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The Gold Price Outlook: What Investors Need to Know (Continued from Prior Part) Second-highest gold purchases on record
The World Gold Council (or WGC) reported that central banks continued building their gold reserves. They were net buyers for the nineteenth consecutive quarter. For the latest quarter (3Q15), their purchases almost equaled the 3Q14 record of 179.5 tons. Over the first nine months of 2015, net purchases total 425.8 tons.
China and Russia building gold positions
After reporting its official gold reserves after a gap of six years at 1,658 tons, China has started reported its holdings monthly. Between July and September, it has bought an additional 50.1 tons. Many market participants believe that China’s reserves could be a lot higher than what it actually reports.
The Central Bank of Russia increased its gold reserves by almost 18.7 metric tons in October. The year-to-date figure stands at 165 tons. The highest rise in gold reserves in Russia was in 2010, when the amount was 176 metric tons. If the demand for reserves stays on the rise this year, it could break the country’s 2010 record.
What does this mean for gold prices?
The continuous increase of gold reserves for central bankers seems to be a good omen for gold prices. Given the current geopolitical turmoil, countries—especially China and Russia—are expected to keep adding to their gold reserves. What’s interesting to note is that these two countries’ gold reserves as a proportion of their total reserves are still far below that of developed countries such as the United States, France, and Italy. This could lead to an upside to gold purchases for these countries in addition to new demand from other countries as economic and political outlooks remain uncertain.
This, in turn, could be positive for the medium-to-long-term outlook for gold prices (GLD) (IAU) as well as gold miners, such as New Gold (NGD), Barrick Gold (ABX), and Royal Gold (RGLD). These three stocks make up ~13.3% of GDX.
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New Gold Inc.
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PRODUCER |
CODE : NGD |
ISIN : CA6445351068 |
CUSIP : 644535106 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
New Gold is a gold producing company based in Canada. New Gold produces gold, copper, lead, silver and zinc in Australia and in Mexico, develops copper, gold and silver in Brazil, in Canada and in Chile, and holds various exploration projects in Canada. Its main assets in production are PEAK MINES in Australia and CERRO SAN PEDRO, MESQUITE and CERRO SAN PEDRO in Mexico, its main assets in development are AMAPARI in Brazil, NEW AFTON in Canada and EL MORRO in Chile and its main exploration properties are AJAX - PYTHON, BUCK CLAIMS, 3TS, SIZZLER, CC PROPERTY, VO PROPERTY, TAK PROPERTY, MOUSE MOUNTAIN, G-SOUTH, CHUBBY BEAR, LIBERTY BELL, BOULEVARD, BOUVETTE, WIT YUKON, RAM, SLATE FALLS, PROSPECTOR MOUNTAIN, MAYO, DAVIDSON, BLACKWATER, BOULDER CREEK, CAPOOSE, NATIONAL, CORRAL CANYON and RUDE CREEK in Canada and RIO FIGUEROA in Chile. New Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is US$ 1.0 billions as of today (€ 973.2 millions). Its stock quote reached its highest recent level on January 07, 2011 at US$ 9.99, and its lowest recent point on March 20, 2020 at US$ 0.39. New Gold has 575 460 032 shares outstanding. |