With a positive gold outlook are gold miners attractive?
Head of Equity Strategy
Summary: History shows that gold miners have not been able to deliver a value add relative gold spot underperforming significantly since early 2004. A long period of steady higher prices led to high operating costs which have made it difficult for gold miners to regain their profitability after 2013. In addition the new focus on ESG has caused the valuation spread to global equities to decline adding additional pressure.
Our view on gold has been positive for years as monetary policy has been more and more desperate in terms of easing maybe except for the Fed’s policy. But with the Fed now joining other central banks in expanding its balance sheet and moving the policy rate close to zero with market expectations even looking at negative rates our view on gold has improved even further. We expect gold to reach a new all-time high this year as investors demand a safe-haven from debasement of the world’s largest currencies. A positive gold outlook begs the question of how to get exposure to gold.