We use cookies (including third-party cookies such as Google) to remember your site preferences and to help us understand how visitors use our sites so we can improve them. To learn more, please see our privacy policy and our cookie policy.

To agree to our use of cookies, click 'Accept' or choose 'Options' to set your preferences by cookie type.

Options Accept
BullionVault

CHARTS

  • English
  • Deutsch
  • Español
  • Français
  • Italiano
  • Polski
  • 日本語
  • 简体中文
  • 繁體中文
  • Daily audit
  • Help
  • Contact
  • Deposit
  • Login
  • Open account
  • ABOUT US
    • About BullionVault
    • In the press
    • Reviews
    BUY/SELL BULLION
    • Vaulted gold & silver
    • -Live order board
    • -Daily Price
    • Coins for delivery (UK)
    INVESTMENT GUIDE
    • Guide to gold
    • -How to buy gold
    • -Gold investment
    • -Gold investment plan
    • -Investment insurance
    • -Compare asset performance
    • Guide to silver
    • -How to buy silver
    • Guide to platinum
    • -How to buy platinum
    GOLD NEWS
    • Gold news front page
    • -Gold price news
    • -Opinion & analysis
    • -Market fundamentals
    • -Gold/Silver Investor Index
    • -Infographics
    CHARTS
    • Gold price
    • Silver price
    • Platinum price
    • Price alerts
  • Login
  • Open account
  • BUY/SELL BULLION
  • Vaulted gold & silver
    • ⤷
    • Live order board
    • Daily Price
  • Coins for delivery (UK)
  • INVESTMENT GUIDE
  • Guide to gold
    • ⤷
    • How to buy gold
    • Gold investment
    • Gold investment plan
    • Investment insurance
    • Compare asset performance
  • Guide to silver
    • ⤷
    • How to buy silver
  • Guide to platinum
    • ⤷
    • How to buy platinum
  • GOLD NEWS
  • Gold news front page
    • ⤷
    • Gold price news
    • Opinion & analysis
    • Market fundamentals
    • Gold/Silver Investor Index
    • Infographics
  • CHARTS
  • Gold price
  • Silver price
  • Platinum price
  • Price alerts
  • ABOUT US
  • About BullionVault
  • In the press
  • Reviews
  • Help
  • Contact
  • Daily audit
    • English
    • Deutsch
    • Español
    • Français
    • Italiano
    • Polski
    • 日本語
    • 简体中文
    • 繁體中文

Gold News

Live support

NEED HELP? ASK US NOW

Search form

Gold News front page

Gold Price News

Gold Prices Hit 7-Week High as US Retail Sales Surge on Stimmy Checks, China Vows to Stall Inflation

More...

Gold Investing In Depth

Learn about gold bullion bars

Learn about gold bullion coins (and costs)

Gold investment: Why & how?

Gold Investment Analysis

  • Latest Gold Investor Index
  • Diversification: Gold as investment insurance
  • 40-year Asset Performance Comparison Table

Gold Articles

Opinion & Analysis

Gold Price News

Investment News

Gold in History

Gold Books

Gold Investor Index

Gold Infographics

Archive

  • April 2021 (14)
  • March 2021 (26)
  • February 2021 (23)
  • January 2021 (25)
  • December 2020 (24)
More...

List of authors

What Currencies Mean to Gold Miners

Saturday, 2/06/2016 10:05

Weaker commodity currencies are boosting some gold miner earnings...

RALPH ALDIS rejoined US Global Investors as senior mining analyst in November 2001, and is now responsible for analyzing gold and precious metals stocks for the World Precious Minerals Fund (UNWPX) and the Gold and Precious Metals Fund (USERX).

Now in 2016 he says mining-stock investors have to pay attention to the way currency moves affect earnings, as he explains in this interview with The Gold Report...

The Gold Report: This year started with a bang as China's machinations rocked markets all over the world and set off a gold rally. Is that sustainable? What did we learn?

Ralph Aldis: China was the main driver of the volatility that started out the year. The economy is not collapsing. Growth will just be a little bit slower than expected.

I also think people are losing faith that the Federal Reserve will be able to maneuver the markets this year. What's really been disturbing to me is how much central banks all around the world are intervening in stock markets. To me, that's a recipe for disaster.

Gold was the beneficiary of these dark notes. Investors need to understand that, regardless of what the pundits are saying. All investors need an asset plan designed around individual timelines. Then they have to stick to it and rebalance.

TGR: Frank Holmes points out on his Frank Talk blog that gold actually performed well in 2015 in some currencies. Where are you looking for gold to do best this year? What does that mean for North American investors?

Ralph Aldis: The Canadian Dollar was a standout last year. We are looking at $1600 per ounce gold prices in Canada right now. The same is true for Australia. In other countries – Russia and Brazil for instance – it has been even more pronounced because of the Ruble and the Real, but there just aren't that many names to invest in there right now.

I think the Canadian Dollar is still going to weaken a little bit more this year. We saw the Bank of Canada hold off on cutting rates at its last meeting. I still think the bank is going to end up having to cut rates at some point in the not too distant future. The Canadian Dollar will get weaker and that will be very positive for the metals prices. On the Aussie side, I see the same trends happening. Gold companies operating in those regions have an advantage over some of the other miners out there.

TGR: And do you believe the US Dollar will continue to be strong?

Ralph Aldis: Yes, but I don't think we're going to see a runaway US Dollar. Cornerstone Research has shown that historically the Dollar rallies up into the first rate hike and then generally tends to fade after that. With the emerging markets' currencies down so much, that's probably going to trigger some growth in those regions, too.

TGR: One of the things that you and Frank follow is the Purchasing Managers Index to measure economic health. What is the cross-above trend telling you about global growth?

Ralph Aldis: The most recent global manufacturing chart showed cooling in December, which resulted in the one-month reading falling below the three-month moving average. The average had been rising slightly since September, but the last two data points from November and December were kind of trending down. The recent market turmoil indicates we are probably still looking at some weakness this year.

TGR: The other thing that you've written about is the strategy of royalty companies to buy when the streams are on sale. What does that tell you about where we are in the cycle?

Ralph Aldis: That's an interesting dilemma right now. The royalty companies have traditionally been one of the best places to be long term, and I think that still probably holds because they have a very diversified risk portfolio. The big challenge now is they don't have the capital available to do more. They could borrow.

TGR: With all of this going on, how are you adjusting the US Global portfolios to prepare for what could happen in 2016?

Ralph Aldis: We haven't changed too much. Most of our big positions are still oriented along the same weightings. If we do get a gold rally, some of the highly leveraged names may be the bigger beneficiaries. I always have to be cognizant of that. Last year, I avoided some of the highly leveraged names, but that may change this year. I do feel that we're getting closer to a turning point.

There are a lot of reasons for that. The Fed is trying to raise rates. In a news article recently, Goldman Sachs advised selling the 10-year Treasury bonds, and Morgan Stanley was saying buy the 10-year because its analysts are expecting 10-year yields to drop another 50 or 60 basis points. All of this stress could lead to a big pull away where the market just loses confidence. Historically, when the Fed and all these governments make a mistake, people decide it is a good time to own some gold.

TGR: How about some last words of advice for investors looking to make the most of their portfolios in 2016?

Ralph Aldis: Investing is a discipline. I always stress the importance of an asset allocation plan and rebalancing that plan regularly. Gold is always an important part of that asset allocation mix, which so many investors just don't consider. Even brokers don't always know what's going to happen, so a good balanced asset allocation plan tethered to where you are in life is the key to building wealth.

TGR: Thank you for your time, Ralph.

  • Reddit logo
  • Facebook logo
  • Twitter logo
  • Google logo
  • Yahoo logo
  • LinkedIn logo
  • Digg logo
  • StumbleUpon logo
  • Technorati logo

The Gold Report is a unique, free site featuring summaries of articles from major publications, specific recommendations from top worldwide analysts and portfolio managers covering gold stocks, and a directory, with samples, of precious metals newsletters. 

See the full archive of Gold Report articles.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

Mobile apps

 - live trading 24/7

 - buy & sell instantly

 - up-to-the-second charts

 

 

 

Daily news email
Go to 'communications settings' 

Get the latest daily gold price news free by email

Latest gold news by email

 

 

 

Gold Investor Index
2 March 2021

Silver Investor Index

Silver beats gold again

 

 

 

LBMA webinar
21 January 2021

LBMA

London gold trading

 

 

 

Bloomberg TV
1 February 2021

Bloomberg TV

r/silver-surge

 

 

 

ET Now
3 March 2021

Gold drop

Gold's big drop

 

 

 

  •  Email us

Market Fundamentals

  • Central-Bank Gold Buying 'Moderate' But 'Highly Symbolic' in 2021
  • Green Energy: Platinum Key to New 'Hydrogen Catapult'
  • 2021 Gold Price to Rise 11.5%: LBMA Forecast
More...
  • Cost calculator
  • Cookies
  • Terms & conditions

©BullionVault Ltd 2005-

  • Twitter
  • Facebook
  • LinkedIn
  • YouTube

Save your cookie preferences

We use cookies to remember your site preferences, record your referrer and improve the performance of our site. For more information, see our cookie policy.

Please select an option below and 'Save' your preferences.

Save

You can update your cookie preferences at any time from the 'Cookies' link in the footer.

Secure auto-logout warning

You have not been active for some time.

For your security you will be logged out in   minutes unless you take action.