Gold Stocks Dodge Drop as Risk Aversion Hits South Africa Assets … Gold producers escaped the worst of a two-day sell-off in South Africa as investors around the world switched to safer assets. While the rand headed for its biggest decline against the dollar in a week and was the second-worst performer in emerging markets, South Africa’s gold mining index jumped to the highest since February 2012 as investors sought havens from turmoil following the U.K. vote to leave the European Union. –Bloomberg
Once again, Bloomberg writers and editors can’t help themselves.
Metals are spiking around the world, but they include “gold” in a headline about a South African selloff,
All part of the anti-metals crusade that Bloomberg constantly wages.
In this case, there’s nothing negative to say about what’s happening in the mining sector or in South Africa.
Even Bloomberg has to turn positive as best it can.
AngloGold Ashanti Ltd. led gains as Johannesburg’s FTSE/JSE Africa Gold Mining Index advanced 6.4 percent. The price of bullion rose for a sixth day, climbing 1.2 percent to the highest since March 2014.
“The theme at this point in time seems to be an overwhelmingly risk-off one,” said Jana Van Deventer, an analyst at ETM Analytics in Johannesburg.
“This has also bolstered demand for assets like the U.S. dollar, developing market bonds, and it’s seen gold rally quite impressively.”
Bloomberg believes the gold and silver rally has to do with the uncertainty caused by Brexit. Not so fast.
We’ve pointed out that some of the metals manipulations may have fallen away and that, in any case, the larger positioning of metals in the world economy is turning quite favorable.
What’s driving metals is a lot larger than Brexit.
ETFDaily has posted an article on the subject entitled, “ What Is Causing The Surge In The Price Of Silver?”
It provides us with a good summary of the price action for metals.
Have you seen what the price of silver has been doing? On Monday, it exploded past 20 dollars an ounce, and as I write this article it is sitting at $20.48.
Earlier today it actually surged above 21 dollars an ounce for a short time before moving back just a bit.
In late March, I told my readers that silver was “ridiculously undervalued” when it was sitting at $15.81 an ounce, and that call has turned out to be quite prescient.
Our acquisition of a silver mining sponsor, our first ever, looks prescient as well. You can see contact information at the bottom of this article, or interview on the miner HERE.
ETFDaily believes that the potential implosion of European banks may be behind the continual metals rally.
Italian banks are sitting on the edge of a precipice, and in fact there is talk Italy might be the next to leave EU.
Deutsche Bank is insolvent as well. It’s not manipulating metals anymore. It just settled a lawsuit in April on that matter. Now it may go bust.
Also, the obvious surge of easing around the world which encompasses the Fed as well, provides a good metals environment.
Conclusion: No one is doing much tightening these days. Investors are watching Europe and trembling. Brexit is almost the least of it. Hiking metals prices may not be a rally after all but a long-term trend.
If you have questions about Golden Arrow, you can reach representative Shawn Perger here: Shawn: 1-800-901-0058 or 778-686-0135. See the website HERE.