Page 25 - pd281-Apr20-mag-web_Neat

In addition to its traditional offerings, The Perth Mint has a digital storage
platform, GoldPass trading app and a gold-backed token issued by InfiniGold,
which is listed on KuCoin cryptocurrency exchange

The Perth Mint’s value of gold, silver and
platinum holdings stored on behalf of
clients from around the world topped $5
billion for the first time this year

The Mint is owned by the WA Govern-
ment, which is why Hayes believes it is
one of the safest and most reliable de-
positories in the world.
The Mint refines 90% of Australia’s
gold mined, which equates to about 10%
of global production.
In 2019, the 325t of gold production
in Australia was the highest recorded
amount in a calendar year, according to
Surbiton Associates Pty Ltd.
Australian gold miners really took ad-
vantage of the gold price environment
Solid gold bridge between soaring share prices before landing with
last year to build big cash balances and

a thud in the past month.
John Hathaway, senior portfolio man-
ager at Sprott Asset Management USA
mine and markets Inc, suggested current market conditions
were similar to circumstances that oc-
curred during the GFC.
“Gold and precious metals mining
shares are casualties of panic selling
across all financial markets. The sce-
nario is similar to what happened in 2008
during the GFC. When the general sell-
ing exhausted itself in late 2008, gold
and mining shares delivered superior ab- ties and other derivative products proved pandemic and geopolitical uncertainty in
solute and relative performance for the to be unsound investments resulting in various parts of the world were reasons
following three years. We believe that great personal and sovereign debt. for gold price optimism.
this pattern is likely to repeat following Countries around the world resorted to “The coronavirus has changed the
this sell-off,” Hathaway said in a note on printing money to stimulate economies face of the world. Any hopes of budget
March 18. and create an inflationary environment surpluses across the OECD, any real
“While COVID-19 outbreak is grabbing to counter debt but history suggests the hope of responsible economic stimulus
the headlines, the far bigger story is the strategy backfired. creating sustainable growth and an in-
deflation of financial assets that it has “Most of the personal and sovereign crease in inflation so somehow we can
triggered and the resulting loss of invest- debt issues still remain,” Hayes said. inflate our way out of these problems or
ment confidence. Markets that had been “Over the last 10 years inflation has pay our way out of them has largely now
priced for perfection must now reckon edged its way down to where it is now disappeared,” Hayes said.
with a likely recession, soaring fiscal a relatively small number, interest rates “Economists are talking about 2020
deficits and the very real possibility of a have come way down. Interest rates fell as a year of negative or zero growth and
sustained bear market. during the GFC as central banks and that may well trail into 2021, depending
“Mining company valuations appear governments tried to stimulate econo- on how the coronavirus plays out. That is
extraordinarily cheap.... buying low is mies, but they have fallen further to be at overall positive for the gold industry and
never easy but now is the time to do it.” all-time lows. What that tells you is that there has to be a bias towards an upside
Hayes agrees that the coronavirus there is no immediate relief in sight on in the gold price.”
pandemic has caused similar market re- interest rates recovering any time soon.” – Mark Andrews
actions as the GFC. Hayes said unabated money printing,
At that time, mortgage-backed securi- the unpredictability of the coronavirus

aUSTRaLIa’S PaYDIRT aPRIL 2020 Page 25