Update on Africa’s biggest gold mine

Randgold Resources, the biggest London listed gold miner by market capitalisation and the 14th largest gold producing company in the world, currently operates the two biggest gold mines in Africa according to consultancy Metals Focus – the Loulo-Gounkoto complex in Mali and Kibali in the DRC – and both are among the world’s Top 20 gold producing operations – See: World Top 20 Gold Miners and Mines.

Last year Loulo-Gounkoto, at No. 13 on the global list, was the bigger producer, but Kibali was experiencing some technical and operational  difficulties which reduced its output a little, but still came in as the world’s 16th largest gold mine by production.  It is currently  putting the problems behind it as its underground operations build up to full output and it should regain its top spot among African gold mines by the end of the current year.

The mine is owned 45% by Randgold, 45% by Anglogold Ashanti, with the remaining 10% by DRC parastatal, Sokimo.  Randgold built the mine – located in one of the most remote areas of the African continent close to the DRC’s north eastern border with South Sudan – and operates it.

The company’s latest statement on the mine and its progress is published here in full, but note CEO Mark Bristow’s warning about possible DRC governmental goalpost-moving on the country’s mining code:

KIBALI HEADS FOR FULL PRODUCTION AS UNDERGROUND MINE NEARS COMPLETION AND SECOND HYDROPOWER STATION IS COMMISSIONED
The Kibali gold mine’s underground operation, which will significantly increase production, is on track to start commissioning in the third quarter of this year, Randgold Resources chief executive Mark Bristow said at a media briefing.

The mine is forecast to deliver approximately 610,000 ounces of gold this year, up from 585,000 ounces in 2016, but annual production is scheduled to rise to around 750,000 ounces from 2018, when the underground operation will make it fully functional.

Bristow noted that Kibali ended 2016 with a creditable performance after having to contend with a range of operational challenges as well as the constraints imposed by limited open pit mining flexibility.  In addition to dealing with these issues, the Kibali team succeeded in keeping the underground development on track, successfully constructing and commissioning four ultrafine grind mills in the metallurgy circuit, as well as progressing work on the mine’s second new hydropower station which was commissioned in February this year.  The third and last of the new hydropower stations is currently being built by an all-Congolese contracting group.

“Kibali has stayed on course to become one of the world’s great gold mines despite the challenges of last year and the volatile political climate in the DRC at present,” he said.

“Randgold remains committed to the DRC and is confident that its government, politicians and civil society have the will as well as the capacity to work together to secure the country’s future.  We therefore continue to invest in exploration here and to lead the way in developing the north eastern DRC as a major new gold mining region.  Our engagement with the country and its people is also evident in our substantial investment in local economic development and community upliftment programmes.  These include macro and micro agribusinesses designed not only to provide regional food security but to generate surplus produce for export.”

It was a source of concern, however, that the DRC government had once again signalled its intention of reviewing the country’s 2002 mining code with the clear intention of maximising state revenue, Bristow said.  This could have a very negative impact not only on the mining industry but also on the economy.

“Now more than ever the DRC should be focused on retaining its existing investors and attracting new ones.  It’s certainly not the time to harvest more from less for short term gain.  It’s my sincere hope that this time round the government will engage the mining sector fully in the proposed review to achieve an outcome that will be in the best interests of the Congolese economy as well as the country’s mining sector,” he said.

“The existing code is in fact a good one but it is not always being applied effectively and there are still many mining operations that do not operate under the code.  There are also a number of issues and challenges which mining companies are having to face which make operating in the DRC more challenging.  In Kibali’s case, these issues include more than $200 million in unpaid TVA and duty refunds.”

Correction and Update: Writing for US Gold Bureau

Corrected link to US Gold Bureau below.  Apparently the one I published originally won’t work.

Just to let readers know that I will be writing occasional original articles for Austin, TX based US Gold Bureau.  The articles, by agreement with US Gold Bureau, will not appear here.  The US Gold Bureau website https://invest.usgoldbureau.com is blocked from being viewed by computer users who do not have North American IP addresses as US Gold Bureau only provides its services in North America so isn’t interested in accesses from elsewhere.  However,  because lawrieongold has strong North American readership it may be worthwhile for my North American readers to log on to the US Gold Bureau site.  There is a work-around for those without North American IP addresses, if interested, through setting up and utilizing the Tor Browser which can be configured to make it appear you have an IP address anywhere in the world.

My first article on the US Gold Bureau site, is titled: What the FBI Investigation Into the Trump Campaign Could Mean for Gold.  If you have a North American IP address you should be able to read it by clicking on the link.

A second article looking at the importance of Swiss gold imports and exports and their significance in terms of global gold flows is also up on the site:  Switzerland is Key to Global Gold.  Again you’ll need an american IP address  – or a work-around – to access it.

World Top 20 Gold: Countries, Companies and Mines

Herewith a series of tables, all gleaned from Metals Focus’ Gold Focus 2017 report released last week, which between them confirm that Peak Gold is not with us quite yet, although probably getting very close.

Table 1.  Top 20 Gold Producing Nations 2015/2016 (Tonnes)

Rank Country 2015 Output 20 16 Output %  Change
1 China 460.3 463.7 +1%
2 Australia 279.2 287.3 +3%
3 Russia 268.5 274.4 +2%
4 USA 215.5 225.7 +5%
5 Peru 170.6 166.0 -3%
6 South Africa 165.1 165.6
7 Canada 157.7 162.1 +3%
8 Mexico 131.7 128.4 -2%
9 Indonesia 114.2 109.5 -4%
10 Brazil 95.4 96.8 +1%
11 Ghana 95.4 95.6
12 Uzbekistan 85.5 86.7 +1%
13 Papua New Guinea 58.1 60.4 +4%
14 Argentina 63.8 59.6 -7%
15 Tanzania 53.2 55.3 +4%
16 Kazakhstan 51.0 52.6 +3%
17 Colombia 49.2 51.8 +5%
18 Mali 49.2 50.1 +2%
19 Burkina Faso 38.6 41.6 +8%
20 Chile 42.5 40.7 -4%
  Others 57.5 58.1 +1%
  Total 3,220.2 3,255.4 +1%

Source: Metals Focus

Table 2.  Top 20 Gold Producing Companies 2015/2016 (Tonnes) (1 tonne= 32150.7 troy ounces)

Rank Country 2015 Output 2016 Output %  Change
1 Barrick Gold 190.3 171.6 -10%
2 Newmont Mining 156.6 162.9 +4%
3 AngloGold Ashanti 122.8 112.8 -8%
4 Goldcorp 107.8 89.4 -17%
5 Kinross Gold 78.9 83.3 +6%
6 Newcrest Mining 77.4 76.7 -1%
7 Gold Fields 67.2 66.7 -1%
8 Polyus Gold 54.8 61.2 +12%
9 Navoi MMC (est) 61.0 61.0
10 Agnico Eagle Mines 52.0 51.7 -1%
11 Sibanye Gold 47.8 47.0 -2%
12 China National Gold 41.5 42.1 +1%
13 Yamana Gold 38.9 39.5 +2%
14 Randgold Resources 37.7 39.0 +3%
15 Shandong Gold 36.0 37.1 +3%
16 Zijin Mining 37.2 36.1 -3%
17 Harmony Gold 33.3 33.2
18 Glencore 30.0 31.9 +7%
19 Freeport McMoran 35.5 30.8 -13%
20 Fresnillo 23.7 29.1 +23%

Source: Metals Focus,

Table 3.  World’s 20 Largest Producing Gold Mines 2016 (tonnes of gold)

Rank Mine Name Country Operator 2015 Output 2016 Output %  Change
1 Muruntau Uzbekistan Uzbek Govt. 61.0 61.0
2 Pueblo Viejo Dominican Rep Barrick 29.7 36.3 +22%
3 Goldstrike USA Barrick 32.8 34.1 +4%
4 Grasberg Indonesia Freeport 38.3 33.0 -14%
5 Cortez USA Barrick 31.1 32.9 +6%
6 Carlin USA Newmont 27.6 29.4 +7%
7 Olimpiada Russia Polyus 23.6 29.3 +24%
8 Lihir PNG Newcrest 25.0 28.1 +12%
9 Batu Hijau Indonesia Amman Mineral 21.0 26.7 +27%
10 Boddington Australia Newmont 24.7 24.9 +1%
11 Cadia Valley Australia Newcrest 19.8 23.5 +19%
12 Super Pit Australia Newmont 19.9 23.3 +18%
13 Loulo-Gounkoto Mali Randgold 19.6 22.0 +12%
14 Kupol Russia Kinross 21.6 20.7 -4%
15 Yanacocha Peru Newmont 28.6 20.4 -29%
16 Kibali DRC Randgold 20.0 18.2 -9%
17 Canadian Malartic Canada Osisko 17.8 18.2 +2%
18 Tarkwa Ghana Gold Fields 18.2 17.7 -3%
19 Kumtor Kyrgyzstan Centerra 16.2 17.1 +6%
20 Sukari Egypt Centamin 13.7 17.1 +26%

Source: Metals Focus, Lawrieongold

To read additional comment on the above, Lawrieongold readers should click on the following links:

 Top 20 Gold Producing Nations See Small Gain in Output in 2016

World Top 20 Gold Miners and Mines

 

 

 

 

Peak Gold:  Not there yet!

The first paras of a new article posted on the info.sharpspixley.com website

There have been a number of commentators out there telling us that the global gold mining industry has already reached peak output (Peak Gold), but according to Jeff Christian, one of the most astute gold analysts out there, we have not actually reached this yet.  Jeff runs the New York based CPM Group metals analysis consultancy which is due to release its Gold Yearbook 2017 later this week.*

Jeff differentiates between what he calls Peak Gold and Peaking Gold.  The former he describes as the concept that the world is running out of mineable gold deposits, which he refers to as ‘hokum’. There are many well known projects and deposits, he says, and also estimates and geologically based scientifically supported views that there is plenty of gold in mineable deposits yet to be discovered around the world. Some are in remote places that have not been adequately explored, like eastern Russia and much of China, the Tibetan plateau, the inner Amazon. Some are likely in plain sight, but may be uneconomic to mine, or too costly to develop, with current technology and at current metal prices.

He goes on to comment that any failure to find new gold orebodies reflects human missteps, not a lack of geological deposits. When you take current exploration expenditures and (a) deflate them for inflation and (b) adjust them for fluctuations in the quality and quantity of data parsing, you find that the amount of real money being spent on exploration for metals in general and gold in particular actually is a fraction of what it was in the glory days of discoveries in the 1980s and early 1990s. Furthermore, an increasing proportion of ‘exploration’ expenditures is being sucked up in costly computer modeling programs. Computer models are based on past discoveries. Just as  the pharmaceuticals industry is suffering from a dearth of new drug discoveries because it has shifted from laboratory work to computer generated concepts and models, so too the mining exploration industry is consigning itself to only discovering deposits similar to ones discovered in the past. If you only look for those types of deposits, you will not find new ones. So, the failure the find new gold deposits is not a geological paucity of deposits, but rather a function of human behavior.

In terms of ‘Peaking Gold,’ CPM Group sees gold mine production as having actually risen by 2.5 million ounces, or 2.8%, in 2016, and to rise by another 500,000 ounces, or 0.6%, in 2017.  The Group sees production peaking in the 2017- 2019 period, and then declining………..

To read full article click on:

LAWRIE WILLIAMS: Peak Gold: Not there yet! – CPM Group

 

PDAC Take-Away. Optimism for gold and mining in general

Another excerpt from a posting by me on the Sharps Pixley website.  Although unable to attend this year’s PDAC due to my recent stroke, one is able to get a good impression of the general air of optimism overhanging this year’s Mecca for the juniot mining and exploration sector. Attendance was up and gold, as usual, was leading the way for the junior explorer in particular.

But beware the scammers and the pump-and-dumpers.  Good stories abound, but few will stand up to detailed scrutiny!  To get a heads-up on just a tiny number of those setting out to fleece the unwary investor I suggest you subscribe for free to the Inca Kola News daily blog. While this looks primarily at Latin American mining, it also highlights, with no pulled punches and some sometimes rather forthright language, some of the more unsavoury elements of the Canadian junior mining scene.  Forewarned is forearmed.

Here follow the first few paras of the Sharps Pixley article:

The annual Prospectors and Developers Association of Canada (PDAC) Convention is truly something special.  Although unable to attend this year I have been watching reports on the event with considerable interest as it is very much a bellwether of the mineral exploration sector – and that is itself a great indicator of the strength, or otherwise, of the global mining industry and where it is headed.  This year’s PDAC took place from March 5th-8th inclusive.

I had been attending the PDAC since 1977 and it has always been one of the industry’s highlights.  Back then the whole event took place in the Royal York Hotel and attendance rose to around 7-8,000 at its peak before it transferred to the nearby Toronto Convention Centre, since when it has grown enormously to become what is probably the world’s biggest annual mining event.  Numbers of attendees peaked four years back at around 32,000 when the industry – and gold mining in particular – had been riding high, although had been beginning to turn down.

Gold exploration and mining has always been the principal driver of PDAC sentiment – and attendance.  At the time of the 2013 PDAC Convention the gold price was at just under $1,600 on its way down to a low of around $1,060 by December 2015, and numbers attending the event had fallen accordingly, but this year 22,000 delegates were expected, in line with the 2016 figure, and in the event 24,161 passed through the doors indicating a more optimistic outlook for the industry……………..

To read the full article click here 

Lies, Damn Lies, Fake News, Fake Views and Gold

Excerpt from my latest article on the Sharps Pixley website:

So much of the data we are fed by governments and quasi-governmental outfits like the US Fed are so massaged in favour of trying to maintain a positive sentiment among the great unwashed that they cannot be seen as comparable with supposedly the same stats from the the past.  I am indebted once again to Grant Williams (no relation) who points some of these anomalies out in great detail in his latest Things than make you go hmm… newsletter entitled ‘Fake Views Part II’ bringing the oft-quoted  “There are three kinds of lies: lies, damned lies, and statistics” into mind.  Interestingly the quote is often attributed to Mark Twain but he himself is said to have attributed it to British Prime Minister Benjamin Disraeli who may have been ahead of his time in forecasting statistical manipulation as political spin!

To illustrate his point Grant draws heavily on data and charts provided by yet another member of the Williams clan, John Williams (again no relation to Grant or myself) who runs the fascinating ShadowStats website which calculates government data the way it used to be calculated before the current era of using statistics as political weaponry.  This has distorted the figures used by US government entities, on which many, or most, of their economic decisions are justified, beyond recognition.  Indeed a significant part of the problem is that those making these decisions no longer question government-provided economic data but automatically assume its accuracy.

Take the cost of living for example.  If one goes by Fed figures CPI is growing at an annual rate of around 1.8-2% – a figure few consumers would recognise as applying to them!  If one calculates the Cost of Living index the way it was calculated back in 1980, inflation is actually rising on that basis at the much more recognisable figure of nearer 9% per annum – see the Shadowstats chart below:

To read the full article click here

Three articles on gold, the dollar and the Fed effect on them

While I may not have been publishing much on lawrieongold.com in the past few weeks or so,  I haven’t been being non-productive but have been publishing my own articles elsewhere while using this site for what I deem to be some pertinent independent comment.  Readers may thus like to have their attention drawn to a series of three articles, all published on www.info.sharpspixley.com looking at the effects on the gold price and the U.S. dollar of various statements by US Fed Board members and Heads of Regional Feds, which in concert suggested that rather than wait until June to implement the next Fed rate rise, which had been the consensus, that it was now likely to occur at the March meeting of the FOMC, which is now due in 10 days time.  The effect of these statements has been to drive the dollar index higher and the gold, and other precious metals prices, downwards.

In chronological order the three articles are as follows – click on the article titles to read in full:

1.       Gold price knocked on renewed talk of March Fed rate rise

President Trump’s address to Congress, and perhaps even more so statements by US Fed officials, saw the gold price drop more than $10

 

2.       Gold and silver holed by the Fed – again

The odds of the US Fed implementing a rate increase as early as the March FOMC meeting in 2 weeks’ time have increased to over 80% with gold and silver prices suffering accordingly.

 

3.       Gold, the dollar and the Fed. Fortunes made and lost?

The latest series of hawkish forecasts on a probable March interest rate rise could have given anyone with foreknowledge the opportunity to make enormous monetary gains.

 

Readers may also like to view articles I’ve been publishing on Seeking Alpha.  The latest of these is: Gold And Silver Stock Picks: How Are We Doing So Far. Which looks at the performance of some stock picks I made on December 30th – but be advised the article was written immediately before the various Fed grandee statements knocked the gold price back sharply.  However I still stand by my recommendations.

Chinese gold consumption: Far higher than most analysts and media tell us

Edited version of article which first appeared on news.sharpspixley.com on Feb 15th

Once again we are indebted to Koos Jansen for crunching the numbers on China’s gold imports in 2016.  He has added together direct imports to mainland China from the following nations/areas which publish detailed export statistics – namely Hong Kong (771 tonnes), Switzerland (442 tonnes), Australia (53 tonnes up until September – October to December figures not yet available) and the UK (only 15 tonnes, although most UK gold exports to China now seem to be being routed via Switzerland where the refiners take good delivery gold bars from the UK and re-refine them to the sizes and purities demanded in the East).  Jansen sees little more going directly into mainland China from other sources and allowing for around 20 tonnes going in from Australia for the final quarter of the year comes up with a grand total of Chinese gold imports at approximately 1,300 tonnes. (See: CHINA Net Imported 1,300t Of Gold In 2016)

In addition – the USA will have exported around 4.5 tonnes direct to the Chinese mainland, and Jansen also comments that South Africa doesn’t break down its gold export figures so he may well suspect that some is going in from there too – but the amounts will be relatively small so we can stick to 1,300 tonnes as a nice round figure.

Add to that China’s own gold output, estimated by Jansen at 453 tonnes and there will also have been a scrap gold element to be taken into account.  This suggests that China ‘consumed’ around 2,000 tonnes of gold in 2016, which equates quite closely to the Shanghai Gold Exchange (SGE) gold withdrawals figure for the year of 1,970 tonnes – (See: 2016 SGE gold withdrawals lowest for four years).  This would seem to confirm Jansen’s oft-made assertion that SGE gold withdrawals are equivalent to total Chinese gold demand – a premise largely dismissed (perhaps without any adequate reason) by the major gold consultancies which virtually all put Chinese demand at less than 1,000 tonnes.

In part, this discrepancy relates to what the major consultancies label as ‘demand’.  They tend to ignore what Jansen labels as institutional demand which he puts at at least 778 tonnes plus, depending on the amount of supply from scrap sources.

In terms of Chinese gold flows though, all the above figures ignore Chinese central bank demand.  While this, at least in terms of reported additions to its gold reserves, appears to have slipped in 2016, it still came to a little over 80 tonnes – so overall gold flows for China last year look to have been in excess of the 2,000 tonnes noted above, although not by much.  This equates to 60% plus of the total of global new mined gold in 2016.

One other point from the latest statistics is the continuing reduction of the proportion of gold flows into the Chinese mainland via Hong Kong.  Too often we still see media headlines suggesting Chinese gold demand has risen, or fallen, purely based on the stats coming out of Hong Kong.  Based on the gold import figures alone, Hong Kong now accounts for less than 60% of the gold going into mainland China.  Thus the Hong Kong figures can no longer be considered a proxy for total Chinese gold imports.  As Jansen points out in his article:

Most likely Hong Kong’s position as the largest gold exporter to China will slowly fade in the coming years, as the State Council is stimulating gold freight to go directly to Chinese cities (hoping the Shanghai International Gold Exchange will eventually overtake Hong Kong’s role as the primary gold hub in the region). Consequently, gold exports to China are increasingly bypassing Hong Kong.  In December 2016 we got a preview of what is about to come: Switzerland net exported an astonishing 158 tonnes directly to China, up 418 % from November 2016, up 168 % from December 2015, and 106 tonnes more than Hong Kong did.”

See our own take on the Swiss December figures: China 154, Hong Kong 39.  Swiss Dec gold exports show remarkable gold flows.  We have long been pointing out the decline in importance of exports from Hong Kong to the mainland in the overall Chinese gold import figures.  Perhaps our message will eventually get through to much of the mainstream media – and some ‘expert’ commentators and analysts – who continue to ignore this point and continue with headlines which appear to collate Chinese total gold imports with those coming in from its Special Administrative Region!

Get It, Got It, Gold 2 – The Presentation

Nearly a couple of months ago now we reported on Grant Williams’ December Things that make you go hmm…(TTMYGH)  newsletter entitled Get it, Got it, Good  which in turn was based on Grant’s presentation at last year’s Mines and Money London given in December, shortly after the election of Donald Trump as President of the USA. To read the original article click here.

We would highly commend Grant’s newsletter – it’s one of the few I get which I always read from start to finish as it gives a unique, and hugely valuable analysis of geopolitics, and geo-economics.  The reason I am returning to this is that Grant has now published the full video of his Mines & Money presentation without it being behind his newsletter subscription wall and I would commend all Lawrieongold readers to view it.  To do so click here.  The presentation highlights how Trumponomics differs from Reaganomics, although there are some common angles, and how much U.S. and global geopolitics/economics have changed since President Reagan’s policies set the U.S. economy on its then upwards path.  Don’t necessarily expect the Trump version to do the same is one of the messages.

Obviously I have altered the title here to insert ‘Gold’ instead of the ‘Good’ of Grant’s original – a title based on a verbal exchange between Danny Kaye and Basil Rathbone in the 1955 film – The Court Jester. This is because part of the comment involves the gradual demise of the petrodollar and the likely positive effects on gold of what Grant sees as the possibility for effectively exchanging oil for gold via the Shanghai Gold Exchange and a fully convertible yuan. A number of countries are now attempting to bypass the petrodollar and, at the same time, reduce their proportions of holdings of U.S. Treasuries in their foreign exchange totals as perhaps the world starts reducing its reliance on the greenback in global trade.  Grant sees all this as gold positive in the long term.

As an aside, the other newsletters I tend to read from start to end every issue are Otto Rock’s (pseudonym) often irreverent Inca Kola News daily blog posts digest – to keep abreast of the nefarious goings on within the Canadian junior mining markets, with particular reference to Latin American pump and dump operations and other scams.  Otto often uses language I would hesitate to  use myself – but which almost always makes for extremely interesting, and often amusing,  reading.  If you are interested in the Canadian junior miners sector this should be must reading in helping you sort the wheat from the chaff: Click on http://incakolanews.blogspot.co.uk/ .  The IKN daily digest is free, but Otto also publishes a paid weekly newsletter which offers specific investment advice.

I also read Ed Steer’s daily paid newsletter.s gives a somewhat right wing view on geopolitics and precious metals, but that covers angles often ignored by the mainstream media so is invaluable in highlighting aspects that one might otherwise not have access to without trawling through dozens of websites on a daily basis.  It also carries daily informed commentary on what is going on in the U.S. precious metals futures markets.

Gold:Silver Ratio Moving In Silver’s Favor

My latest article on Seeking Alpha

Summary

When the gold price advances, silver tends to do even better in percentage terms.

The Gold:Silver Ratio (GSR) is a great indicator of silver price trends and in recent days it has fallen below 70 and is testing 69.

Hecla Mining remains our precious metals stock pick for the year. It is already up over 14% year to date and we are only one month in!

To read full article click on: http://seekingalpha.com/article/4040993-gold-silver-ratio-moving-silvers-favor

Gold flows to China via Switzerland soar in December

The latest gold import and export figures into and out of Switzerland both showed huge increases in December with exports to China a particularly notable 158 tonnes compared with a rather small 30.6 tonnes in the previous month.  With gold flows into the Chinese mainland from Hong Kong also picking up in December this represents pre-Chinese New Year holiday demand and may also have been boosted by the lower gold prices prevailing in the final quarter of 2016.

Switzerland has always been a major conduit for gold flowing into stronger Eastern hands.  That into China for example stays there and doesn’t come out again.  The private Swiss gold refineries, Valcambi, Metalor, Pamp and Hereaus all specialise in re-refining gold scrap and 400 ounce good delivery gold bars into the smaller, mostly kilobar, sizes in demand in the Middle and Far East.

But most significant in the latest figures were the exports recorded to China of 158 tonnes – and given that China imports gold directly from a number of other sources too – this suggest a huge pick-up in Chinese demand at the end of a particularly weak year.  We have already pointed to a sharp fall in Shanghai Gold Exchange (SGE) gold withdrawals over the year (See:  2016 SGE gold withdrawals lowest for four years) which is symptomatic of the same overall reduction in gold demand in China over the full year, but whether the big rise in December imports from Switzerland is purely due to demand ahead of the Chinese New Year, or is gold price-related following the dip in US dollar bullion prices immediately following the US Independence Day holiday in July, is uncertain – but probably a combination of both.

bloomb-china-gold-imports-dec

The above graphic from bloomberg.com demonstrates the huge increase in Chinese gold imports from Switzerland in December.

UPDATE: Same old, same old. Yellen speaks, gold falls

Here’s a lightly edited version of my latest article posted on the Sharps Pxley website yesterday – trying to make sense of gold’s latest price movements as President Trump’s inauguration approaches.  Yet again today gold is testing the $1,200 level on the downside and this time around the level may not be held, particularly if the Donald’s inauguration address seems to be conciliatry, as it probably will be – but with Trump who knows?

Gold investors are obviously holding back until they see which way the wind blows.  The world’s biggest gold ETF, GLD, has seen no purchases or sales since last Friday when 2.96 tonnes were added.  GLD sales or purchases do seem to provide something of a guide to the gold price direction – in the US dollar at least, which looks to be strengthening a little today – indeed today’s gold price weakness may well be down to a small recovery in the dollar index.

The EDITED VERSION OF THE Sharps Pixley article follows:

Gold has had a decent run, after a sharp fall immediately following last month’s US Fed interest rate rise.  If one looks back to last year, the gold price was volatile, particularly before and after the various Fed Open Market Committee (FOMC) meetings and it looks that this year the same may happen all over again, but this time around gold price movement up or down may be tempered by the perceptions of how the USA’s 45th President’s proposed policies may affect the economy.  While the Fed may be set on at least three interest rate rises this year – Yellen’s San Francisco statement yesterday did nothing to suggest this wouldn’t happen – we still think they may play wait-and-see before pulling the interest rate trigger, although others, like the well-respected, but nowadays slightly alarmist commentator, Jim Rickards, think the Fed will move quickly and implement another 25 basis point increase as early as March.

This year’s FOMC meetings, at which interest rate decisions are usually made, are due to be held right at the end of this month (Jan 31-Feb 1), which is almost certainly too close to the President Trump inauguration (tomorrow) for any such decision to be made.  The following meeting will be on March 14-15 – Rickards’ suggested date for the next rate rise – then May 2-3 and June 13-14 bring up the balance of FOMC meetings in H1 2017. We think the Fed may err on the side of caution and wait for one of these latter two meetings to raise rates for the first time in 2017 – if at all – in order to see which way the economic wind is blowing after the first few months of office of perhaps the most divisive U.S. President ever.  However an early rate rise could be seen as a Fed attempt to regain credibility given its failure to match its own economic predictions in previous years.

For the record, the H2 FOMC meetings will be on July 25-26, September 19-20, October 31-November 1 and December 12-13.  Expect gold price volatility around all these dates, as we saw in 2016.  If the Fed does raise rates early and the U.S. economy looks stable, unemployment doesn’t rise and equity markets don’t collapse then there could be a further two, or even three, rises in H2, but the uncertainty around the Trump Presidency makes this far from a sure thing.

Yellen’s statement yesterday did reiterate that in her, and presumably her colleagues’, viewpoint the U.S. economy remains on course to be able to support three small interest rate hikes this year, and more next, with a potential target of ‘normality’ of around 3% by the end of 2019.  But the Fed has been notoriously poor in its predictions for the strength or otherwise of the U.S. economy over the past five years or so.  Has its forecasting suddenly improved.  The Trump Presidency could well throw the Fed’s projections into disarray yetr again – but this could go either way if the new President’s policies are perceived to be generally stimulative for the U.S. economy.

Yet Rickards, despite his prediction that the Fed will raise interest rates at the March FOMC meeting disagrees: “They (The Fed) will raise (rates) in March and then something will hit the wall, either the economy or the stock market or both. Then the Fed will backpedal from there, starting with a forward guidance then perhaps a rate cut later in the year,” he says on his blog, and recommends holding gold and U.S. 10-year Treasurys.

If Rickards is correct in his predictions, the gold price could fly in the final three quarters of the year as the Fed misses its interest raising opportunities again.  But others do see the U.S. economy, inflation and unemployment levels ticking all the boxes for the Fed’s interest rate raising plans going forward.

But so much will depend on President Trump and whether Congress will allow him to proceed with his plans to cut taxes, spend heavily on infrastructure to boost the economy and implement other fiscal stimuli and cut legislative blockages given the country’s huge debt position.  The Trump proposals, if implemented, can only increase debt!  If the Trump boost to the economy is thwarted – there may be a Republican majority in both houses, but there are a number of anti-Trump GOP members in Congress and coupled with probably blanket opposition from the Democrats still sore over the Trump Presidential Election victory – the Donald’s legislative path may thus not be an easy one.

The last day of April will see the Trump Administration’s first 100 days in office – a time when the media tends to make its first judgments of likely success or otherwise of the new President’s proposed programmes – and we believe the Fed should not take any interest rate raising decisions before then at least, although what we believe is a sensible course will hardly influence the FOMC in its deliberations!

What will the first 100 days see?  We think some of the proposed policies will have to be rolled back altogether and a number of compromises will have to be made to satisfy Congress, while the Senate may block one or more of the Presidents’ proposed cabinet members from taking office which coluld make for an adverse perception of President Trump’s promises and his ability to deliver on them..

Gold is testing the $1,200 level on the downside today, but the enormous opposition to Trump as President, which will likely be highlighted by huge demonstrations in the nation’s capital, may sober the equity markets and boost gold again temporarily – but thereafter volatile markets are likely until a much clearer idea of where Trump policies are taking the nation become apparent.

Perhaps precious metals investors should take heart though from my colleague Ross Norman’s price predictions for the current year – See:  Sharps Pixley Forecasts Gold To Average $1310 With A High Of $1390 In 2017

SP ARTICLE – LINK NOT WORKING: GATA Points to ‘Proof’ of Gold Price Suppression Intent

The link on the Sharps Pixley website to the above article doesn’t seem to be working and  readers can’t access it at the moment, so here’s a second copy of the original article:

GATA Points to ‘Proof’ of Gold Price Suppression Intent

It has long been claimed that the gold price, along with virtually every other traded market, is manipulated by financial interests which can lay hands on sufficient funds, or credit, to be able to do so.  That is an unfortunate aspect of the capitalist system and tends to benefit the big money, mostly at the expense of the small investor.  But since its formation in 1998 the Gold Anti-Trust Action Committee (GATA) has gone a stage further with its claims that not only is the gold price manipulated (which suggests it can be pushed up as well and down), but that there is collusion by big money (mainly the bullion banks), central banks and governments to go a stage further and keep the gold price SUPPRESSED, given that a rising gold price is seen by the financial markets as a sign of weakness in the almighty dollar and in the global economy.  That runs counter to the impression that governments wish to portray.

From time to time GATA has also managed to acquire documents which support its point of view in terms of memos from some key figures, particularly from the US Treasury and Federal Reserve, which would appear to support the idea of a gold price suppression policy.  And now it has just been involved in publishing a document, dating back to the early 1970s, which has just appeared in the TF Metals Report, citing a cable obtained by Wikileaks.

The cable, according to GATA, suggested that the U.S. gold futures market was created in December 1974 as a result of collusion between the US government and gold dealers in London to facilitate volatility in gold prices and thereby discourage gold ownership by US citizens.  That is perhaps an arguable contention as it perhaps rather points out the consequences of a change in US policy in allowing citizens to own gold.

The cable was sent to the State Department from the US Embassy in London and describes the embassy’s extensive consultations with London bullion dealers about the imminent re-legalization of gold ownership in the United States and possible substantial gold purchases by oil-exporting Arab nations.

The cable reads: “The major impact of private U.S. ownership, according to the dealers’ expectations, will be the formation of a sizable gold futures market. Each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison. Also expressed was the expectation that large-volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by U.S. citizens.

The cable is interesting not just for confirming the assertions by GATA and others in the gold-price suppression camp that futures markets also function as mechanisms of commodity price suppression and support for government currencies, an assertion perhaps first made comprehensively in 2001 by the British economist Peter Warburton, but also for showing the close connection at the time between the U.S. government and London-based gold dealers and producers, some of which are cited by name.  Those cited include Samuel Montagu & Co., Sharps Pixley & Co., Mocatta & Goldsmid, and Consolidated Gold Fields.  The first three mentioned were at the time London’s largest bullion dealers and the latter was in effect, mainly through its South African subsidiaries and associates, the world’s largest miner of gold.

It should be noted, however that none of the above cited companies exist in their original form nowadays, and, except perhaps for Mocatta’s successor, can  no longer be considered part of any grouping which exerts any significant effect on the gold price today.  The following is a note to set the record straight on this given that the companies quoted may well have had a major influence in the markets around four decades ago.

Thus, Samuel Montagu is no longer a bullion dealer/broker, but now just forms part of the private banking service of HSBC. The name was actually last used by HSBC in 2000. But its former precious metals broking activities will now form part of HSBC’s continuing business – but not under the Samuel Montagu name.

Sharps Pixley was bought by Kleinwort Benson and then by Deutsche Bank which effectively closed it down.  Subsequently the name was acquired by current CEO, Ross Norman, who relaunched the company around six years ago as a website portal to sell gold in UK markets, as well as providing news and information about the precious metals markets. In 2013 Sharps Pixley was acquired by Degussa Goldhandel from Germany which claims to be one of the largest sellers of retail physical gold in Europe, but the Sharps Pixley end is still run by Ross Norman.  It recently launched a state of the art retail bullion shop/outlet in London’s prestigious St. James Street.

Mocatta & Goldsmid is now ScotiaMocatta, the precious metal and base metal banking division of the  Bank of Nova Scotia, while Consolidated Gold Fields was originally the controlling entity for the gold mining company that is now Gold Fields of South Africa.

The abovementioned cable from the US Embassy in the UK to the State Department perhaps does not quite provide ‘proof’ of US Government involvement in actual gold price suppression, but is yet another piece of circumstantial evidence that it was certainly aware of the likely effects of the futures market on the gold price pattern and may well have colluded in this as being in its best interests.

 

SGE Gold Withdrawals 2016 – Big drop from 2015

The SGE has now published its December figure for gold withdrawals from the Exchange brining the 2016 total to a shade over 1,970 tonnes – around 24% down on the record 2015 figure – see Table below:

Table: Shanghai Gold Exchange Monthly Gold Withdrawals (Tonnes)

Month 2016 2015 2014 % change 2015-2016 % change 2014-2016
January 225.08 255.42 246.00 – 11.8%  -8.5%
February* 107.60 156.36 171.67 – 31.2% -37.3%
March 183.24 213.35 146.56 -14.1% +25.0%
April 171.40 195.45 129.59 -12.3% +32.2%
May 147.28 162.15 129.34 -9.2% +13.8%
June 138.51 195.67 128.03 – 29.2% +8.2%
July 117.58 285.50 137.53 – 58.8% -14.4%
August 144.44 265.27 161.95 – 45.6% -10.8%
September 170.90 259.98 202.43  -34.3% -15.6%
October  153.25 176.29 201.11  -13.1%  -23.8%
November  214.72 202.71 212.49  +5.9%  +1.0%
December  196.37 228.21 235.66  -13.9%  -16.7%
Full Year  1,970.37 2,596.37 2,102.36  -24.1%  -6.3%

Source: Shanghai Gold Exchange, Lawrieongold.com

For commentary on the latest SGE figures I’ve published an article on the Sharps Pixley website.  To read it click on: 2016 SGE gold withdrawals lowest for four years

 

How did gold and silver really do in 2016 and where are they headed this year?

Musings on what is likely to happen with precious metals in the year ahead and a look at how they actually performed in 2016 – very much a year of two halves.  Precious metals behaved really strongly up to the July 4th Independence Day holiday in the USA – but from there it was virtually all downhill for gold and silver, with big sales out of the Gold ETFs to accompany, or some would say drive, the price downturn.  This article was published on sharpspixley.com and, in the context of the timing of the price downturn should perhaps be read in conjunction with an article I published on seekingalpha.com; GLD Drops 158 Tonnes Since Independence Day and another published on the same site which also included some stock picks: 2017 Predictions – Gold, Silver, PGMs, The Dollar, Markets and Geopolitics…

Gold is, as usual, somewhat unpredictable.  Its performance in 2016 will have been very much dependent on the performance of your local currency vis-à-vis the US dollar.  Even in the latter the actual year-end price is also dependent on location and timing.  For example year-end prices in US dollars in Shanghai, London and New York were sharply different – respectively US$1,185, US$1,159 and US$1,151 based on the SGE final benchmark price for the year, the final LBMA gold price setting in 2016 and the final New York spot price.

We can’t view SGE comparisons for the full year as it only commenced announcing its benchmark prices back in April, but from the final LBMA price for 2015 to that in 2016, gold rose 9.1% over the year.  In terms of New York prices gold rose a slightly smaller 8.5% over the year. On the other hand in Russian rubles the gold price FELL by 10.6% over the year as the ruble appreciated against the dollar after a very sharp fall in 2014/15.  On the other hand, in the Pound Sterling, the UK gold price rose 22.5% over the year!  The Brexit vote effect!

But, as far as the media is concerned it tends to be the US dollar price which is the only one which matters so let’s look at the prospects for the gold price in the year ahead in US dollars – and for the other precious metals as well.

While global geopolitics and economics all have an effect on the dollar price of gold, it will almost certainly be the US itself and the impact on it of the Trump Presidency’s policies which will be the primary gold price drivers.  If President Trump is perhaps as unpredictable as his performance through the runup to the election suggests then we could see some major domestic and foreign policy upsets in relation to what has gone before.  Trump’s stated policies on the US economy have proved popular with Wall Street, but may well not fly – at least not nearly as quickly as the general public might expect, or even at all.  This could all see a reversal in the seemingly inexorable advance of general equities and an about-turn by the Fed in terms of interest rate rises, both of which would likely see a boost in the gold price.  Indeed general equities could crash given that they look to be overbought and in most cases earnings don’t look sufficient to justify the high prices currently prevailing.  At some stage the stock price bubble will surely burst.  Some ‘experts’ are predicting a crash of epic proportions – perhaps 80% -but although this is indeed possible we reckon that if there is a major correction ahead it will be more in the order of 50% as in the 2008/9 crash when the Dow fell around 55% at one time.

Should an equities market crash of this magnitude occur again, similarly to 2008 the gold price could be brought down sharply too as funds and investment houses struggle for liquidity and a fall to $1,000 or thereabouts wouldn’t be out of the question but again, as in 2008/09, gold would likely recover far faster than equities and then go from strength to strength as its safe haven role would become paramount again.  Where gold might end 2017 therefore could be a matter of timing.  If equities don’t crash, but perhaps correct by say 10-15%, then gold could well hit the $1,400 mark during the year.  If there is a major equities crash and it happens early in the year, gold could still hit the $1,400 mark – and steam on upwards in 2018, but if there is an equities market crash, and it peaks in the final quarter of the year then gold could well end the period in a much weaker position – but still steam ahead in 2018.

On Foreign policy there would appear to be, on the face of things, the likelihood of a rapprochement with President Putin’s Russia – if Congress allows this to take place.  The nomination of Rex Tillerson as Trump’s Secretary of State certainly suggests a change of relationships here, although it is yet possible that Tillerson’s nomination may be rejected by the Senate.  Trump may well be trying to take a leaf out of President Ronald Reagan’s book whose positive relationship with Russia’s Mikhail Gorbachev led to the end of the arms race, perestroika and effectively the end of the US/Russian stand-off, which now seems to be being resurrected by the current leaderships of two of the world’s three superpowers.  But while Trump may be heading towards a less hostile relationship with Russia, he also looks as though he may also be stirring up problems ahead with the third major superpower, China.

Domestic and foreign policy uncertainties may form the crux of a gold price resurrection in 2017.  This may already have started in 2016, but big financial sector interventions from around mid-year succeeded in nipping that in the bud – even so gold was up around 8% over the year and silver an even higher 15%.  This was after being up respectively around 25% and 45% immediately after the US independence Day holiday – a turnaround date which saw inflows into the world’s largest gold ETF switch to major outflows (See: GLD Drops 158 Tonnes Since Independence Day).  The referenced article looks at the seemingly pivotal impact of major holidays in the USA seemingly often providing the inflection points for complete changes in investment sentiment with respect to precious metals prices.

Where all the political and economic uncertainties which lie ahead will impact is probably on the strength, or otherwise, of the US dollar.  It is currently riding high, in part due to the US Fed’s 25 basis point interest rate rise and the avowed prospect of two or three more such increases during the year.  But those with even short memories may recollect that the Fed promised the same thing for 2016, but didn’t deliver.  Could it be déjà vu all over again in the immortal words of Yogi Berra!  We doubt the Fed will move until after it sees the initial impact on investment sentiment of the Trump Presidency.  The Fed’s FOMC meetings this year are scheduled for Jan. 31-Feb. 1, March 14-15, May 2-3, June 13-14, July 25-26, Sept. 19-20,. Oct 31-Nov. 1 and Dec. 12-13, thus we doubt any move to raise rates will happen until at least the May meeting, and perhaps not until June unless there’s a huge (and in our view totally unjustified) equities surge immediately following Trump’s accession to the White House.  If Trump’s supposedly business-friendly initiatives run into serious opposition in Congress then the dollar may well suffer.

But, there’s little doubt that dollar strength will be important for the gold price and the prospects of a trade war with China and the unwinding of some other key trade agreements, which Trump appears to wish to implement, could be destabilising for the greenback.  It is also perhaps not in US interests for the dollar to appreciate further – the dollar index (DXY) is currently comfortably above 103 which is a new record having varied between 91 and 103 during 2016, and this may colour the Fed’s thinking on interest rate rises too.  A high dollar makes US exports less competitive (which is why so much US company manufacturing activity has moved offshore), and imports cheaper, which would be a further blow towards trying to balance the nation’s current account.  We suggest that, over the course of the year ahead, the Fed will move surreptitiously to bring the dollar index down to perhaps a level of around 95, which is not conducive to further interest rate rises and which is gold positive.

While gold opened higher in early New Year trade, it rapidly lost ground, falling below the key $1,150 mark in Europe.  It remains to be seen how the US will react once markets open there.  But again, in 2016, it opened the year weaker before surging upwards.  Will this year see a repeat?

If we are correct in our assumptions about gold and we do see something of a repeat of 2016, then silver will do even better.  The gold:silver ratio (GSR) has slipped back to over 72, up from around 66 when silver peaked in mid 2016 (it had started the year near 80 and at one stage had risen to close to 84) but we think that if gold does perform then a GSR of around 65 could be seen again given silver tends to outperform gold in a rising gold scenario – and if gold hits $1,400 then silver could rise to over $21, still a huge way short of the near $50 it hit back in 2011 before a massive price takedown.

So overall a positive view of the gold price in the year ahead and perhaps an even more positive one on silver, BUT if there is a general equities crash as many doom and gloom merchants are predicting (and the uncertainties surrounding the Trump Presidency would perhaps make this even more likely) then booth gold and silver could suffer heavily in the financial fallout.  The comfort here is that would likely not be as intense a fall as the equities market and the recovery would be far quicker.

Paranoid Americans may stymie some positive Trump policies

Donald Trump, assuming all is well, will receive the keys to the White House in a little under three weeks’ time and thereafter could change the face of US politics.  Some of his announced policies during the Presidential Election hustings, fill this distant observer with dread, and The Donald’s historical indiscretions and financial dealings may well come around to bite him in the bum and even put his likelihood of completing a full term in jeopardy, although if this is the case he would probably have to be forced out of office – his huge ego would likely prevent him from resigning.  What odds on a President Pence ahead?

However, among his proposals for revival of the US economy and in realigning some aspects of US foreign policy there are, in the writer’s opinion both positives and negatives, but what are the chances of some of what I see as positives being allowed to proceed by a Congress which may be opposed to some of them in principle – be they Democrat or Republican?

Principal among these Trump flagged intentions is a rapprochement with President Putin and Russia, whether or not there was Russian involvement in the hacking into Democratic National Committee emails.  Julian Assange, whose Wikileaks organisation publicised the emails, and certainly no fan of the US Administration, has denied Russian involvement and the President Obama accusation that President Putin may have been directly involved in authorising the alleged hacking smacks of opportunistic posturing by a Democratic President whose party had just lost the Presidential election to a candidate who was anathema to half the American population – and to much of the Western World as well.

Both Russia and the USA have a paranoid streak when it comes to the other stemming from many years of mutual distrust.  What might be considered as legitimate by the one may be seen as a major threat by the other and nowhere is this more apparent than in Eastern Europe.  Russia’s annexation of Crimea with its dominant ethnic Russian population is a case in point.  Given that Russia had, by agreement, based its Black Sea naval fleet there meant Crimea was of major strategic interest to Russia and the changes in the Ukraine Government resulting in the ousting of President Yanukovyc, which seemingly were orchestrated by the US, had put this at risk.  The threat of NATO expansion into the Ukraine will have contributed to Russian paranoia over the military threat this posed given NATO had already moved forces into other areas which had previously been part of the Former Soviet Union, contrary to what Russia believed were promises by NATO not to expand into these territories.

The Crimea move brought US and European sanctions against Russia into play, damaging the latter’s economy, although this has made something of a recovery as European trade has been partly, at least, replaced by building additional Asian trade ties.  Indeed the sanctions have probably been more economically damaging to Europe than to Russia.  But the sanctions are set to persist until Crimea is returned to Ukraine – a highly unlikely outcome given it would hugely undermine President Putin’s credibility.

The paranoia is not just one sided though.  The US population has a hugely paranoid streak when it comes to any individuals or regimes seen as acting in contrast to what are seen as the US’s best interests.  This is aided by national media which are largely little more than propaganda outlets for the Administration – not that this is any different in Russia, or in most other countries for that matter. This was brought home to me by US attitudes to Al Jazeera, which is a pretty independent Middle Eastern-based TV news station which is in general an accurate reporter of Middle Eastern and World Affairs.  Al Jazeera was demonised by the US Administration and media over its Gulf War reporting – not because it was inaccurate, but because it did not necessarily follow the US propaganda line over what was actually happening on the ground.  To this day the majority of Americans still seem to believe that Al Jazeera is totally anti-American.  Indeed, if asked, many Americans who have never watched Al Jazeera probably think of it as a propaganda outlet for Islamic State, which it patently is not.

And so it is with Russia, as it was with Communism with which Russia is still equated in the USA.  (This spills over into Cuba too – it will be interesting to see how Trump resolves all this – he seems to be pro-Russia and anti-Cuba).  The Russian/Communism paranoia probably has its roots in the McCarthyism era of the 1950s – described by Wikipedia as “the practice of making accusations of subversion or treason without proper regard for evidence” – in which many prominent Americans were unjustly branded as having Communist leanings and suffered loss of employment and/or destruction of their careers; some even suffered imprisonment. Most of these punishments came about through trial verdicts later overturned.

Thus Russia becomes a convenient scapegoat for perpetrating anything that might be considered anti-American – like hacking into the DNC emails – even though it is probably seen as perfectly legitimate for American agencies  to undertake similar practices and try to help promote regime change in countries where policies are seen as running counter to American interests.  We live in an era of government spin and as one gets older one becomes more and more sceptical about what our own governments and media are telling us.

But back to American paranoia.  Trump’s avowed policies of getting closer to President Putin – in a similar manner to President Reagan with President Gorbachev – in our view could go a long way towards defusing global tensions.  It could certainly help bring an end to the Syrian conflict, although that could also align the US with Iran and Hezbollah, as well as President Assad,  which would be a decidedly uncomfortable relationship.  However with many in the US Congress, on both sides of the political divide, having been imbued almost since birth with anti-Russian feelings, they may well seek to block any closer relationship with President Putin’s Russia.

What of Trump’s other flagged policies?  Some will undoubtedly fall by the wayside anyway.  Certainly getting Mexico to pay for the much vaunted border ‘wall’ seems unlikely to see the light of day.  The massive proposed infrastructure building programme cannot be an immediate fix and may be fraught with difficulties anyway and we suspect that delays in implementing this will have an adverse effect on equities markets.  Tax cuts would be popular, but again may be easier in theory than in practice as so often these are perceived to benefit the ‘already-haves’ more than the ‘have-nots’.

On other foreign policies a confrontation with China may well not be in American interests, although Trump seems determined to venture down this path.  A potential military confrontation in the South China Sea seems to run counter to suggestions that the US may refrain from intervention by force in the affairs of other nations – policies which have cost America dear and cost the countries in which it has been militarily involved even more dearly in terms of infrastructure destruction and huge losses of life.

Some kinds of economic moves against the Middle Kingdom and against US  companies which have set up manufacturing outlets there, and elsewhere to take advantage of lower wages, look to be on the cards.  These could be counter-productive in that China, in particular, may just use that as an excuse to take over these manufacturing plants and produce competitive products at even lower prices.

Trump’s policies on Taiwan could also have a major negative effect in terms of confrontation with China, but here again US Congress may prefer to retain the status quo, although Trump’s unpredictability will raise doubts as to whether he’d pay heed.

Unpredicatbility may well be the key take-away from a Trump Presidency.  In theory, altyhoughh not always in practice, safe haven assets thrive on unpredictabily.  The No.1 sahe haven asset has been the US dollar but this could well suffer if Trump’s policies don’t set the American economy back on the upwards track.  Indeed we believe the dollar could be heading for something of a fall as early as by the summer if Trump’s policies don’t have an immediate positive effect on equities and the US economy and a falling dollar will likely mean a rising gold price (in US dollar terms at least) and a rising gold price could well lead to an even more rapidly rising silver price, with the even better beneficiaries being gold stocks and silver stocks .  Our thoughts on this scenario are laid out in an article on Seeking Alpha- 2017 Predictions – Gold, Silver, PGMs, The Dollar,  Markets and Geopolitics.  Do read and draw your own conclusions!