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
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US