FINSUM + Magnifi: Gold Could Surge on Chinese Import Changes

April 20, 2021

China is one of the largest gold consumers in the world, but the pandemic has put the market in turmoil as supply couldn’t match. This has elevated domestic prices high above the international rates. However, China has permitted banks to import Gold into the country. This could be a boom to world gold prices as the country plans to invest $8.5 billion into imported gold in April for April and May supply. Vaccines and stimulus have halted Gold's growth as of late but a fundamental shift from a major bullion consumer might turn the market bullish.

Read more

FINSUM + Magnifi: Gold Bulls See Second Stimulus Package as Tipping Point for Another Run

April 13, 2021

Gold had one of its biggest runs last August, but gold funds and ETFs have been the real victors. VanEck Vectors Gold Miners is up 50% over the past year which is 1.5x the gain in Gold itself, and smaller miners have been gaining traction with Canadian Amex Exploration up 128% and Starr Peak Mining up 300% over the past 12 months. As the Biden administration looks immediately to another trillion-dollar stimulus infrastructure package after just passing the first one, many are worried about the ‘Cobra effect’, a phrase coined by Lawrence McDonald. Where stimulus will be short-lived and people will be short-changed with hyperinflation. Junior minors such as Amex and Starr Peak are capitalizing on new territory and are in a position to benefit from macro factors the most.

Read more

FINSUM + Magnifi: Wells Fargo Says Stage is Set for Gold

April 1, 2021

Wells Fargo’s head of real asset strategy John LaForge says gold could hit $2,200 an ounce this year. This
is all because of the news that gold supplies are deficient rather than excessive. LaForge pointed out
that it was supply deficiencies that sent gold on the rally from $250 to $1900 in the decade from 2001-
2011. LaForge said this could be gold's new “bull super-cycle”. Additionally, Wells Fargo sees traditional factors like easy money and a weak dollar as a positive outlook as well.

Read more

FINSUM + Magnifi: Goldman Sachs Bullish on Commodities Market

(March 2021)

Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials. The main reason behind this push is a variety of policies that are driving demand. The U.S. and Europe’s supply chains have been in a rut due to the pandemic, but governments are looking to change how they interact with the economy post-pandemic. The U.S. and China are looking to retool their supply chains in a variety of industries. This policy-focused push is creating micro-price pressures in industries. The supply can’t keep up currently, so as the dollar continues to weaken amid inflationary pressures commodities like oil offer an outlet to hedge the macro factors. Crude oil, copper, and Natural Gas are all up in 2021.
Read more

FINSUM + Magnifi: Why Gold is Positioned for a Bull Run

(March 2021)

The price of gold has been in a slump after it reached all-time highs mid pandemic. A variety of micro and macro factors are melding to put this commodity in a major second rally. The macro factors are as present as ever. The Fed is still expanding its balance sheet to pump up inflation. On the Fiscal side, the Biden admin is pushing its $1.9 trillion stimulus package. Inflation is on every investor's mind as treasury yields rise and TIPS spreads see it right around the corner. This precious metal is the classic asset to hold as cash loses its value, but for those who don’t want to own the commodity directly a Canadian mining company Starr Peak Exploration (STRPF) is poised to rally. It has expanded nearby mining territory and investors see it as a value play in the next bull run. Berkshire Hathaway has positioned itself behind Barrick Gold this last summer.
Read more

FINSUM + Magnifi: Why Gold is in for a Tough Year

(January 2021)

Gold had a very strong 2020 as investors feared chaos from the pandemic. However, 2021 looks likely to be a weak year for the metal. The reason why has to do with reflation. Everything the new Biden administration is planning to do (or not do) is part of an effort to reflate the economy. Whether that means the nearly $2 tn stimulus package that will be primarily directed to low income households, or new Treasury chief Yellen’s commitment to not intentionally weakening the US Dollar. All of this poses a major headwind to gold, as the metal yields nothing and will suffer as rates moves higher on creeping inflation.
Read more