|Day's Range||1,437.70 - 1,454.40|
(Bloomberg) -- Gold, once mocked for its lack of yield and practical use, offers something the growing pile of negative-yielding bonds doesn’t -- inflation protection. Plus, it makes a great doorstop.As holders of promissory notes issued by sovereigns and companies watch the real value of their savings drain away amid central bankers’ efforts to kick-start growth, the allure of one of the oldest investment assets has become ever stronger. These five charts show just how popular gold has become -- and how closely it’s linked to the downward spiral in yields.The BreakthroughFor five years, resistance above $1,350 an ounce was too much for bullion to overcome. That changed in June, as it became clear the Federal Reserve was heading for a round of interest-rate cuts. Spot prices touched $1,453.09 on Friday, the highest level since May 2013 as global factory output slows and the market debates whether Chairman Jerome Powell will cut rates by as much as 50 basis points in July.Really YieldingGold’s inflation-busting properties and low opportunity cost when interest rates drop have never been as important as now. The inverse relationship between bullion’s price and U.S. real rates expectations, as measured by the yield on five-year inflation-linked Treasuries, is the strongest it’s ever been. The correlation measured over 60 days hit -0.7 as bullion climbed.Below ZeroEven before accounting for the effects of inflation, the universe of bonds yielding less than nothing hit a record $13 trillion this month. Add in the corrosive effect of general price rises, and that number swells to $25 trillion. It could even top $30 trillion if the Fed cuts rates twice this year, according to data compiled by Bloomberg.Not ZeroOf course, gold doesn’t yield nothing -- it yields less than nothing. In fact, it’s probably the original negative-yielding asset. Storing gold in a vault costs money. Some firms in London, a city known as a gold-storage hub, charge private clients between 12 and 20 basis points of the value of the metal for a year’s storage in secure vaults. Big clients, like central banks, may be able to secure deals closer to 8 basis points. Similarly, holding metal in an exchange-traded fund costs money. Nevertheless, the amount of metal stored in high-security facilities registered with the London Bullion Market Association started rising in October and continued doing so through March, the last date for which data was available. That’s probably because even at -0.2%, it looks a better deal than many bonds.Not Done YetBut is the rally getting stretched? Maybe not. While hedge funds increased bullish bets on the precious metal, the aggregate long position on futures as a share of open interest is only about 36%. That’s still below the peaks of 2011, 2016 and 2017, suggesting there’s some room for prices to rise as money managers may allocate more to bullion. And while holdings in exchange-traded funds have risen this year, the total amount of bullion in funds still isn’t as high as it was at the end of 2012. And some, like Bridgewater Associates’ Ray Dalio, suggest the market may just be at the start of a period that will be very positive for gold.\--With assistance from Garfield Reynolds.To contact the reporters on this story: Eddie van der Walt in London at firstname.lastname@example.org;Ranjeetha Pakiam in Singapore at email@example.comTo contact the editors responsible for this story: Kristine Aquino at firstname.lastname@example.org, Lynn ThomassonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com - Gold prices gained on Friday amid intensifying tension in the Middle East and rising expectations of aggressive Fed easing.
(Bloomberg) -- Eurasian Resources Group Sarl, the mining firm backed by the Kazakhstan government, is exploring options for assets in the Democratic Republic of Congo including a potential sale, according to people with knowledge of the matter.China Nonferrous Metal Mining (Group) Co. is among companies interested in the assets, the people said, asking not to be identified as the information is private. Deliberations are at an early stage, and ERG could decide against a sale, they said.Bidders could value the company’s assets at $3 billion to $4 billion while the seller may be seeking $7 billion to $8 billion, the people said. Valuing the assets is difficult because of political risks in the region and volatile metal prices, among other reasons, they said.A representative for ERG declined to comment. China Nonferrous couldn’t be reached for comment.ERG, which mines copper and cobalt in DRC, has been reviewing its investments and has already sold assets valued at about $1 billion, according to its website. The company is a major producer of cobalt, a material used in rechargeable batteries powering iPhones and Tesla cars, though it’s had to grapple with a supply glut and declining prices. Congo produced 72% of the world’s supply of cobalt last year.Read more about cobalt mining in the DRC here.The firm is also developing large-scale investment projects in Central Asia and Africa with the Chinese government as part of the New Silk Road initiative, according to its website.China Nonferrous operates in more than 80 countries and regions globally. It produces so-called nonferrous metals, which contain little or no iron, such as copper, lead and gold. The company also invests in mining projects in Zambia, Mongolia, Myanmar, Thailand and DRC, according to its website.\--With assistance from William Clowes and Elena Mazneva.To contact the reporters on this story: Carol Zhong in Hong Kong at email@example.com;Vinicy Chan in Hong Kong at firstname.lastname@example.org;Dinesh Nair in London at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com - Gold prices hit intraday lows on Thursday after a bout of better-than-expected U.S. data took some of the wind out of hopes for aggressive policy easing from the Federal Reserve.
Investing.com - Oil prices rose on Thursday in Asia after data showing U.S. crude inventories fell more than expected last week.
U.S. lawmakers repeatedly pressed Facebook's top blockchain exec to halt development of the Libra cryptocurrency in Tuesday's hearing.
Today we are going to look at Lena Gold-Mining Public Joint Stock Company Lenzoloto (MCX:LNZL) to see whether it might...
Investing.com - Gold prices turned lower on Tuesday after a strong retail sales reading sparked buying interest in the U.S. dollar and pushed Treasury yields higher, although stagnating industrial production briefly undid some of the move, while analysts recommended caution given high levels of long positions.
Investing.com - Oil prices steadied on Tuesday in Asia as more production facilities resumed output in the U.S. Gulf after Tropical Storm Barry made landfall in Louisiana on Saturday.
Investing.com - Gold prices headed higher on Monday as a boost in risk appetite from generally positive economic data was insufficient to derail demand in an environment marked by decreasing yields.
Investing.com - Gold prices were little changed on Monday in Asia after data showed China’s second-quarter growth data slowed to a 27-year low but matched expectations.
The cryptocurrency markets fell sharply on July 14 after bitcoin endured a $1400 sell-off, denying the bulls a chance to revisit 2019 highs.
An advocacy group is testing out the idea that the combination of bitcoin and orbital communication can help fight news censorship.