The icing on the gold cake is the US Fed, which has now clearly indicated that
it hasn't abandoned the idea of rate cuts for 2019.
But in this perfect storm for gold prices, EuroSun Mining (TSE:ESM, OTCMKTS:CPNFF) CEO
Scott Moore says we're overlooking a significant trend that will outlast the
current geopolitical meltdown and even the Fed's policies: It's a global push
"Government's around the world are becoming increasingly wary of the
dollar's hegemony in international trade," says Moore. "And they're
doing their best to distance themselves from it by using their gold reserves to
buy more gold instead."
This process is already underway mainly in nations with strong anti-U.S.
sentiment including Russia, China, Iran, Venezuela, Syria, Turkey, Qatar,
India, Pakistan, Libya, Egypt and the Philippines among others.
Naturally, these countries are turning to gold since the yellow metal is not
under lock-and-key like the greenback and other electronic payment methods.
This trend is abundantly clear when you look at central banks' buying activity.
According to the World Gold Council, central banks purchased nearly 70 percent more gold
during the first quarter of the year than they did during the previous year's
That's the most they bought since the first quarter of 2013.
For EuroSun's Rovina Valley project in Romania--the
largest in-development gold mine in Europe--the de-dollarization drive will
been a boon for the 10 million ounces of gold equivalent they're hoping to get
out of the ground in the simple geography of Romania's prolific Tethyan Gold
There are plenty of billionaire fund managers who think today's ‘crazy' gold
prices are just getting started.
Not least among them is Paul Tudor Jones, who
says that gold "has everything going for it", and sees it pushing to
$1,700 an ounce "rather quickly", as he noted in an interview with
And this is all just thanks to near-term trends wrapped up in the Fed and wild
We're interested instead in the long-term trend that is says gold will be a
major winner of the global de-dollarization trend.
There's nothing like a sanctions frenzy to create a major uptick in momentum
Most notably, Russia and China have
pledged to accelerate their de-dollarization strategies because of Trump's
sanctions push. And they've reached a deal to use national currencies for
bilateral trade. No more U.S. dollar, then.
So, we're carefully watching what the central banks are doing.
The latest countries to jump on the de-dollarization bandwagon are Serbia and
the Philippines. Serbia is boosting its national gold reserves, increasing them
from 20 to 30 tons by the
end of this year. It's shooting for 50 tons by the end of 2020.
Tudor is watching these developments closely, and to him, it suggests an
"Remember we've had 75 years of expanding globalization and trade, and we
built the machine around the belief that's the way the world's going to be. Now
all of a sudden it's stopped, and we are reversing that," he told
"When you break something like that, the consequences won't be seen at
first, it might be seen one year, two years, three years later. That would make
one think that it's possible that we go into a recession. That would make one
think that rates in the US go back toward the zero bound and in the course of
that situation, gold is going to scream. "
EuroSun's (TSE:ESM, OTCMKTS:CPNFF) Moore
agrees: "What's happening with Iran right now will only further the
de-dollarization push. The dollar isn't necessarily king anymore, and gold is
more than ready to resume its rightful place on the safe haven throne."
Five gold companies to watch as more countries push for
Gold (NYSE:AUY) (TSE:YRI)
Yamana, has recently completed its Cerro Moro project in Argentina, giving its
investors something major to look out for. The company plans to ramp up its
gold production by 20% through 2019 and its silver production by a whopping
200%. Investors can expect a serious increase in free cash flow if precious
metal prices remain stable.
Recently, Yamana signed an agreement with Glencore and Goldcorp to develop and
operate another Argentinian project, the Agua Rica. Initial analysis suggests
the potential for a mine life in excess of 25 years at average annual
production of approximately 236,000 tonnes (520 million pounds) of
copper-equivalent metal, including the contributions of gold, molybdenum, and silver,
for the first 10 years of operation.
The agreement is a major step forward for the Agua Rica region, and all of the
miners working on it.
Gold Corp. (NYSE:EGO) (TSE:ELD)
This Canadian mid-cap miner has assets in Europe and Brazil and has managed to
cut cost per ounce significantly in recent years. Though its share price isn't
as high as it once was, Eldorado is well positioned to make significant
advancements in the near-term.
In 2018, Eldorado produced over 349,000 ounces of gold, well above its previous
expectations, and is set to boost production even further in 2019.
Additionally, Eldorado is planning increased cash flow and revenue growth this
Eldorado's President and CEO, George Burns, stated: "As a result of the
team's hard work in 2018, we are well positioned to grow annual gold production
to over 500,000 ounces in 2020. We expect this will allow us to generate
significant free cash flow and provide us with the opportunity to consider debt
retirement later this year. "
Gold Corp. (NYSE:GOLD) (TSE:ABX) and Goldcorp Inc. (NYSE:GG):
All eyes are on the billion-dollar partnership these two giants are forming in
Chile's gold belt. Goldcorp is putting up $1 billion to get in on this deal as
miners scramble for new sources of growth. This joint venture will see the two
giant miners operate three properties in Chile's Maricunga region, and these
will be major catalysts for both.
Newmont Mining Corp (NYSE:NEM) Founded over 100 years ago, Newmont Mining
Corporation (NYSE:NEM) is one of the leading mining companies in the world. The
company holds assets in Peru, Australia, Ghana, Indonesia, Mexico, and around
the United States. Primarily focusing on gold and copper, Newmont has steadily
carved out a name for itself among those in the industry. In Q1 2017 alone, the
company secured over 1.2M ounces of gold. Definitely noteworthy for investors.
Precious Metals Corp. (NYSE:WPM) (TSE:WPM)
Wheaton is a company with its hands in operations all around the world. As one
of the largest ‘streaming' companies on the planet, Wheaton has agreements with
19 operating mines and 9 projects still in development. Its unique business
model allows it to leverage price increases in the precious metals sector, as
well as provide a quality dividend yield for its investors.
Recently, Wheaton sealed a deal with Hudbay Minerals Inc. relating to its
Rosemont project. For an initial payment of $230 million, Wheaton is entited to
100 percent of payable gold and silver at a price of $450 per ounce and $3.90
per ounce respectively.
Randy Smallwood, Wheaton's President and Chief Executive Officer explained,
"With their most recent successful construction of the Constancia mine in
Peru, the Hudbay team has proven themselves to be strong and responsible mine
developers, and we are excited about the same team moving this project into
production. Rosemont is an ideal fit for Wheaton's portfolio of high-quality
assets, and when it is in production, should add well over fifty thousand gold
equivalent ounces to our already growing production profile."
Gold Inc. (OTCMKTS: CAGDF) (TSE:CG)
Centerra Gold is a Canada-based gold miner with flagship assets, the Mount
Milligan Mine and the Kumtor Mine which are located in Canada and the Kyrgyz Republic
respectively. It also owns the Öksüt Gold Mine in Turkey, making it the
single-largest North American gold company operating in Asia, with over 22
years of experience in the region.
Centerra's biggest selling points, however, are its strong balance sheets. For
2018, the company reported over $100 million in net earnings, generating over
$217 million from cash operations, exceeding many analyst's expectations.
Scott Perry, President and Chief Executive Officer of Centerra stated, "As
a result of the strong fourth quarter operating performance at both operations,
the Company exceeded its overall 2018 production and cost guidance producing
729,556 ounces of gold at an all-in sustaining cost on a by-product basis of
$754 per ounce sold, beating the low-end of our all-in-sustaining cost guidance
for the year.