Gold’s rally is set to endure, with the U.S. presidential election seen as the next big catalyst for prices, according to a producer whose shares have almost doubled this year as financial-market turmoil, slowing growth and Britain’s vote for Brexit pumped up bullion.
“The overall trend is up,” Bill Beament, managing director at Northern Star Resources Ltd., said on a conference call on Wednesday after the Australian company reported record cash flow. The U.S. vote will have more of an impact on bullion than the U.K. referendum, according to Beament.
Gold has rallied 25 percent this year as investors boosted holdings, the Federal Reserve failed to add to last year’s rate rise and central banks in Europe and Japan embraced negative borrowing costs. The International Monetary Fund has scrapped its forecast for a pickup in global growth, citing Brexit. On Tuesday, Donald Trump was formally nominated as the Republican presidential candidate, and is set to face the Democrat’s Hillary Clinton on Nov. 8.
“It’s a longer-term trend heading upward because of what’s happening with the global economies around the world, it’s positive for gold,” said Beament. The Subiaco, Western Australia-based company operates five gold mines, according to its website, and sales in the 2016 financial year were 561,153 ounces, near the top of its guidance of 535,000 to 570,000 ounces.
Gold soared as much as 8.1 percent on June 24 after the Brexit vote to post the biggest intraday jump since 2008, helping prices cap the first back-to-back quarterly gain since 2014. Metal for immediate delivery was 0.4 percent lower at $1,327.20 an ounce on Wednesday, according to Bloomberg generic pricing.
DBS Group Holdings Ltd. and Bank of America Merrill Lynch have also listed the U.S. poll among factors that may lift gold toward $1,500. As political debate heats up in the U.S., support for gold will increase, Francisco Blanch, head of commodities research at Bank of America Merrill Lynch, said last week.
The resurgence in gold has boosted miners’ shares prices, with Northern Star’s stock up 92 percent so far this year. Rivals have gained too, with Melbourne-based miner St Barbara Ltd. more than doubling in 2016, while Newcrest Mining Ltd., Australia’s largest producer, is up 87 percent.
“It’s a very exciting time to be an Australian gold producer,” said Beament, citing the strong gold price in Australian dollars, which he said could potentially increase. “I am a huge gold bull.”
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