Nopec stands for Gold-Hausse
Nopec could represent a turning point in the global oil market. A US law has been drafted under this term to make the cartel agreements in the Opec group, the oil-exporting states, punishable. The law hasn't been passed yet. Whether it even comes to that is still in the stars. Saudi Arabia is doing everything it can to prevent Nopec.
If it was a question of German car manufacturers or Chinese mobile phone producers, price and quantity agreements would immediately be subject to high penalties, and these would also be implemented - for the benefit of US citizens...or better for the benefit of the US state. This is not so easy with oil. Saudi Arabia has weight - and a joker in its hand: the US dollar. So far, the Kingdom has settled its oil trade with foreign countries in US dollars. Saudi Aramco, the state-owned oil company, exports oil for around 356 billion dollars a year. Therefore, historically, the bulk of oil trading is in dollars.
But now the Kingdom has declared that the Nopec Act, which would virtually dissolve the oil cartel (Opec), would come into effect if the oil bills were no longer issued in US dollars. That would be a severe blow to the status of the world's number one currency. In addition, Saudi Arabia would probably liquidate a large part of its investments in the USA, currently around one trillion US dollars in equivalent value, as well as at least parts of its assets held in US bonds, currently around 160 billion dollars.
So there could be a fall in the dollar in the case of Nopec. But even if the USA does not dare to oppose the oil power of Opec and thus Saudi Arabia, the dollar is suffering more and more damage. For it is becoming apparent worldwide how vulnerable the world's leading currency has become. A further and possibly stronger reallocation of currency reserves worldwide from the dollar to gold could, indeed should, be the consequence. This should benefit the gold price in the medium to long term. Which in turn should support the shares of companies with gold projects. Investors could rely on it as portfolio diversification. Examples are Caledonia Mining and Cardinal Resources.
Caledonia Mining - https://www.commodity-tv.net/c/search_adv/?v=298787 - owns the Blanket gold mine in Zimbabwe, produces highly profitably and pays dividends. Production is expected to increase to 80,000 ounces of gold per year by 2022.
Cardinal Resources - https://www.commodity-tv.net/c/search_adv/?v=298772 - is also active in Africa, but in Ghana. The Company does not yet produce but owns the prospective Bolgatanga and Subranum gold projects located in granite greenstone belts in northeastern and southwestern Ghana, respectively.
Current company information and press releases from Caledonia Mining (https://www.resource-capital.ch/en/companies/caledonia-mining-corp.html).
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