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SA’s gold stocks soar

As bullion closes in on record.
Image: Carla Gottgens, Bloomberg

An index of gold stocks in Johannesburg rose as much a 2.7% to a fresh all-time high on Monday, as bullion prices look set to take out the record reached in 2011, amid loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation.

“JSE-listed gold shares’ performance is a function of the gold price in rands, so dollar gold price and rand exchange rate are both important,” said Meryl Pick, a money manager as Old Mutual Investment Group, who helps oversee the firm’s R10 billion Investors Fund.

The rand price of gold has risen for a third day. The index of gold companies is up 103% in 2020, accounting for the five best-performing members of the South African benchmark index.

The gauge’s 14-day relative strength index rises to 76.7, above the level of 70 that some technical analysts see as an indication that the shares have risen too far and are overbought. But the stocks could have further to run.

“Gold stocks are ultimately leveraged to the gold price and will track this higher in a rising gold price environment,” Pick said.

“Based on a 2-3 year view, the gold price could still find support as central banks will likely keep interest rates at all-time lows to support a global recovery, and we have entered levels of unprecedented money creation by the U.S. Federal reserve, which may have knock-on effects on inflation.”

© 2020 Bloomberg L.P.


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How many years of gold do we have left?

Decades at $3000/oz

Probably 5 – 7 in my opinion, if you look at long-term charts average gold bull markets last about 6 years. That is a very good time horizon. Compounded by the out of control central banks the environment is ripe for gold to show why it has stayed relevant in the commodity and hedge space for more than 4000 years

1. Buy physical gold, if you can’t afford, then go for physical silver.

2. This is TEOTWAWKI, there is no getting back to normal.

3. The whole mask think is an initiation ritual, and also a prequel to the mark of the beast, where we wont able to buy or sell.

4. Get out of the system.

I remember it must have been about 10 months ago that Old Mutual asset managers wanted to merge (read close) their Gold fund with their general equity fund. Can you imagine the mayhem now if that had proceeded. Obviously investors in the gold fund want exposure to…. GOLD.

Long may it last!

End of comments.


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