SWOT Analysis: A Closer Look at Gold Flows

Strengths
The best performing precious metal for the week was silver with a surge of 4.18 percent following the poor jobs report. As seen in the chart below, when comparing the S&P 500 Index and Newmont Mining, the only gold mining stock in that index, on free cash flow per share growth, Newmont has performed significantly better. Both quarter-over-quarter and year-over-year, the mining company beats the broader index on this factor. The August unemployment report came in soft on Friday, with payroll expansion of 151,000, reports Bank of America. Consumer confidence surprised to the upside, while the ISM manufacturing index slipped to 49.4. In addition, the Department of Labor reported that second quarter productivity fell by 0.6 percent (the longest streak of declines in more than 35 years). As BofAML notes, when faced with a choice of defending the inflation target or allowing a modest overshoot, the Fed will choose the latter, meaning negative real rates could persist ahead. The government in Burkino Faso wants to help mining companies that are already in operation in the nation to lengthen the lives of their mines, reports Bloomberg, and make it easier for new investors to get information about deposits. The supportive policies for wealth creation in the nation are strong. Not only are troops being deployed to secure the mines, but the government is also building seven solar power plants to help deal with an electricity shortage.

This post was published at GoldSeek on 6 September 2016.