Gold swot: palladium at a “golden cross”
Gold swot: palladium at a “golden cross” by Frank E. Holmes via KitCo News
- The best performing precious metal for the week was palladium, up 3.90 percent. Impala Platinum Holdings expects supply shortfalls for palladium to continue this year, sending the metal higher. The miner reported a 10-fold surge in profits to $950 million for the year ended June 30. CEO Nico Muller said if the platinum-group metal rally holds, the company may raise its dividend ratio above 30 percent of free cash flow. Palladium prices are nearing a “Golden Cross” – when the 50-day moving average moves above the 200-day moving average. The rally is also driven by China’s automobile sector, which saw an 11 percent rise in car sales in August.
- Australian gold output is surging and proves production didn’t slow due to the pandemic. Production for the three months ended June 30 totaled 85 tons, up from 77 tons in the March quarter. Output for the 12 months ended June 30 totaled a record 328 tons.
- The worst performing precious metal for the week was platinum, down 3.09 percent. Gold fell for a second day mid-week as the U.S. dollar rebounded. The equity rally continued amid hopes for a coronavirus vaccine. Gold and silver were down modestly on Friday ahead of the U.S. jobs numbers that were in-line with expectations.
- Due to sanctions and a collapsing oil industry, Venezuela is ramping up mining by moving into protected areas of the Amazon. Bloomberg notes the country already has a thriving illegal gold industry that harms waterways, forest and indigenous communities. According to a study by local non-profit Wataniba, the amount of land used for mining has more than tripled since March 2019.
- An artificial intelligence start-up is working to solve the problem of declines in ore grades at mines. British tech company Intellisense.io has software that uses sensors built into the plant to form a model of the grinding process and flag problems before they happen – a valuable feature when a company’s mines produce ore with lower levels of gold. Bloomberg notes that the mining sector has been slower to adopt AI in comparison with other sectors.
- The Dynamic Precious Metals Fund, which beat 82 percent of its peers this year, says gold is a “nice, safe” bet heading into the November presidential election, reports Bloomberg. Portfolio manager Robert Cohen says he manages his gold exposure risk by investing in a range of equities including explorers, producers and developers, rather than “just picking a bunch of producers off by market cap.”