After plummeting last year in an extreme once-in-a-lifetime orgy of selling, GLD’s holdings have remained stable all throughout 2014.
That’s despite the fierce headwinds of the levitating stock markets continuing to howl, and the recent gold sentiment wasteland of the summer doldrums. GLD holdings' resiliency is very bullish.
As these lofty stock markets inevitably sell off, stock traders will return to GLD. Their necessary GLD-share buying to re-diversify unbalanced stock portfolios will add big marginal gold investment demand.
Global gold production has reached record highs in recent years, but NBF analysts predict a "production cliff" - too few large deposits discovered to sustain current production rates - ahead in which senior gold miners will begin to undergo a sharp production decline. In such an environment, M&A involving projects with low capital intensity, favorable logistics and strong returns should be a key driver.
Stillwater Mining (SWC) agrees to buy Peregrine Metals (PTTDF.PK) for $487.1M in cash and stock. The transaction gives Stillwater access to the undeveloped Altar open mine in Argentina, which has 7.4B pounds of indicated copper resources and 1.5M ounces of indicated gold.