revenue or metal produced from the project after deducting specified costs, if any.”

Combine that with Royal Gold’s yield of 1.3%, and you have a well-rounded investment that can help mitigate shocks historically associated with gold stocks.


Wheaton Precious Metals (WPM)

Similar to Royal Gold above, Wheaton Precious Metals also features a non-operating interest in the metals mining industry. Therefore, Wheaton manages to deliver predictability for shareholders, many of whom may not have the experience deciphering which mining firm is viable and which should be left on the sidelines.

As a result, Wheaton is able to deliver higher margins for its stakeholders. Thanks to a combo of strong cash flows and commodity price leverage, WPM stock has consistently outperformed its underlying gold and silver assets — along with precious metal exchange-traded funds and several other gold stocks. While the narrative comes from its marketing pitch, the reality is that WPM stock has generated surprisingly strong returns, even without directly operating a mining project.

However, the manner in which Wheaton conducts business is different from Royal Gold in that the former is a streaming firm. Rather than a right to a percentage of revenue or metals produced, streaming firms sign a contractual right to purchase all or a portion of metals produced from a mine.

Furthermore, Wheaton features a 1.45% yield. True, it’s not the most generous yield you can get. However, with the potential for upside gains from the fear trade, it’s an attractive add-on benefit.


Gold Stocks: Franco-Nevada (FNV)

Featuring both royalty and streaming business models, Franco-Nevada in some ways could be the investment to consider if you can’t choose between the above two gold stocks. Based in Canada, Franco-Nevada features a diversified portfolio, with agreements connected to gold, silver and the platinum group metals of platinum and palladium.

If that wasn’t enough, Franco-Nevada is also mixed in with iron ore and oil and gas contracts. Certainly, if you want to cast a wide net with your gold stocks, this is the one to put on your radar.

As mentioned previously, the advantages of royalty and streaming allow for better predictability and thus lower risk. With key business items contractually documented, Franco-Nevada buffers itself from cost overflows that have been the bane for gold stocks. However, my particular interest in FNV stock is its ties to palladium.

First, while palladium may not be as critical for electric vehicles (EVs), they play a vital role in emissions management. As you probably heard, criminals are stealing vehicles’ catalytic converters not for the piping work but for the integrated palladium.

Second, tensions with Russia will likely support rising prices since the country is the biggest producer of the metal. It’s cynical, yes, but FNV stock could enjoy significant upside.


Sibanye Stillwater (SBSW)

Billed as the “world’s largest primary producer of platinum, second largest primary producer of palladium and third largest producer of gold,” Sibanye Stillwater may play a substantial role in world affairs in the years ahead. Just as I mentioned above, palladium is a crucial metal, not just for emissions control but multiple other technology-centric applications.

While it could be the metal of the future, Russia commands the greatest influence over its supply. Therefore, Sibanye Stillwater, which is headquartered in South Africa, provides a much more palatable diplomatic access point.

To be fair, some might dismiss the future utility of palladium due to EVs not needing emissions controls. However, EVs still only make up a small percentage of vehicles on the road. As well, the global economic disruption that occurred because of the coronavirus pandemic makes EV ownership out of reach for average-income households.

Finally, people have been forced to buy cars at a premium during the new normal. They’re going to need to hold onto their rides for a longer-than-usual period for the purchase to make financial sense. This may translate to greater repair work, including the repair or replacement of palladium-integrated catalytic converters.


Gold Stocks: Aurelia Metals (AUMTF)

Because gold stocks tend to be riskier than other asset classes, I’ve focused on the safer wagers in this segment. Still, “safer” is a relative term in this business.

Therefore, if you must conduct intense due diligence with long-established gold stocks, believe me, you’ll want to go through the details of Aurelia Metals with an electron microscope. However, given that this is the age of investment memes, I suppose it would be rude of me not to mention the speculative side of this industry.

Just let me clarify this one more time: if you acquire AUMTF stock, you did so because you made the choice. I didn’t say jack squat.

Now, per its website, Aurelia is an “Australian mining and exploration company with a highly strategic landholding and three operating gold mines in New South Wales.” That said, whether this exploratory endeavor pans out is anybody’s guess.

However, Sprott Junior Gold Miners ETF (exchange-traded fund) has Aurelia at the top of its holdings with a 5.53% weighting. One of the most powerful names in the precious metals sector, Sprott Asset Management acts as the investment advisor to the ETF, if that kind of stuff provides you confidence. It’s no guarantee of upside but it does offer some food for thought.

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>>> Why Shares of Franco-Nevada Rose 10% in 2021

The price of gold may have slipped last year, but this gold stock climbed higher.


Motley Fool

Scott Levine

Jan 12, 2022


https://www.fool.com/investing/2022/01/12/why-shares-of-franco-nevada-rose-10-in-2021/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Key Points

Wall Street repeatedly recognized upside to the stock.

The company raised its quarterly dividend more significantly than it had in 2020.

Franco-Nevada consistently beat analysts' earnings expectations.


What happened

Looking at the performance of a gold-focused stock like Franco-Nevada (NYSE:FNV) in 2021, you'd expect to see that the stock had fallen. After all, there's a strong correlation between the movements in the price of gold and those of stocks that are tied to the yellow stuff. But that's not the case with Franco-Nevada, which ended 2021 10.3% higher than when it began, according to data from S&P Global Market Intelligence.

What motivated investors to add some luster to their portfolios with the royalty and streaming company? For one, Wall Street waxed bullish on the stock's prospects throughout the year, while the company's consistently strong earnings reports and dividend raises represented additional catalysts.

So what

While Franco-Nevada didn't sparkle in analysts' eyes in February -- Stifel and CIBC both reduced their price targets -- Wall Street turned bullish on the stock as the year progressed. Through the first half of 2021, Franco-Nevada found itself subject to several upgrades, and bulls continued to favor it in the latter part of the year as well. In October, for example, Canaccord Genuity upgraded the stock to buy from hold, and two months later, H.C. Wainwright initiated coverage with a buy rating and $167 price target, representing upside of about 25% at the time of the analyst's action.

The allure of a higher dividend provided an additional motivating factor for investors in 2021. In May, Franco-Nevada announced a 15.4% increase to its quarterly dividend per share from $0.26 to $0.30 -- a notably higher raise than the 4% increase to its quarterly payout that it announced in May 2020.

Consistently exceeding analysts' expectations, Franco-Nevada reported quarterly earnings throughout 2021 that surpassed the Street's estimates. Besides the bottom-line beats that the company racked up in the first six months of the year, Franco-Nevada booked surprisingly strong results in the second half of the year. The company reported earnings per share of $0.96 for Q2 2021 and $0.87 for Q3 2021, beating estimates of $0.93 and $0.85, respectively.

Now what

Whether simply looking to diversify their holdings or seeking to fortify their portfolios against market volatility, investors turn to gold stocks like Franco-Nevada for a variety of reasons. Unlike gold producers, this royalty and streaming company acts more like a niche financier, providing upfront capital to mining companies that develop projects in exchange for a percentage of the mined mineral or the ability to buy the mined mineral for a preset price -- a business model that gold-hungry investors oftentimes prefer since it represents lower risk than investing in gold mining companies.

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>>> Jim Rogers: Next bear market will be ‘the worst in my lifetime’ — here are 3 assets he's using for 2022 crash protection


MoneyWise

Jing Pan

January 1, 2022


https://finance.yahoo.com/news/jim-rogers-next-bear-market-140000061.html


Jim Rogers: Next bear market will be ‘the worst in my lifetime’ — here are 3 assets he's using for 2022 crash protection

The Santa Claus rally has brought the market to new highs as we enter 2022, but it’s important to remember that stocks don’t always go up in straight lines.

Famed investor Jim Rogers has seen quite a few bear markets in the last half century, and he fears the biggest one yet could be right around the corner.

“The next bear market will be the worst in my lifetime,” he predicted in a Q3 interview with financial advisory firm Wealthion.

To be sure, Rogers has been bearish on the U.S. stock market for years. But the multimillionaire does know a thing or two about making money in turbulent times.

Rogers co-founded the Quantum Fund with George Soros in 1973 — right in the middle of a devastating bear market. From then till 1980, the portfolio returned 4,200% while the S&P 500 rose 47%.

Here are three assets he recommends keeping in your portfolio to ride out a possible 2022 downturn — even if you’re just sprinkling some of your extra cash on them.


Silver

Rogers has long been a fan of commodities, and silver is one of his favorites.

“The all-time high for silver is $50 an ounce; now it’s $23. Why can’t silver go back to its all-time high? That’s the way markets usually work,” he says.

Investors love silver because it can be a store of value and a hedge against rising interest rates and inflation.

At the same time, it’s widely used as an industrial metal. For instance, silver is a critical component in solar panels. So with increasing solar adoption, demand for the grey metal could get another boost.

Rising prices benefit miners, so some of the easiest ways to play a looming silver boom are through companies like Wheaton Precious Metals, Pan American Silver and Coeur Mining.


Copper

Unlike silver, which is trading at less than half its all-time high, copper hit new heights in 2021.

But Rogers continues to like copper for a very simple reason: electric vehicles.

“An electric car uses several times as much copper as a combustion engineering car, so there’s going to be huge demand for some of these metals that we didn’t have before,” he explains.

“Yes, it’s at all-time highs now, but electric cars are just getting started.”

As is the case with silver, investors can use copper miners to get exposure to the metal. Companies like Rio Tinto, Freeport-McMoRan and Southern Copper are well-positioned to capitalize on the copper boom.

To be sure, many copper miners have already enjoyed substantial rallies in their share prices.

If you’re on the fence about jumping into the metal at this point, remember you don’t have to start big. A popular trading app even allows you to buy fractions of shares with as much money as you are willing to spend.


Agriculture

Rogers loves agricultural commodities, like sugar or corn. But this time, he’s also stressing the importance of farmland itself.

“Unless we’re going to stop wearing clothes and eating food, agriculture is going to get better. If you really, really love it, go out there and get yourself a farm and you’ll get very, very, very rich,” he says.

Indeed, farmland could be a great hedge because it’s intrinsically valuable and has little correlation with the ups and downs of the stock market.

Over the years, agriculture has been shown to offer higher risk-adjusted returns than both stocks and real estate.

The best part? You don’t need to get your hands dirty to get a piece of the action.

New platforms allow you to invest in U.S. farmland by taking a stake in the farm of your choice. You’ll earn cash income from the leasing fees and crop sales. And of course, you’ll benefit from any long-term appreciation on top of that.

A fourth alternative

There's one more overlooked physical asset that has little correlation with the stock market — and it might offer even bigger upside potential: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich, like Rogers. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

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>>> Why Gold Isn't Protecting You From Runaway Inflation This Time


Investor's Business Daily

by MATT KRANTZ

11/11/2021


https://www.investors.com/etfs-and-funds/etfs/gold-etfs-isnt-protecting-you-from-runaway-inflation-this-time/?src=A00220


Red-hot inflation is supposed to light up gold prices. But gold ETFs are lagging, though, some think that's about to change.

The giant $56.1 billion-in-assets SPDR Gold Trust (GLD) is down 3.2% this year. That's surprising as all signs of inflation are heating up to epic levels. The consumer price index, a key measure of rising prices, finished off the charts in October. The core inflation rate, excluding food and energy, jumped to 4.6%, which is a 31-year high. And prices jumped 6.2% from a year ago, the largest gain since 1990.

But if you think hiding out in gold will save you, you've been wrong.

"Gold is poised to suffer its first calendar year loss since 2018 as it hovers around $1,800 an ounce," said Jack Ablin, strategist at Cresset Capital Management. "It appears the inflation hedge and store of value has been largely forgotten in a year when the theoretically "transitory" inflation flare-up now appears to be longer lasting."

Why Isn't Inflation Shining Gold ETFs?

Gold ETFs are down across the board. All the majors, including also $27.4 billion in assets iShares Gold Trust (IAU) and $3.9 billion-in-assets SPDR Gold MiniShares Trust (GLDM) are off just as much as SPDR Gold Trust.

Some are down even more. The Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) is down 10.9% just this year as it uses an option strategy to magnify moves. And that's working against it now.

Adding to the pain of owning gold is this: Just about every other asset is jumping higher. The SPDR S&P 500 ETF Trust (SPY) is up nearly 24% this year. Real estate, another hedge against inflation, is doing better, still. The Vanguard Real Estate ETF (VNQ) is up 29.4% this year. And what some think of as the "new gold," Bitcoin, is doing even better. The Grayscale Bitcoin Trust is up roughly 70% this year.

Why isn't gold rallying? After all, the price of the yellow metal is supposed to at least keep up with inflation. Ablin says the strong traditional linkage of gold prices to inflation-adjusted Treasury rates is "disconnected" this year. For now.

Don't Blame Bitcoin For Gold ETF's Woes

It's widely thought gold is simply losing its allure with a new class of investors who prefer cryptocurrencies for inflation hedges.

But that's a folly, Ablin says. "We don't expect them (cryptocurrencies) to displace gold as an inflation hedge," he said. Bitcoin's volatility is seven times higher than gold's, he says. And it suffered 50% crashes four times in just the past five years. "That doesn't sound like a safe haven store of value," he said.

Gold, though, is positioned to do better, Ablin says. More than $10.5 trillion is invested in gold worldwide. And roughly 20% of that is held in bars and coins. Just a small move into gold by institutions "could be the catalyst to drive prices higher," Ablin said.

It usually takes "many months" of inflation north of 5% for demand for gold to kick in, says George Milling-Stanley, chief gold strategist at State Street Global Advisors. "Right now, we have seen inflation at an elevated level for just a few months," he said.

More Inflation Coming?

Inflation might only be getting started, too. Inflation spiked to roughly 15% in the late 1970s, says Sam Stovall, market strategist at CFRA. And inflation ended the 1980s at 12.4% and the 1990s at 6.3%. Interestingly, the only decade since the 1950s the S&P 500 posted a negative compound annual growth rate, 2.7%, was in the 2000s when inflation only averaged 2.4%, Stovall says.

Where can ETF investors hide? Stovall found S&P 500 growth stocks to be the top performers in periods of rising inflation. They rose 0.93% a month on average during these periods. Next best? Information technology stocks with a 0.81% average monthly gain followed by 0.74% by energy stocks, Stovall says.

Some say, though, gold holds an important place in portfolios. "Gold has returned 405 basis points per annum more than inflation and 336 basis points per annum more than Treasury bills during the last half century, while the U.S. dollar has lost over 90% of its purchasing power in the past 50 years," said Ashraf Rizvi, CEO of Gilded. "These are compelling realities."

So don't entirely rule out gold, says Juan Carlos Artigas, global head of research at the World Gold Council.

"Looking ahead, we believe there is a considerable risk that higher inflation may persist as a by-product of knock-on effects from the monetary and fiscal policies enacted in response to the Covid-19 pandemic which is likely to support investment demand for gold," he said.

Gold ETFs Not Golden Now

Spiking inflation isn't helping gold prices, yet


ETF Symbol Assets ($ billions) ytd ch.

SPDR Gold Trust (GLD) $56.1 -3.2%

iShares Gold Trust (IAU) 27.4 -3.1

SPDR Gold MiniShares Trust (GLDM) 3.9 -3.1

Aberdeen Standard Physical Gold Shares (SGOL) 2.3 -3.0

GraniteShares Gold Trust (BAR) 1 -3.0

VanEck Merk Gold Trust (OUNZ) 0.4 -3.0

Goldman Sachs Physical Gold (AAAU) 0.3 -3.0

Invesco DB Gold Fund (DGL) 0.09 -4.1

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 0.08 -10.9

Pacer iPath Gold ETN (GBUG) 0.04 -3.4

Sources: IBD, S&P Global Market Intelligence, ETF.com through Nov. 10

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Rickards - >>> Gold Breakout Imminent!


BY JAMES RICKARDS

NOVEMBER 15, 2021


https://dailyreckoning.com/gold-breakout-imminent/


This is getting ridiculous. And that’s a good thing. By “this,” I mean the price of gold, and by “ridiculous,” I mean repetitive to the point of absurdity. That’s OK. The prospects for gold from here are highly positive.

By now, readers are tired of my description of gold trading as range-bound between $1,700 per ounce on the low side and $1,900 per ounce on the high side, with $1,800 per ounce as the central tendency. That’s completely accurate but also highly repetitive, since it has held true with only brief and minor exceptions for the past year.

This pattern emerged in November 2020 after gold fell from its all-time high of $2,069 per ounce on Aug. 6, 2020. The predictable question from investors is: “Fine, we get it. But, when does the pattern break either to the upside or downside? What’s next for gold?”

That’s where the good news begins. Yes, gold has been range-bound, but the range is getting smaller. While swings of 5% in a matter of days were common as recently as last summer, that volatility has cooled off. Gold still moves up and down in price, but the swings are much more compact.

The central tendency is still $1,800 per ounce, but the swings are more tightly bunched between $1,750 and $1,850 (again, with a few exceptions). That’s a 5.5% band to replace the prior 11.0% band.

We’re also seeing a pattern of lower highs and higher lows as compression continues. That’s a technical pattern called a pennant because it looks like a sports pennant if you draw converging lines through the highs and lows.

A pennant is a setup for a breakout. The breakout can occur in either direction, but it’s more common for the breakout to continue the trend that existed before the consolidation.

Whether we take the $1,685 price on March 30, 2021, the $1,725 price on Aug. 9, 2021, or the $1,722 price on Sept. 29, 2021, it’s clear that this pennant formed in the wake of an uptrend. This suggests that the breakout will be to the upside and it will occur soon.

There’s a run of fundamental data that supports this technical view. The first piece of evidence is that the real price of physical bullion today is not $1,864 per ounce (according to the COMEX gold futures contract price), but closer to $2,000 per ounce according to my gold bullion dealer sources.

The difference between the two prices is about 8%.

The problem with this pricing method is that a normal dealer commission is around 2.5%. Any commission higher than that is not really a commission. It’s a reflection of scarcity, delivery delays and other logistical issues in getting actual physical bullion instead of paper gold contracts.

In other words, $1,925 per ounce is the real price of real physical bullion. Everything else is just paper.

The second fundamental factor is that Russia is back in the game. As readers know, Russia has increased its gold reserves by 1,700 metric tonnes since 2009. Gold reserves were 600 metric tonnes in 2009 and are 2,298.5 metric tonnes today, a 283% increase in the past twelve years.

The Central Bank of Russia has pursued this acquisition plan in a steady and incremental way under President Putin and Central Bank Chief Elvira Nabiullina. Acquisitions of gold were regular in amounts of about 5 to 30 metric tonnes per month like clockwork to avoid disrupting the market.

In April of last year, the clock stopped. Russia reduced its holdings slightly in April, July, August, September and October 2020 and January and April 2021. Holdings were unchanged in November and December 2020 and February, March, May and June of 2021.

Now, Russia is back on the buy side. It purchased 3.1 metric tonnes in July 2021 and another 3.1 metric tonnes in September 2021 (August was unchanged). Analysts should not mistake this renewed purchasing as a buying binge by Russia. It’s something more subtle.

Russia is running the world’s most sophisticated hedging operation inside its global reserve account of hard currencies and gold. The object is to maintain gold at about 20% of total reserves. This goal was achieved in early 2020, which accounts for the fact that purchases tailed off after that.

Russia’s reserves are now bulging because of the steeply higher price of oil. This increases Russia’s dollar reserves since oil is priced in dollars. If dollar reserves are increasing and Russia wants to maintain gold at 20% of total reserves, it has to buy more gold to maintain the allocation. This is no different than what everyday investors do when they rebalance target portfolios to account for large gains or losses in a particular asset class.

It’s also consistent with Russia’s hedging objectives. If the dollar retains its value, gold may not move much in price. Still, the allocation of gold in the portfolio acts as insurance. If the dollar crashes in value, the dollar price of gold will soar and Russia’s losses on its dollar portfolio will be offset by gains on its gold portfolio.

In its current form, the dollar is losing value, at least in relation to oil. The dollar price of gold has not moved much. So, that’s an opportune time to buy gold to maintain the hedge without paying a premium. The Russians are masters of this kind of dynamic hedging (unlike Americans). They just proved it again through the combination of expensive oil (generating revenue) and steady gold prices (offering an attractive entry point at which to maintain the hedge).

But Russia’s not alone. Other major central banks that have added materially to their gold reserves in recent months are Thailand (90.20 metric tonnes), Brazil (53.75 metric tonnes), Turkey (8.67 metric tonnes), India (8.4 metric tonnes) and Qatar (3.12 metric tonnes). Some central banks were net sellers, but the total sales of the top five were less than 25 metric tonnes, far smaller than the total additions.

And of course, China has acquired massive amounts of gold in recent years, which has been part of a concerted overall strategy. And recently, Chinese gold imports from Hong Kong hit a five-month high, up nearly 60% in September.

These central bank purchases were in anticipation of a declining dollar and higher dollar inflation. The central banks are buying gold to stay ahead of the curve. Shouldn’t you do the same?

Regards,

Jim Rickards

for The Daily Reckoning

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>>> Silver Is Looking Like a Bargain After Prices Dropped. What to Know.


Barron's

By Myra P. Saefong

Sept. 30, 2021


https://www.barrons.com/articles/silver-is-looking-like-a-bargain-after-prices-dropped-what-to-know-51632996001?siteid=yhoof2


After silver’s climb earlier this year to the highest prices since 2013, the metal has significantly underperformed sister metal gold. With silver’s value dropping to its lowest in 14 months, some investors may see an opening to buy.

“Silver presents a better opportunity than gold at the present time,” says Jeff Wright, chief investment officer at Wolfpack Capital. However, he warns investors not to rush into the market just yet, especially as a rise in 10-year Treasury yields has fueled a retreat for precious metals that could see prices for both silver and gold move even lower.

Silver has had a very bumpy ride since the pandemic began. Futures prices gained more than 47% in 2020, then settled at $29.418 on Feb. 1 of this year, with a Reddit-induced rally boosting the value of the metal to the highest since February 2013. Prices then saw a volatile retreat, settling at $21.485 an ounce on Sept. 29 to mark silver’s lowest value since July 2020.

“While silver typically finds over half its end-demand from tech and industrial uses, investment flows are what drive prices higher or lower,” says Adrian Ash, director of research at BullionVault. That means silver is facing a “stiff headwind from the global shift toward tighter central-bank policy,” just like gold.

At the same time, silver is also “suffering a sore head after the craziness of 2020 and early 2021,” he says. “Silver squeezed a half-decade of price action into just five months when the Covid crash hit.”

Prices dropped 40% to the cheapest level since 2009 at about $12 per ounce in March of 2020. Then silver raced to seven-year highs—just shy of $30 by February 2021 as that “screaming bargain unleashed record investment demand,” Ash says.

But the rally “vanished as fast as it arrived, leaving the market unmoved within five weeks as much of the speculative buying was quickly unwound,” Ash says.

The losses for silver have outpaced those of gold for the quarter as of Sept. 29, with silver down 18% compared with gold’s decline of less than 3%. The poor performance of silver is “relatively surprising” as fundamental factors support the metal in the long term, says Carlo Alberto De Casa, analyst at Kinesis Money.

He pointed to a January Silver Institute report, produced by Metals Focus, that said silver automotive demand is forecast to climb to an estimated 88 million ounces by the end of 2025, from 51 million ounces in 2020. “Investors should put silver in their watch list,” says De Casa. “Silver is getting close to being a bargain.”

Total global silver demand is forecast to climb by 15% this year to 1.03 billion ounces, according to the Silver Institute.

Silver is “currently lacking a strong and popular narrative to attract dollars from generalist investors new to the market,” says BullionVault’s Ash. “But silver’s got plenty of great stories to tell, just like the idea of China’s massive solar-panel installation project a decade ago” spurred record-high silver prices at nearly $50 an ounce, he says.

Wolfpack Capital’s Wright believes there is a “building scarcity” for silver, and a potential “opportunity for folks interested in metals over the long term.”

Taking everything into consideration, investors who wish to invest in silver could take a position in the silver-backed iShares Silver Trust exchange-traded fund (ticker: SLV), or in silver producers such as Wheaton Precious Metals (WPM), says Wright, who disclosed a position in Wheaton shares. This year, the iShares Silver ETF is down 19%, while shares of Wheaton Precious Metals have lost nearly 8%.

Both are good vehicles for exposure to silver, but “be cautious in regards to timing,” says Wright.

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>>> 2 Gold Stocks You Can Buy and Hold for the Next Decade

The stock market is near all-time highs. If you are looking for a way to hedge your stock bets, here are two unique gold plays to consider.


Motley Fool

by Reuben Gregg Brewer

Sep 15, 2021



Key Points

If a market trading near all-time highs has you worried, then gold could help ease your fears.

But you shouldn't just buy any old gold investment. There's one way to put money to work in precious metals that's got an edge.

Here are two of the best names in this unique gold niche.


Gold is generally considered a safe haven asset that investors run to in times of fear. Given that the stock market is near all-time highs despite a worldwide pandemic and increasing global debt levels, the safe haven nature of gold might sound pretty alluring right now. If it does, you'll want to look at this pair of unique gold stocks.

Go with the stream

You can add gold to your portfolio by purchasing bullion. The problem is you have to store it safely, and the only potential upside comes from higher gold prices. You can get out from under the storage issue by acquiring an exchange traded fund that owns gold, but you still only benefit if gold prices go up.

Miners are another alternative, since they benefit from selling the gold they mine at higher prices when gold rallies and they can expand their businesses over time, providing an avenue for growth. The problem here is that there are fixed costs in mining, and when gold falls profitability can quickly vanish.

That's why most investors will probably be better off with a streaming and royalty company like Royal Gold (NASDAQ:RGLD) or Franco-Nevada (NYSE:FNV). Streamers basically pay miners an upfront fee for the right to buy gold at reduced rates in the future. Miners use the cash, which they get access to without having to tap the capital markets, to fund investments or debt reduction efforts. The streamers get to lock in wide margins. To put a number on that, a recent streaming deal for Royal Gold requires it to pay just 20% of the gold spot price up to certain production targets, and then a still-low 40% thereafter. Note that the wide profit margin here is locked in because its costs go up and down with the price of gold. That's a big win, and helps provide material consistency to the business.

This is exactly why investors should favor streaming and royalty names. Simply put, they provide exposure to precious metals, have robust profit margins (in good markets and bad) because of the low locked-in prices, and they can grow their businesses by investing in new streaming deals. It's a good balance of risk and reward -- especially since they also have portfolios that span across different regions and mining partners. Diversification is good for your portfolio, and it's good for a streamer's portfolio too.

Pure-ish play

Precious metals are generally found together, often with other non-precious metals as well. So there's really no such thing as a pure-play streaming company or miner. However, Royal Gold got roughly 74% of its revenue from gold in fiscal 2021, with the rest coming from a mix of copper, silver, and "other" metals. That makes it the most exposed to the so-called barbarous metal when compared to its closest peers.

What's also quite interesting is that Royal Gold has increased its dividend annually for 20 consecutive years. Gold is a highly volatile commodity prone to swift ups and downs. Royal Gold's ability to pay a consistently growing dividend is a testament to the strength of its business model. And there's no reason to think things will change, given that it ended fiscal 2021 with little debt and a collection of investments that are either just starting to produce or moving toward first production, and gold prices remain elevated. To be fair, Royal Gold's dividend yield is a miserly 1.1% today, which is at best middle-of-the-road when you look at its historical yield range. However, for investors looking to add some diversification to their portfolios with a gold play, this is a name you can buy and comfortably hold for a very long time.

A diversified diversifier

That said, if diversification is the real goal you are after as you look for a gold-linked investment, then you might want to consider Franco-Nevada. It generates around 56% of revenue from gold, with silver and platinum-group metals (two other important precious metals) chipping in 19%. "Other" metals add 11%, and energy 14%. It also has one of the largest investment portfolios in the streaming/royalty space. Diversification is basically at the core of everything this company does, making it a good way to get exposure to gold and to hedge your gold bet at the exact same time.

What's notable is that you aren't giving up much to get these diversification benefits. For example, the yield is 0.85% -- not a big difference on an absolute basis compared to Royal Gold, and Franco-Nevada has increased the payment annually for 14 years, which happens to be each year since its IPO. It stands toe-to-toe with Royal Gold in many ways, the big difference being a lower reliance on gold to fuel the top and bottom lines. But 56% is not a small number, so for more conservative types, this streaming and royalty name might actually be a better option than more focused Royal Gold.

A reality check

Royal Gold and Franco-Nevada are two very good ways to add some gold exposure to your portfolio. And because of their advantaged streaming/royalty business models, they can really be bought and held for a very long time.

That said, adding gold to your portfolio should be looked at as a diversification tool and not as a way to time the ups and downs of the broader stock market or the precious metals sector. A small, long-term commitment to one of these two names is, for most, the best course of action. Anything more than that and you start to border on market timing, which is usually a dangerous game to play.

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>>> Ray Dalio: I have more gold than crypto


MarketWatch

Sept. 15, 2021

By Frances Yue


https://www.marketwatch.com/story/ray-dalio-i-have-more-gold-than-crypto-11631734752?siteid=yhoof2


‘You don’t want to commit cash. You don’t want a bond… You want stocks, you want gold, you want tangible assets, you want real estate,’ Dalio said.

Though holding some bitcoin and admitting the cryptocurrency’s attraction as “alternative gold,” Ray Dalio disputed Cathie Wood’s view that bitcoin BTCUSD, 0.55% will rise tenfold in five years.

“That doesn’t make any sense to me,” the billionaire and founder of hedge fund Bridgewater Associates on Wednesday said at the SALT conference held in New York. The tenfold rise could be “very much a stretch,” Dalio said.

“There’s a certain amount of reflation turn-around for those kinds of things going up to make a price increase, and there’s a certain market share that gold might have, that bitcoin might have and other things might have,” Dalio said.

In a different panel of the SALT conference, Ark Invest’s ARKK, +0.83% Wood said on Monday that she expected bitcoin’s price to top $500,000.

Dalio also said he had more gold than crypto. “I would say diversification is a good thing. We could get into the merits of one versus the other,” he said.

Meanwhile, Dalio reiterated his view that the U.S. has “bad finances,” spending more than it is earning. “You can fill that in by printing money and continue to create debt. But that’s not sound finances.”

It means “you don’t want to commit cash. You don’t want a bond, it’s going to have a negative real return.” Dalio said. “You want stocks, you want gold, you want tangible assets, you want real estate, you want the things that are basically anti-money…you want to get into those things that have more of those intrinsic values accompanying it.”

When asked about his personal plans, Dalio said he expects to “go quiet” and “do the things I like to do” after a year or two.

“My goal is not anymore to be more successful myself but just to try to pass along. And then I’ll do that for a year or two. And then I’m done,” Dalio said.

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>>> Solar-driven silver demand set to dim as sector innovates


S&P Global

9-30-20

by Kip Keen


https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/solar-driven-silver-demand-set-to-dim-as-sector-innovates-60533352


Silver demand from the solar sector looks set to wane as manufacturers continue to find ways to use less of the highly conductive but relatively expensive metal in their solar cells, according to experts.

"Out to 2024, we see volume drifting lower," said Philip Newman, a founding partner of research group Metals Focus, which produced a silver supply/demand report for the Silver Institute in April.

Likewise, consultancy CRU Group said it expects silver demand from the solar sector to start falling in 2020 after years of relatively uninterrupted growth.

"We forecast a slow decline in silver demand from 2020 to 2023 as [photovoltaic, or PV] capacity added per year dips, while attempts at silver thrifting in PV panels continues at a diminished rate," CRU Group analyst Alex Laugharne wrote in a June report.

Booming solar panel installations on rooftops and at utility-scale power projects over the past couple of decades have been a bright spot for silver. The precious metal is highly conductive and amenable to cost-effective screen-printing processes, making it a key component of solar cells.

Silver is typically laid down on the solar cell in what are called fingers, helping to deliver harvested energy. Amid growing installations of solar power, silver has benefited massively. In the early 2000s, silver demand from the solar sector barely registered, making up less than a percent of silver demand. In 2019, the photovoltaic sector accounted for 10% of total silver demand, comprising 98.7 million ounces within total demand of 991.8 million ounces, according to Metals Focus data.

The use of silver in photovoltaics is not likely to stop, but analysts expect industry innovation to continue to lower silver content per cell, outstripping demand from new solar installations. CRU Group estimated that each solar cell used an average 111 milligrams of silver per cell in 2019, decreasing from 521 milligrams per cell in 2009.

Innovation in screen-printing processes, in which silver-containing pastes are applied to solar cells in strips, is one of the key areas where manufacturers have squeezed out silver. And the trend has yet to reach a limit, according to industry experts.

Florian Clement, group head of solar cell printing technology at Fraunhofer Institute for Solar Energy Systems ISE, a major German research group, expects the industry to be able to halve its use of silver per cell over the coming decade. "A reduction down to 50 [milligrams] per cell is still expected to be possible within the next 10 years," Clement said.

That reduction and changes to the pace of global solar installations are key drivers in the anticipated drop in silver demand from photovoltaics, analysts with CRU Group and Metals Focus said. However, if a dimmer outlook for silver is on the horizon, demand from the solar industry is expected to stabilize in the coming decade as thrifting wanes.

"Looking to the longer term, CRU expects silver demand to fluctuate between 70 to 80 Moz per year between 2024 and 2030, as the rate of silver thrifting slows further, and PV capacity additions slightly increase," CRU Group wrote in its June report.

Newman similarly said that while the silver boom from the solar sector may have peaked for now, the industry will remain a key player. "It's still an incredibly high volume for one application," Newman said.

Meanwhile, Clement noted that silver will be extremely difficult to replace, at least in the types of solar cells that have come to dominate the market. Copper is cheaper and more abundant and might seem like an obvious choice to swap out for silver, but there are technical hurdles to using it cost-effectively in the cell-manufacturing process. Silver is easy to use in screen printing, Clement said, while copper typically requires more costly processes to apply, including different atmospheric conditions and curing methods, among other factors that drive up costs.

"If you look at mass production at the moment, silver is for sure the material you have to use," Clement said.

The trend now in cell manufacturing is to make them with more closely spaced, smaller fingers using less silver that in turn connect to more closely spaced wires on the cell, or busbars, Clement said. A busbar is a metallic strip or bar used to distribute local high-current electricity.

"At the moment, we have maybe nine or 12 wires for the best modules on the market," Clement said. "In the next three to five years, we may reach 15 to 20 wires, and the process is ongoing."

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Bio board is here -


https://investorshub.advfn.com/Biotech-Ideas-37829/

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>>> Franco-Nevada (FNV) Rides on Buyouts & Cost-Control Efforts


Zacks Equity Research

August 31, 2021


https://finance.yahoo.com/news/franco-nevada-fnv-rides-buyouts-134501088.html


On Aug 30, we issued an updated research report on Franco-Nevada Corp FNV. The company is well poised to grow on a healthy and diversified portfolio of streaming and royalty agreements, and a debt-free balance sheet. It continues to deliver higher margins, given its continued focus on cost management. However, uncertainty regarding the pandemic’s impact on the company’s mining operators and volatility in gold prices remain concerns.

The company recently reported adjusted earnings of 96 cents per share in second-quarter 2021, up 100% from the prior-year period. Additionally, the bottom line surpassed the Zacks Consensus Estimate of 94 cents. The company generated revenues of $347 million in the reported quarter, reflecting year-over-year growth of 78%. The top-line figure, however, missed the Zacks Consensus Estimate of $362 million.

Diversified Portfolio Bodes Well

Franco-Nevada operates as a gold-focused royalty and stream company with additional interests in silver, platinum group metals ("PGM"), oil & gas and other resource assets. One of the inherent strengths of its business model is the diversification of its portfolio. Cobre Panama, Guadalupe stream, Antapaccay and Antamina contributed to the company’s revenue performance during the reported quarter. The Cobre Panama contributed 19% to revenues in the second quarter followed by Candelaria, which contributed 10%. The company has royalties and streams on several properties mined by some of the most reputable mining companies in the world.

Cost-Cutting Actions to Bolster Margins

Given the company’s continued focus on cost cuts, Franco-Nevada’s cash costs per GEO (gold equivalent ounces) sold came in at $260 in the first-half of 2021, down 9% from the prior-year period. Its general & administrative costs have been relatively stable and have averaged $5-$8 million per quarter for the past 13 years. For 2020, G&A expenses were 2.8% of revenues, lower than the 3.4% of revenues in 2019.

Solid Balance Sheet & Acquisitions Driving Growth

Franco-Nevada is financially strong and has a debt-free balance sheet, which is commendable. The company generated $469.5 million in operating cash flow in the first half of 2021, up from the $345.4 million witnessed in the prior-year period. The company now has an available capital of $1.4 billion.

In April, Franco-Nevada acquired 57 million of Vale S. A’s VALE outstanding Participating Debentures for $538 million and accrued 9.9% equity investment in Labrador Iron Ore Royalty Corporation. These investments are accretive to the company’s cash flow and provide exposure to mines producing high-grade iron-ore products. Previously, the company had acquired new precious metals stream in the Condestable copper mine in Peru and a portfolio of natural gas royalties in the Haynesville play in Texas.

Upbeat Guidance to Aid Growth

Franco-Nevada now expects to achieve current-year GEO sales near the higher end of its guided range of 590,000 GEOs and 615,000 GEOs, up from the prior estimate of 580,000 GEOs to 615,000 GEOs. The upbeat guidance reflects strong performance of the company’s mining assets. Driven by the recovery in energy prices, Franco-Nevada now expects to generate revenues of $155-$170 million from Energy assets, up from the previous projection of $115-$135 million.

Uncertainty Regarding Pandemic Lingers

Franco-Nevada's mining operators faced the unfavorable impact of the coronavirus pandemic with the temporary suspension of operations and production curtailments last year. Resurgence of cases might lead to the same scenario this year, consequently hurting Franco-Nevada’s results.

Volatility in Gold Prices a Woe

Gold prices have lost 4% of its value, year to date. Gold prices had even dropped below $1,700 an ounce earlier this year on the successful vaccine roll-outs and massive stimulus packages. Even though gold prices have picked up and are currently trading above $1,800 per ounce on concerns over the new Delta COVID-19 variant, this volatility in prices is a concern for the company.

Price Performance

Franco-Nevada’s shares have gained 14.8% so far this year, as against the industry’s decline of 9.8%.

Zacks Rank & Stocks to Consider

Franco-Nevada currently carries a Zacks Rank #3 (Hold).

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>>> Palantir Buys Gold as Hedge Against ‘Black Swan Event’


by Lizette Chapman

August 18, 2021


https://finance.yahoo.com/news/palantir-buys-gold-bars-hedge-175654233.html


(Bloomberg) -- Palantir Technologies Inc. said it’s preparing for another “black swan event” by stockpiling gold bars.

The company spent $50.7 million this month on gold, part of an unusual investment strategy that also includes startups, blank-check companies and possibly Bitcoin.

Palantir had previously said it would accept Bitcoin as a form of payment. A spokeswoman for Palantir said no one has yet done so.

Embracing nontraditional currencies “reflects more of a worldview,” Shyam Sankar, the chief operating officer, said in an interview. “You have to be prepared for a future with more black swan events.”

The gold purchase was buried in a securities filing last week for its quarterly financial results and reported earlier this week by Barron’s.

Palantir’s 100-ounce gold bars will be kept in a secure location in the northeastern U.S., according to the filing. “The company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice,” Palantir wrote.

Palantir, co-founded by the technology billionaire Peter Thiel and Chief Executive Officer Alex Karp, makes software used by governments and businesses. It fashions itself as a company of free thinkers. Palantir relocated to Denver last year and mocked its peers in Silicon Valley on the way out. In the interview, Sankar compared Palantir’s culture with an “artist colony,” rather than a tech company churning out software on an assembly line.

Governments have strongly embraced Palantir software to help them make sense of the coronavirus pandemic, the current so-called black swan, a random and unpredictable event.

The company has some $2.3 billion in cash and is exploring creative uses for that money. Palantir said in May that it was considering investing in Bitcoin. And it’s taking stakes in startups that are customers of Palantir software, an approach that helped buoy sales results in the second quarter.

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CDC study shows unvaccinated people are 29 times more likely to be hospitalized with Covid

The new study also found that unvaccinated people were nearly five times more likely to be infected with Covid than vaccinated people.

https://www.cnbc.com/2021/08/24/cdc-study-shows-unvaccinated-people-are-29-times-more-likely-to-be-hospitalized-with-covid.html

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Delta cases show 300 times higher viral load - S.Korea study

https://news.trust.org/item/20210824091123-quxc4

But the amount gradually decreased over time - to 30 times in four days and over 10 times in nine days - and it matched levels seen in other variants after 10 days, the Korea Disease Control and Prevention Agency (KDCA) said on Tuesday.

The higher load means the virus spreads far more easily from person to person, increasing infections and hospitalizations, a health ministry official Lee Sang-won told a news conference.

"But it doesn't mean Delta is 300 times more infectious...we think its transmission rate is 1.6 times the Alpha variant, and about two times the original version of the virus," Lee said.

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The Technology 202: Study finds sites that mislead, not flat-out lie, attract record share of Facebook engagements

By Cristiano Lima
Tech newsletter reporter
Today at 9:14 a.m. EDT
https://www.washingtonpost.com/politics/2021/08/24/technology-202-study-finds-sites-that-mislead-not-flat-out-lie-attract-record-share-facebook-engagements/

As overall engagement on Facebook dropped this year, sites that share news misleadingly are attracting a record-level share of the platform’s audience, according to a study shared exclusively with The Technology 202.

More than 1 in 5 interactions — such as shares, likes or comments — with U.S. sites from April to June happened on “outlets that gather and present information irresponsibly,” according to a report by the German Marshall Fund.

This includes outlets such as the Daily Wire, TMZ, the Epoch Times and Breitbart that researchers say “distort or misrepresent information to make an argument or report on a subject,” a metric determined by NewsGuard, a website cited in the study that rates the credibility of news sources. Researchers say these sources, which they argue spread subtler but still harmful forms of misinformation, are decidedly different from sites that publish overtly false news.

“These are the kinds of sites that will cherry pick anecdotes and are giving rise to vaccine hesitancy and other kinds of conspiracy theories,” said Karen Kornbluh, director of the German Marshall Fund’s Digital Innovation and Democracy Initiative, a public policy think tank.

Researchers highlighted articles that they say “disproportionately amplify vaccine-hesitant voices over experts” and “fail to mention risks of not being vaccinated against covid-19,” such as a June story on football, titled, “NFL Wide Receiver Refuses Vaccine, Wants To ‘Represent’ Other Silent Players.”

While platforms have cracked down on black-and-white cases of fiction masquerading as fact, they are still grappling with how to handle murky yet wide-reaching cases that stop short of falsehood.

“What we really see is that the information environment has changed dramatically,” said Kornbluh, who served as U.S. ambassador to the Organization for Economic Cooperation and Development under the Obama administration.

The ratio of misleading content marks a five-year high for Facebook, where “false content producers” have received a higher share of engagement in the past, according to the findings. At the same time, engagement with U.S. sites that repeatedly share outright false information — going a step beyond merely misrepresenting information — has plummeted across Facebook and Twitter.

On Twitter, 9 percent of shares by verified accounts to U.S. sites went to misleading sites, while 3 percent went to sites that publish false content, marking a three-year low for both categories.

The findings shed light on a crucial tension for Silicon Valley: Polarizing and misleading content often generates the most engagement, which drives users to the platforms and fuels revenue.

Kornbluh said the two platforms deserve a pat on the back for cracking down on “false content producers.” But ultimately, she said, that’s “low-hanging fruit,” and the bigger challenge is figuring out how to deal with an information ecosystem increasingly filled with shades of gray.

“What’s left is really tricky, but it’s really important,” she said.

Facebook spokesman Andy Stone said that “over the past few months, the most widely viewed Pages on Facebook either weren’t sharing content about covid-19 at all or were sharing reliable information about the virus,” and that the platform has removed millions of pieces of content violating rules against coronavirus misinformation.

Twitter spokeswoman Elizabeth Busby said the report “underscores the importance” of Twitter's ongoing safety efforts. “We’re hyper-focused on disrupting attempts by people on Twitter, including high-profile figures with expansive reach, to amplify false and misleading information,” she said.

The report also found that while engagement dropped across U.S. sites in the second quarter, the rate at which it dipped was significantly lower for misleading sites than for some reliable sites that earned perfect trustworthiness ratings from NewsGuard.

The finding comes as Facebook in particular faces a fresh wave of scrutiny over the reach of misleading posts on its platform, particularly regarding vaccine misinformation.

Facebook released for the first time last week a quarterly report about its most-viewed posts in the United States that largely showed the widest-reaching content was fairly innocuous and apolitical.

But the announcement was significantly undercut by a New York Times report that company executives withheld an earlier, less flattering report over concerns it would make the company look bad. The prior iteration showed a republished article from the Chicago Tribute on a doctor’s death after he was vaccinated had been the most-viewed link in the United States, as my colleague Elizabeth Dwoskin reported.

Facebook’s handling of coronavirus misinformation has come under fire both publicly and private from the Biden administration.

Officials have felt Facebook has been less than forthcoming in meetings with the White House about the extent of its medical misinformation problem, as my colleagues reported last week.

Those sites’ activity is likely to fuel even more scrutiny of how the platforms are responding to potential medical misinformation.

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BPTH up 24% on clearance of IND for leukemia drug




Bio-Path Holdings Announces Clearance of Investigational New Drug Application for BP1002 in Refractory/Relapsed Acute Myeloid Leukemia Patients
•
•
Bio-Path Holdings, Inc.
Tue, August 24, 2021, 4:00 AM

Phase 1/ 1b Clinical Trial to Evaluate Ability of BP1002, Targeting Bcl-2 Protein, to Treat Refractory/Relapsed AML Patients
HOUSTON, Aug. 24, 2021 (GLOBE NEWSWIRE) -- Bio-Path Holdings, Inc., (NASDAQ:BPTH), a biotechnology company leveraging its proprietary DNAbilize® antisense RNAi nanoparticle technology to develop a portfolio of targeted nucleic acid cancer drugs, today announced that the U.S. Food and Drug Administration (FDA) has reviewed and cleared the Investigational New Drug (IND) application for BP1002 (liposomal Bcl-2), the Company’s second drug candidate, for an initial Phase 1/ 1b clinical trial that will evaluate the ability of BP1002 to treat refractory/relapsed acute myeloid leukemia (AML) patients.

“AML patients that fail frontline venetoclax-based therapy have very poor prognosis with a median overall survival of less than three months and a novel treatment modality is urgently needed for such patients. Preclinical studies indicate that the BP1002 and decitabine combination is effective against venetoclax-resistant cell lines, suggesting that the BP1002 and decitabine combination therapy may provide benefits to patients who have relapsed from venetoclax-based treatment,” said Peter Nielsen, President and Chief Executive Officer of Bio-Path Holdings.

By targeting Bcl-2 at the DNA level rather than the protein, BP1002 might overcome and prevent some of the mechanisms of resistance that affect venetoclax. The current standard of care for patients with AML not eligible for intensive chemotherapy is venetoclax, an oral Bcl-2 inhibitor that targets the BH3 domain of the Bcl-2 protein, in combination with a hypomethylating agent or with low-dose cytarabine. High expression of Bcl-2 has been correlated with adverse prognosis for patients diagnosed with AML. Preclinical studies have shown BP1002 to be a potent inhibitor against the Bcl-2 target, and its benign safety profile should enable BP1002 combination therapy with approved agents, such as decitabine.

“We are excited to move into these advanced clinical studies and look forward to generating data that not only support the DNAbilize platform but bring us one step closer to bringing these potentially lifesaving drugs to patients,” said Jorge Cortes, M.D., Director of the Georgia Cancer Center and Chairman of the Bio-Path Scientific Advisory Board.
The Phase 1/1b clinical trial is anticipated to be conducted at several leading cancer centers in the United States, including the Weill Medical College of Cornell University, The University of Texas MD Anderson Cancer Center and the Georgia Cancer Center.

Initially, a total of six evaluable patients are scheduled to be treated with BP1002 monotherapy in a standard 3+3 design, with a starting dose of 20 mg/m2. The approved treatment cycle is two doses per week over four weeks, resulting in eight doses administered over twenty-eight days. The Phase 1b portion of the study will commence after completion of BP1002 monotherapy cohorts and will assess the safety and efficacy of BP1002 in combination with decitabine in refractory/relapsed AML patients.

Gail J. Roboz, M.D., will serve as Principal Investigator for the Phase 1/1b trial. Dr. Roboz is professor of medicine and director of the Clinical and Translational Leukemia Program at the Weill Medical College of Cornell University and the New York-Presbyterian Hospital in New York City.

The IND review process was performed by the FDA’s Office of Oncologic Diseases, Division of Hematologic Malignancies and involved a comprehensive review of data submitted by the Company covering pre-clinical studies, safety, chemistry, manufacturing and controls, and the protocol for the Phase 1/1b clinical trial.

About Bio-Path Holdings, Inc.
Bio-Path is a biotechnology company developing DNAbilize®, a novel technology that has yielded a pipeline of RNAi nanoparticle drugs that can be administered with a simple intravenous transfusion. Bio-Path’s lead product candidate, prexigebersen (BP1001, targeting the Grb2 protein), is in a Phase 2 study for the treatment of blood cancers and is in the process of filing an IND for a Phase 1 clinical trial for solid tumors. The Company’s second product BP1002, which targets the Bcl-2 protein, is being evaluated for the treatment of blood cancers and solid tumors, including lymphoma and acute myeloid leukemia. In addition, an IND is expected to be filed for BP1003, a novel liposome-incorporated STAT3 antisense oligodeoxynucleotide developed by Bio-Path as a specific inhibitor of STAT3, in late 2021 or 2022.
For more information, please visit the Company's website at http://www.biopathholdings.com.

Bladerunner

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Some governmental agencies lie more than others. Look at what happened in Afghanistan... our military and intelligences agencies continually lied and wildly exaggerated our successes there for 20 yrs. There was some progress made as far as women's rights and education however no amount of U.S. military hubris or prowess could overcome the corruption and incompetence of the Afghan gov't, military and police and the lack of nationalistic identity and will of the Afghan people. The worst lies are the lies we tell ourselves and in Afghanistan it could not be more relevant.

I believe our health agencies (NIH, FDA, CDC) are generally reliable and truthful however mistakes and incompetence happen occasionally. Fortunately there is a system of peer reviewed studies and data that must be published and scrutinized prior to any agency decisions that keeps them in check. The scientific community outside the NIH has far more expertise than those inside. I believe the scientific community generally agrees with FDA and CDC decisions and actions however there are occasional disagreements...i.e. Biogen's aducanumab approval & Fauci's mask controversy.

I believe Fauci's statements on masks were misleading and confusing however the controversy is overblown IMO. Fauci should have stuck to the science instead of trying to manipulate people's attitudes and reactions to the pandemic. The CDC's response in the initial weeks was thoroughly bungled IMO.

I view the health agencies as similar to the FAA. In the early days plane crashes were common place however over the years after many air disasters, lessons were learned and regulations were implemented to correct mistakes by the aviation industry in the manufacture and operation of air planes. The NIH, FDA and CDC have followed a similar track. They're not perfect but much better than the past.

Corporations lie occasionally but there is so much oversight and so many regulations that lies are the exception rather than the rule. Occasionally a Theranos(Elizabeth Holmes) or Nikola(Trevor Milton) will come along however with whistleblower laws and the diligence of the shorts the truth will eventually come out. The biggest lies by corporations by far are those propagated through advertising.

The media is by far the biggest source of lies and misinformation IMO. There are 2 parts to what I mean by "media". There is mainstream media and social media. Both are protected by the 1st Amendment which gives them almost free reign to say whatever they want. Because mainstream media is supported by advertisers and in many cases has shareholders, there is much more pressure and incentive for TV, radio and print publications to be honest with their viewers. But some mainstream media have figured out that lying is good for ratings which allows them to jack up their advertising rates. Fox, OAN and Newsmax are examples of going overboard on that business model and now may end up paying billions to Dominion. Lies are protected speech however lies that result in economic harm or loss of revenues and/or profits can be remedied through the courts.

Social media is the wild card and a much bigger propagator of lies and misinformation than mainstream media...no contest. It's all about eyeballs and mouse clicks. It's a tough problem but I support Twitter, Facebook and Youtube for trying to get a handle on what are obviously outright lies and misinformation about COVID. the 2020 election etc. As public businesses they have the right to police their customers. Some may call it censorship but what people forget is that the 1st amendment only protects individuals from government or state censorship and the social media companies are well within their rights to take such actions as they see fit. The social media companies are not restricting anyone's speech. People still have the right to say whatever they want...they just don't have the right to use a megaphone.

The link below is a pretty good resource I use to check the political bias and factual accuracy of mainstream media. It's a good tool that helps me sort out what may be fact or fiction which is sometimes hard to tell.

It's a good starting point...

https://mediabiasfactcheck.com/

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>>> Pfizer Agrees to Buy Cancer Biotech Trillium Therapeutics at a 200% Premium


Barron's

By Josh Nathan-Kazis

Aug. 23, 2021


https://www.barrons.com/articles/pfizer-trillium-acquisition-cancer-51629726947?siteid=yhoof2


Pfizer acquisition values Trillum at $2.3 million. Company sees "blockbuster potential" for its cancer treatments.


Pfizer said early Monday that it had agreed to purchase cancer-focused biotech Trillium Therapeutics for $2.3 billion in cash, or $18.50 a share, a 118% premium over the stock’s average price over the past 60 days, and a 208.8% premium over its Friday closing price of $6.09.

Pfizer (ticker: PFE) has previously signaled interest in the company, and in September made a $25 million investment in Trillum (TRIL). A Pfizer executive sits on its scientific advisory board.

Trillium’s lead drug candidates, known as TTI-622 and TTI-621, block a molecule known as CD47, and are being tested in various types of cancer.

Shares of Trillium were up 187.6%, to $17.52, in Monday morning trading. Pfizer shares were up 3.5%. Shares of other Covid-19 vaccine makers were also rising after the U.S. Food and Drug Administration gave full approval to Pfizer’s Covid-19 vaccine on Monday.

“The proposed acquisition of Trillium builds on our strong track record of leadership in Oncology, enhancing our hematology portfolio as we strive to improve outcomes for people living with blood cancers around the globe,” said Pfizer Oncology global president and general manager Andy Schmeltz, in a statement out early Monday.

In a presentation posted Monday, Pfizer called TTI-622 and TTI-621 “potential best-in-class” compounds, and said they would diversify the company’s oncology pipeline, and could be used in combination with other Pfizer therapeutics. The drugs block a signal that cancerous tumors use to evade the body’s innate immune system.

The company said that the drugs have “blockbuster revenue potential” in the 2026-to-2030 time frame.

The more than 200% premium Pfizer is paying over Trillium’s Friday closing price raised some eyebrows early Monday. According to a database of biotech acquisitions maintained by the website BiopharmaDive, it is the third-largest percentage premium paid for any biotech firm since 2018. As of Friday, Trillium shares were down 58.6% so far this year, and 39.2% over the past 12 months. Of the seven analysts tracked by FactSet who cover the stock, all had Buy or Overweight ratings.

In a note out Monday, Bernstein analyst Ronny Gal wrote that Pfizer has lots of cash to spend. “Pfizer is now sitting in a position where it generates very large amounts of cash, with the need to place it to shore up post-Covid growth,” he wrote. Bernstein said that buying a company to acquire a drug that targets CD47 “is not very imaginative,” but “offers a solid risk reward.”

“We suspect that Trillium, realizing that staying competitive…would require large company resources, was a realistic seller,” Gal wrote.

The acquisition must be approved by Trillium shareholders.

Pfizer stock is up 32.4% this year as of the close of the market on Friday. It trades at 13.2 times earnings expected over the next 12 months, according to FactSet, slightly above its five-year average of 12.4 times earnings.

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