Gold

Is gold a commodity, an investment, or money?

Gold is all of those things.

At times, it behaves like a commodity, following the ups and downs of commodity indices. At other times, gold is viewed as a safe-haven investment. When there is market turmoil, investors flock to gold because it is ‘old money’.

Right now, gold is behaving more like money than a commodity or an investment. Central banks have consistently devalued currencies since the market crash in 2008.

That’s a big deal because it shows that people around the world are losing confidence in paper currencies.

What indications are there that gold is behaving like money?

For one thing, gold’s price action has diverged from the price action of other commodities. This divergence first appeared in late 2014, but has become more pronounced in recent months.

Right now, as investors around the world lose confidence in a long list of emerging-market currencies, preferences are shifting toward US dollars and gold. This accounts for gold’s out performance of the rest of the commodity complex when measured in US dollars.

And when the price of gold is measured not in US dollars but in rubles, yuan or rials, the percentage price increase in gold is even more impressive, because those currencies have all declined lately against the US dollar.

When you understand that gold is money and competes with other forms of money in a jumble of cross-rates with no anchor, you’ll understand why the whole monetary system is going wobbly.

It’s important to understand that all currencies are just one form of money.

It’s not necessarily the best for all investors in all circumstances, but gold is a strong competitor in the horse race among various forms of money.

Lost confidence in fiat money starts slowly, building rapidly to a crescendo. The end result is panic buying of gold and a price super-spike. Why? Because gold doesn’t have a central bank and associated risks. In addition, gold always inspires confidence because it is scarce, tested by time, and has no credit risk. That’s why investors tend to flock to gold during times of uncertainty.

Deep Pockets Are Buying in to Gold Big Time

I finished up yesterday talking about our second biggest commodity export — gold. And I mentioned how my friend and colleague, Shae Russell, over at the Daily Reckoning, thinks there’s a huge investing opportunity for you here.

A Glimmer of Opportunity in Mining

Without mining, Australia’s economy would be a lot different. And probably a lot poorer. Indeed, my personal belief is that Australia must get cracking on things like renewable technology ASAP. Climate change politics aside, it’s a simple matter of hedging your bets.

Attack of the Drones

With the startling news over the weekend of an attack on key oil infrastructure in Saudi Arabia, the week has started off with a bang. Whether it turns into a whimper or not remains to be seen.

Bellevue Gold’s Share Price Rocky With Quarterly Report

Bellevue Gold Limited [ASX:BGL], who has resumed explorations at the historic Western Australian Bellevue brownfield Gold Mine (which had languished for around 20 years prior), has this morning released their June 2019 Quarterly Report.Highlights include a lightning-fast delineation of a 1.8Moz gold discovery in just 18 months. The company was evidently excited to let investors know about the potential of this discovery, with the second bullet point of the report reading, ‘[The 1.8Moz discovery is] one of the fastest & highest-grade gold discoveries globally.’

Why Evolution Mining’s Share Price Has Been Rising over the Last Year

Today, Evolution Mining announced its preliminary 2019 financial year operating results, as well as next year’s guidance.Gold production between the June 2019 quarter, sat around 194,886 ounces, with an All-in Sustaining Cost (ASIC) of $915 per ounce.Additionally, the company says cash generation of $109.4 million has thrust Evolution to a net cash position of $35.2 million as of 30 June.
Money Morning Australia