One after another, commodities from aluminum to natural gas have surged as COVID-19 pandemic aftershocks rattle supply chains. Gold could be next, although for very different reasons.
That is the view of two of the biggest names in Canadian mining — the former chiefs of Goldcorp Inc, David Garofalo and Rob McEwen — who predict that investors will catch on soon that global inflationary pressures are less transitory and more intense than central bankers and consumer price indices suggest.
When that realization sets in, gold’s inflation-protection appeal probably will send prices to US$3,000 an ounce, from about US$1,800 now, according to Garofalo, who ran Goldcorp before it was gobbled up by Newmont Corp and now heads Gold Royalty Corp.
Such a run-up would be a “down payment” to McEwen’s US$5,000 long-term prediction.
It comes as little surprise that gold executives have a bullish bullion outlook.
However, they do not often predict such a steep gain in so short a time. If other metals are any indication, the gold rally, when it comes, will be dramatic, Garofalo said in an interview on Friday alongside McEwen.
“I’m talking about months,” he said. “The reaction tends to be immediate and violent when it does happen. That’s why I’m quite confident that gold will achieve US$3,000 an ounce in months, not years.”
Gold for December delivery on Friday rose US$14.40 to US$1,796.30 an ounce, up 1.6 percent for the week.
The global monetary and debt expansion to cope with the pandemic, as well as secondary drivers associated with supply disruptions, will have people turning back to traditional methods of protecting wealth, said McEwen, the founder and former chairman of Goldcorp who now runs his namesake mining company and is a shareholder in one of the companies Gold Royalty is acquiring.
“It’s not just the dollar,” he said. “All currencies are buying less than what they were buying a year ago. So I look at that as an unprecedented development at least in our lives that is going to affect the value of fiat currencies around the world.”
Its universality and 4,000 year-old history mean gold is better positioned than cryptocurrencies as a hedge against an inflationary environment that “will have deep and meaningful impacts on our capital,” Garofalo said.
Inflation is also rippling through the gold industry, with labor and input scarcities emerging and costs rising.
That creates another incentive for mid-sized producers to seek savings through mergers and acquisitions after years of underinvestment saw reserves shrink, he said.
Additional reporting by AP, with staff writer
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors