Our favourite precious metal made headlines around the world in 2019, and we wanted to curate the most intriguing, important and offbeat stories about gold to make sure you’re all caught up heading into 2020.
Below is the top news on gold that you need to know about, whether you’re in the sector or a fan of gold jewellery and collectibles.
Break on through to the other side
It’s been a fantastic year for gold. The precious metal broke through the US$1,500 per ounce barrier in August for the first time in six years before resting at just below that threshold. That instigated a run on gold mining equities that was bolstered by a string of major mergers (more on that below).
As Gold.to wrote in 2019, the cause for this bump in the price of gold could be attribute to the uncertainty over US-China trade talk. U.S. President Donald Trump had threatened to hike duties on $250 billion in Chinese goods to 30% from 25% and boost tariffs on another $300 billion in products to 15% from 10%, in response to Chinese retaliation.
Another factor is movement by the U.S. Federal Reserve. The central bank cut its target rate by 25 basis points in July 2019. As we wrote, activity in the U.S. bond market suggests traders are anticipating more reductions in the coming months and through 2020.
Some economic insiders saw the bump in the gold price coming, such as Goldman Sachs. In a report published in November 2018, Goldman Sachs wrote that commodities could climb 17% in the coming months and may escape a 2015-style price collapse.
State of Canadian gold mining
In 2019, $31.8-billion CAN worth of gold-mining deals rocketed from coast to coast for the Canadian gold industry, according to data from Refinitiv, as reported by the Globe & Mail. Major deals included Newmont Gold Corp.’s US$10-billion purchase of Goldcorp, Kirkland Lake Gold’s $4.9-billion bid for Detour Gold Corp. and China’s Zijin Mining Group Co. Ltd.’s planned acquisition of Canada’s Continental Gold Inc. for $1.4-billion.
What’s driving this gold rush for mergers and acquisitions? Several factors are at play, the Globe reports, such as the hunger for companies to replace reserves, cut costs, increase production and attract more interest from institutional investors. “The move toward lower-cost exchange-traded funds (ETFs) has pushed more money toward larger-cap companies that have membership in stock market indexes – and that, in turn, is giving larger miners an advantage on the cost of capital over smaller ones,” the Globe adds.
Also in Canadian gold news, in December 2019, Barrick Gold Corp. sold its Massawa gold project in Senegal for up to US$430-million to West African junior producer Teranga Gold Corp., as part of its push to get rid of assets that don’t move the financial needle.
The China and Russian influence
Around the world, gold continues to turn the heads of many investors and buyers. As reported by Kitco News, two of the biggest gold purchasers this year snagged a total of 251 tonnes of the yellow metal combined.
In March, Bloomberg News wrote on how Russia is making speedy progress in its effort to diversify away from American assets. “Analysts, who have coined the term de-dollarization, speculate about the global economic impacts if more countries adopt a similar philosophy and what it could mean for the dollar’s desirability compared with other assets, such as gold or the Chinese yuan… Some say Russia will import more gold to guard against geopolitical shocks and the threat of tougher U.S. sanctions as relations between the two powers continue to deteriorate. Gold buying last year exceeded mine supply for the first time.”
As for the Far East, China is likely buying gold to diversify its holdings away from the US dollar and hedge against harm from the trade war, Business Insider wrote. As many gold aficionados recognize, gold serves as a safe-haven investment, and its price often rises when markets and other currencies see increased volatility or prolonged weakness.
There may come a time, though, when someone may want to sell their sentimental gold jewellery and collectibles. But that’s for another blog post.
Globally, central banks around the world added nearly 500 tonnes of gold to their reserves between January and August, marking 2019 as a record year for central bank gold buying, the report added.
The biggest buyers aside from China and Russia this year have been Turkey, Poland, and Kazakhstan. As for the reason behind the increased gold purchases, Kitco cites safety, liquidity, and return.
A golden ETF
It was a banner year, if not a remarkable decade, for one of the best-known exchange-traded fund in the gold factor. SPDR Gold Shares, also known by its ticker GLD, has attracted some $5.5 billion US in assets year to date. Turning 15 years old in 2019, the fund is up about 210% since it began versus the S&P 50’s 164% gain over the same time frame, and has amassed over $42.28 billion in assets since the public debut, according to November 2019 media reports.
GLD isn’t the only ETF in town focusing on gold. Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, told reporters he found it encouraging that the GLD is still attracting billions in assets despite its competitors’ less costly offerings.
“What’s … impressive about how well GLD is doing from a flows perspective this year is it now has much cheaper competition,” he said. “A whole host of products in the last three years have come to market that are from GraniteShares [and] a whole host of other providers that are cheaper, and yet GLD is a default product.”
Wild gold news
2019 gave us a slew of jaw-dropping gold news that ranged from impressive discoveries to unusual gold jewellery outfits.
In May 2019, a very rare 200-year-old gold sovereign was sold by the UK Royal Mint for £100,000. The Royal Mint says the George III sovereign was one of 3,574 to be struck in 1819 and there are around only 10 left in the world.
Nicola Howell, director of consumer business at the Royal Mint, told BBC News the coin was an “incredible opportunity for those who want to own a piece of history.”
Staying in the UK, a gold expert claims to have found the UK’s largest gold nugget in a Scottish river. The lump of pure gold, which weighs 121.3g (4.2 oz), came from a mystery location in May 2019.
The two pieces form a doughnut shape and could be worth £80,000. The previous largest find, in 2016, was the 85.7g (3oz) Douglas Nugget.
In Greece, two large tombs were discovered and excavated at the site of the ancient city of Pylos, and archaeologists said that they had recovered thousands of pieces of gold foil, remnants of the sheets of gold that once lined the tomb floors and would have lent a spectacular gleam to the darkened chamber, the New York Times reports.
“Archaeologists also found beads made of amber, carnelian and malachite, and a golden pendant depicting the head of the Egyptian goddess Hathor. These items suggest that Pylos, a city with a fine port, had trading connections, previously unknown, with Egypt and the Near East around 1500 B.C.E., the time the tombs were in use,” The Times went on to say.
In Israel, archaeologists discovered a trove of seven gold coins dating back to 1,200 years ago, the Israel Antiquities Authority (IAA) reported. The coins, from the early Islamic period, were found in a broken clay juglet during excavations in the city of Yavne in central Israel.
According to archaeologists, “these gold dinars were issued by the Aghlabid dynasty that ruled in North Africa, in the region of modern Tunisia, on behalf of the Abbasid Caliphate centered in Baghdad,” as reported by the media.
Turning to Russia, particularly the Krasnodar Krai province in Southern Russia, archaeologists announced in November 2019 that they unearthed a slew of gold Byzantine coins dating back to the 10th century. The treasure was hidden in a ceramic pot found in the area of an ancient residential land abandoned since the 11th century. It includes 28 metal coins made of pure gold featuring the faces of Byzantine emperors.
Sometimes, you can find gold not under the earth but in a common household item.
A woman from Derbyshire in the UK surprised herself in February 2019 when she took a George II-style writing bureau she’d inherited from a distant cousin into Hansons Auctioneers for valuation. While checking the piece of furniture, valuer Edward Rycroft discovered a tiny secret drawer the woman had no idea existed.
On closer inspection, the drawer contained a rare Raymond IV Prince of Orange Franc, a “pied” (very thick) 22-carat gold coin dating from 1365. The coin went on to sell for $1,025 US, attracting almost four times more than the bureau in which it was found.
You never know what the value of your gold may be when you discover it in the unlikeliest of places, or if you have gold jewellery or antiques you would like appraised. Contact Gold.to anytime to have our precious-metal specialists analyze your gold and give you a transparent assessment of the value of your items.
If you rock gold chains and think that just a couple gold wearables weigh you down, you’ll be shocked to learn about an Indian guru who wears gold ornaments that weigh more than 16 kilos. Sudhir Makkar, known as “Golden Baba,” adorns himself with a collection of chains, lockets of deities, rings and bracelets. It isn’t stated how much all that gold is worth.
The science of gold
Scientific exploration of gold and how other materials relate to it continued to expand in 2019. One of the more fascinating news reports came from Australia’s national science agency, CSIRO. They found that thread-like fungi can attach gold to their strands by “dissolving and precipitating particles from their surroundings, in a process that could offer clues for finding new gold deposits,” Phys.org writes.
“Fungi can oxidise tiny particles of gold and precipitate it on their strands – this cycling process may contribute to how gold and other elements are distributed around the Earth’s surface,” CSIRO lead author Dr. Tsing Bohu said.
“Fungi are well-known for playing an essential role in the degradation and recycling of organic material, such as leaves and bark, as well as for the cycling of other metals, including aluminum, iron, manganese and calcium.”
Also worth noting is that researchers remarked on the potential to use fungi as a bioremediation tool to recover gold from waste.
The geology community was thrilled with another discovery: analyzing what’s been dubbed Ram’s Horn gold, which is a ropey branch of gold that split into three curling tendrils. Standing just over 4.7 inches tall and weighing roughly half a pound, the yellow curlicues of this precious metal represent the rarest form of gold ever found, as National Geographic writes, and only now are scientists parsing through the material to learn more about it.
The results of those studies could have wide-ranging implications, from contributing to more efficient mining techniques to finding new uses for gold in metal-dependent technologies, the article states.
“For wire gold, the researchers also looked for the absorbed neutrons, which revealed another surprise: both samples are actually gold alloys that include up to 30 percent silver. Additional work at LANL with powerful x-rays—over a hundred times more energetic than those used in medical scans—confirmed that the density, and thus the composition, is similar throughout each sample.”
Throughout the year, Gold.to published helpful blogs to better understand the gold jewellery and gold-reselling market, so feel free to look over our posts on everything from understanding the Canadian gold price to various types of gold jewellery to tracking the many uses of gold.
If you have questions about your own gold that you’d like appraised by our specialists, contact us anytime.