Gold is down over 8% for the year and on target for its worst month since late 2016. This is despite traditional safe haven buy cues such as inflation scares, a weak US dollar, and an uncertain world, Gold bugs climbed into the precious metal after the Fed’s massive new stimulus package and talks of Fiat currency collapse. What happened? One thing, Bitcoin took much of that Gold bug clientelle and yields have tracked higher.
Chicago based Hedge fund Citadel has made massive profits on it’s commodity investments in 2020, over $1 billion according to Reuters. Much of the gains were in oil and gas from the price swoons from the Covid demand meltdown, Large gains were also said to be have made in agriculture commodities.
Gold exploded over $80 higher, the largest daily dollar gain ever following the Federal Reserve’s massive new stimulus package that includes unlimited purchases of Treasurys and mortgage-backed securities.
Goldman Sachs raised their price forecast for gold on Friday in a note to customers on Coronavirus fear. $GS had previously cited Modern Monetary Theory to higher ETF inflows, Geopolitical risk, stronger emerging markets, weaker U.S. dollar and negative real interest rates in Europe .
The Sino US trade war maybe biting Australia after all. October’s trade surplus fell a third seasonally adjusted as gold and ore exports slumped. In September had Australia posted another much larger than expected trade surplus. Australia ships nearly a third of its exports to China, led by iron ore and coal.
Gold and copper producer Newport Goldcorp announced a $1 billion stock buyback program Monday, which could represent about 3.2% of $NEM shares outstanding. The company also updated on it’s gold production.
Canadiian miner Barrick Gold Corp, the world’s second-largest gold producer quarterly adjusted profit nearly doubled as gold production rose. $GOLD expects gold production of 5.1 million ounces to 5.6 million ounces. The gold price hit its highest level in six years in June.
Gold and copper producer Newport Mining reported better than expected fourth quarter earnings Thursday with steady gold and copper production and lower operational costs. NEM agreed to acquire Goldcorp (GG) for $10 billion in an all-stock deal last month.
In 2018 coomodity prices were hampered by the strong US dollar which rose from mid-April, a collapse in oil prices from early October and the ongoing U.S.-China trade war. The best performers were cocoa, wheat, oats and last years best palladium. The worst performers were Gasoline, WTI Crude, lumber and sugar.