Environment for gold remains positive
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Real interest rates are negative at around minus one percent. And this will remain so for a long time, because as Fed Chairman Powell recently noted, the central bank is far from considering an exit from its monetary policy. Other central banks will also continue with super-loose monetary policy. Nor is it likely that when the economy recovers - once the Corona pandemic is under control - a central bank will overreact and raise interest rates.
To achieve higher inflation, further fiscal stimulus could be introduced. If the Corona vaccinations proceed quickly, confidence will grow again, and consumer prices could rise. In any case, negative real interest rates will support gold prices.
The precious metals sector, many industry insiders think, has entered a multi-year period of higher prices. This will provide for consolidation in the sector.
Many mergers and acquisitions in the gold sector have already taken place during the gold price rally from 2008 to 2012. And many gold producers are paying dividends today and can score with good quarterly results.
For example, Caledonia Mining or OceanaGold.
Caledonia Mining - https://www.youtube.com/watch?v=7fUXrXanpHw - achieved record production of almost 58,000 ounces of gold at the Blanket mine in Zimbabwe last year. In 2021, this figure is expected to reach 67,000 ounces of gold.
OceanaGold - https://www.youtube.com/watch?v=Pepo7cpjLvU - is a medium-sized producing company. The projects are located in New Zealand, the USA and the Philippines, gold and silver are the raw materials.
Current corporate information and press releases from Caledonia Mining (https://www.resource-capital.ch/en/companies/caledonia-mining-corp/) and OceanaGold (https://www.resource-capital.ch/en/companies/oceanagold-corp/).
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