Gold mines set to benefit from end of equity bull market
Mining shares have seen a resurgence in contrast to a broader equity stutter. Although markets have been beset by uncertainty following European hustings the slowdown in the equity bull has been largely attributed to Trump’s inability to render his economic policies in action.
The absence of the much trumpeted red tape bonfire twinned with a recent Fed rate rise has seen investors hedge-off equities, moving to traditional safe-havens such as gold and gold mining. “It was Randgold, up 65p at 7260p, which stole the show on the blue-chip index amid concerns that the global market rally might have finally run out of steam,” reported the Evening Standard.
The appetite for an increase in gold production is making a case for going long on gold mining. “We are starting to see the start of a growth phase again where people are starting to build mines,” Randy Smallwood, CEO of Silver Wheaton, told Kitco News. Against this backdrop is the desire, shown recently by states such as Germany and Russia, to increase national gold reserves.
However, not all miners are benefiting. Tanzania’s Acacia Mining suffered a dive of 26.5p, or 5.6%, to 450.7p after it terminated merger talks with Canada’s Endeavour Mining. It is understood this is, at least in part, attributable to the Tanzanian government’s decision this month to ban exports of gold and copper concentrates.
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