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CTV News
2 days ago
- Business
- CTV News
Gold prices to grow further against a weak U.S. dollar, diversification of assets: analyst
As the price of gold rallied significantly this year, an analyst predicts the precious metal will grow even further as the U.S. dollar weakens on the global market. John Zechner, chairman of J. Zechner Associates says central banks in China, India and Japan are diversifying assets away from U.S. reserve holdings towards the rich commodity, which will likely contribute to continued price growth. He says countries have been turning away from the commodity because of global trade tensions and geopolitical risks from U.S. President Donald Trump's tariffs war. 'It has now surpassed the Euro as the second biggest holding, next to the U.S. dollar,' Zechner told BNN Bloomberg in a Thursday interview. 'Given what's going on the U.S., I can only see that going further.' The price of gold floated around US$3,330 due to the de-escalation of the Israel and Iran conflict. Meanwhile, the U.S. dollar plummeted to a three-year low as expectations from the Federal Reserve eased amidst speculation that Trump may nominate a new chief who is more likely to cut interest rates , according to Reuters. Lower interest rates tend to depress a currency. Investors have flocked to gold in recent months viewing the commodity as a safe haven, according to a commodity strategist with TD Securities. 'I think these central banks are massive buyers,' said Zechner. 'That will continue. They have to diversify their currency holdings, probably out of fiat currencies in general.'Zechner does, however, say countries might consider adopting cryptocurrencies.' I have yet to see a major central bank, or even a mid-level central bank, start to embrace Bitcoin or cryptocurrencies in general,' said Zechner. 'In the meantime, they can buy gold. I think they will continue to do it.' Torex Gold Resources (TXG TSX) Zechner favours Torex Gold Resources, a Canadian intermediate gold producer engaged in mining, developing and exploring in Mexico. The company has been extracting the commodity at a 29,000-hectare property. The company's stock is hovering around $42, up 109.8 per cent from last year. He said the company has made strategic moves operating undergrounds mines El Limon and Media Luna extending their reserves and improving their financial position. 'We've held it for a while now,' said Zechner. 'They started to do really well in the past year in the big Morales property in Mexico. They had the largest single mine there, and the El Limon mine. The problem was, it got a low valuation, because they're running out of the existing open pit. It's running down. They're going to have to sort of roll it off. People were not paying much for future growth but on that same property to the south of it, they had a property called Media Luna. They've been able to bring the Media Luna online to replace this almost seamlessly in the past year, right on budget and right on time. It is almost unheard of. At the same time, you've gone underground at a El Limon as well as Media Luna. That's going to extend the reserves a little bit further.' Reyna Silver, an exploration and development company focused on exploring high-grade, district-scale silver deposits in Mexico and the United States recently announced acquisition by Torex Gold and Concurrent Financing.
Hamilton Spectator
12-06-2025
- Business
- Hamilton Spectator
S&P/TSX composite index closes up as gold rises, U.S. markets also higher
TORONTO - Canada's main stock index pushed to another record close on Thursday, helped by a rise in the price of gold, while U.S. markets also closed higher after mixed trading earlier in the day. The S&P/TSX composite index closed up 91.59 points at 26,615.75 in broad gains that included telecoms, financials and health care, while tech and base metal stocks were down. The market has been on a fairly steady climb since early April when U.S. tariff plans rattled markets globally and helped send gold prices soaring, which in turn has helped the TSX, said John Zechner, chairman and lead equity manager at J. Zechner Associates. 'I think people lose sight of the fact how important the gold stocks are in our index now,' he said, noting the sector makes up about 13 per cent of the index. Other sectors like financials and energy haven't been performing that well but gold stocks have benefited from the price of the metal climbing from around US$2,600 an ounce at the start of the year to over US$3,300 in recent weeks. 'It's really those gold stocks that carry the day.' Gold rose again Thursday, with the August contract up US$58.70 at US$3,402.40 an ounce, a day after lower-than-expected inflation data out of the U.S. pushed down the U.S. dollar because there was less need for the Federal Reserve to raise interest rates. 'It's playing that correlation perfectly,' said Zechner. 'The trade-weighted U.S. dollar is getting hit hard today, and gold just, you know, surged on that again.' The rise helped push Barrick Mining Corp. up nearly three per cent, Lundin Gold Inc. up 6.4 per cent and Kinross Gold Corp. up 1.4 per cent. Equinox Gold was, however, down 5.7 per cent after raising its cost guidance and notifying of slower-than-planned production at its Greenstone gold mine in Ontario. New York markets had been mixed earlier in the day but closed higher. The Dow Jones industrial average closed up 101.85 points at 42,967.62. The S&P 500 index was up 23.02 points at 6,045.26, while the Nasdaq composite was up 46.61 points at 19,662.48. Updates on trade talks, which have helped drive market sentiment in recent weeks, were more scant Thursday. Investors will be looking to the G7 meeting in Alberta early next week for any signs of progress, said Zechner. 'They're not doing a communique or anything like that, it's just, you know, how much will Trump stir up relative to the other guys, and what will come out of that.' The Canadian dollar also benefited from a weakening U.S. currency, trading for 73.46 cents US compared with 73.18 cents US on Wednesday. The July crude oil contract was down 11 cents US at US$68.04 per barrel and the July natural gas contract was down two cents US at US$3.49 per mmBTU. The July copper contract was up three cents US at US$4.84 a pound. This report by The Canadian Press was first published June 12, 2025. Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
