Helicopter money pulls up gold
Hong Kong is not at the centre of the corona virus epidemic. But the city-state attached to China is suffering because of its strong ties to the mainland and because the economy is already suffering because of the previous citizen protests. The government is now responding. Each citizen aged 18 and over receives a one-off payment of 10,000 Hong Kong dollars.
Such an action is commonly referred to as helicopter money. It's as if cash is simply dropped from the air. In economics, the monetarists assume that the money supply is the adjusting screw for the economy. In their case, the expansion of the money supply increases national income, but only if price stability prevails and the velocity of money circulation does not decrease. But the latter is precisely the case at present. Because in the Hong Kong example, people don't go shopping as much anymore. Expenditure is likely to be lower, but Internet trade will be higher.
But sooner or later it will lead to inflationary tendencies. This in turn would spur the search for value-conserving investments. Gold would thus probably be in ever greater demand. The gold price and, in the medium term, the shares of companies with gold projects would benefit.
Maple Gold Mines, Fiore Gold and RNC Minerals, for example, have particularly high-value projects in prime locations.
Maple Gold Mines owns the Douay Gold Project in the Abitibi Greenstone Belt of Quebec: https://www.commodity-tv.com/play/newsflash-with-goldmining-and-maple-gold-mines/. Drilling is ongoing on the approximately 355 square kilometre property. Infrastructure, gold resources and conditions are excellent.
RNC Minerals is operating in Western Australia: https://www.commodity-tv.com/play/rnc-minerals-increasing-gold-production-up-to-110k000-oz-in-2020/. Two producing gold projects (Beta Hunt and Higginsville) and a nickel-cobalt project in Quebec are included in the portfolio. Recent drilling at Higginsville has returned up to 650 grams of gold per tonne of rock.
Fiore Gold already produces at its Pan open-pit mine in White Pine, County, Nevada: https://www.commodity-tv.com/play/fiore-gold-small-gold-producer-in-nevada-with-growth-plans/. Gold production of around 150,000 ounces per year is planned. At the same time, the company plans to advance the exploration and development of the nearby Gold Rock project.
Recent corporate news and press releases from Maple Gold Mines (https://www.resource-capital.ch/en/companies/maple-gold-mines-ltd/) and RNC Minerals (https://www.resource-capital.ch/en/companies/rnc-minerals-corp/) and Fiore Gold (https://www.resource-capital.ch/en/companies/fiore-gold-ltd/).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
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