Palladium prices have seen an 80 percent increase in the last seven months. As a main component in catalytic converters to help decrease the amount of harmful emissions released from gas engines, supply has not kept up with demand.

The quick rise of palladium prices has caught the attention of criminals. Around the UK and in the US gangs have set up sophisticated catalytic converter thefts, hitting multiple cars within minutes to sell on the black market.

Analysts see a bubble forming similar to the one that burst spectacularly in 2000. If their predictions are eminent, now would be the time to sell before prices adjust to a lower level….Just sell it legally.

A deal would create a company valued at around $42 billion

By Alistair MacDonald and Jacquie McNish

Updated Feb. 25, 2019 7:03 p.m. ET

Barrick Gold Corp. offered $17.85 billion for Newmont Mining Corp., proposing an unsolicited, all-share deal that would combine the world’s biggest gold miners and create an industry giant that Barrick said will be better able to squeeze out costs.

Read more via: https://www.wsj.com/articles/mining-giant-barrick-gold-makes-hostile-bid-for-rival-newmont-11551094670

By David Hodari Feb. 10, 2019 8:00 a.m. ET

Soaring palladium prices are inspiring an unusual band of criminals: catalytic converter thieves.

The exhaust-control devices common in most cars contain the silvery white precious metal, whose prices have climbed more than 50% since mid-August. Palladium is now more expensive than gold.

A supply squeeze, stricter environmental standards and the increased demand for cleaner-burning gasoline engines—which require converters with more palladium—means demand for the metal both among auto makers and thieves is likely to remain high.

Police in Chicago say perpetrators, who harvest the devices and sell the scrap metal, have converter theft down to a fine art.

“What tends to happen is that in the middle of the night, a group of guys come by with a truck and a reciprocating saw. They cut out the converter, throw it in the truck and drive away,” said Howard Ludwig, public information officer at the Chicago Police Department.

“They’ll tend to hit several blocks in the same evening with at least one guy driving the [getaway] vehicle and one underneath the car.”

Continue reading via: https://www.wsj.com/articles/thieves-mine-catalytic-converters-for-metal-more-valuable-than-gold-11549803601

01/15/19 02:47 AM EST

$10 billion deal for Goldcorp intensifies consolidation wave as gold supply dwindles

By Alistair MacDonald and Jacquie McNish 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 15, 2019).

Newmont Mining Corp. agreed to buy rival Canadian gold producer Goldcorp Inc. in a $10 billion, all-stock deal, creating the world’s largest gold miner.

The deal intensifies a consolidation wave triggered in part by languishing prices and dwindling supplies of easy-to-find gold, and comes on the heels of another gold-mining blockbuster: Barrick Gold Corp.’s agreement in September to buy Randgold Resources for $6 billion in an all-share merger.

If Newmont consummates the Goldcorp deal, the new company, set to be based in Denver, will surpass Toronto-headquartered Barrick — its longtime rival — in production, a key industry metric. Newmont and Barrick have circled each other for years and had toyed with a combination of their own in 2014.

Newmont, the U.S.’s largest miner measured by market capitalization, said it would acquire each Goldcorp share for 0.328 of its own stock. That represents a 17% premium to the Canadian company’s 20-day volume weighted average share prices.

The depletion of high-grade global gold reserves, and the resulting increase in extraction costs, has pushed miners to seek cost efficiencies and to buy other companies’ to land their reserves.

Such moves have become more pressing because exploration for new reserves has slowed dramatically after gold prices fell following a boom that peaked in 2001.

Newmont and Goldcorp, though, said they have continued to invest in exploration as others have cut back.

“We are not having to scramble for growth. We have it inherent in our existing business,” David Garofalo, Goldcorp’s chief executive, said in an interview. The new company will be headed by Gary Goldberg, the CEO of Newmont, until he retires around the fourth quarter of 2019.

Goldcorp’s share price rose 7.12% Monday, while Newmont’s closed nearly 9% lower.

Newmont said the combined company’s assets will be mostly based in the Americas, with 75% of its resources there. Another 15% will be based in Australia, with 10% in Ghana. That is in contrast to Barrick, which bet big on more politically risky African assets in its deal with Randgold.

In recent years big miners of other metals have gravitated toward deposits in more stable territories. The Goldcorp assets are in better locations, said John Meyer, an analyst at SP Angel in London.

As part of its combination plan, Newmont said it would sell $1 billion to $1.5 billion in assets over the next two years, with the aim of eventually producing a “sustainable, steady-state level” of six to seven million troy ounces of gold a year, after those divestitures.

Newmont and Goldcorp produced a combined 7.9 million troy ounces in 2017, the most recent annual figures available. That production — at least for now — would cause the combined company to leapfrog past Barrick, which has struggled with declining output.

Barrick was the undisputed king of gold production until recently, but its output has fallen more than 25% since 2013, to 5.3 million troy ounces at the end of 2017 — about the same as Newmont. Its acquisition of Randgold added about 1.3 million troy ounces as of the end of 2017.

Newmont traces its roots to 1916. It was founded by William Boyce Thompson, who grew up in Montana but earned his wealth in New York. Goldcorp dates to just 1994.

Gold companies have long signaled a need to consolidate. Apart from giants like Newmont and Barrick, the sector is filled with many smaller miners, all fighting over investors’ dollars.

Gold prices, meanwhile, have languished. They are down about 30% from their 2011 peak. In recent years, they have traded flat, capped in particular by rising U.S. interest rates.

In times of slow but steadily rising rates — like today — many see the yellow metal less favorably, stacked up against ultrasafe securities, like U.S. Treasurys, whose yields are rising.

Miners have also had to contend recently with the depletion of easy-to-reach high-grade gold deposits in stable jurisdictions.

The struggle for fresh reserves is more challenging for gold producers than miners of some other, more plentiful metals. Gold is present in the Earth’s crust in much smaller quantities than many of the most commonly mined materials. All the gold ever mined from the earth could fit in a 60-foot cube.

Discoveries have tapered off. Just 215.5 million troy ounces of gold has been found in 41 discoveries in the 10 years to 2017, compared with 1,726 million troy ounces in 222 discoveries in the preceding 18 years, according to S&P Global Market Intelligence. There were no discoveries made in 2017, according to S&P.

“Newmont was one of the few companies to focus on exploration during the last downturn,” said Mr. Goldberg, adding that the new company has 31 exploration sites.

Even in Nevada, where around three quarters of all U.S. gold production is based, discoveries have fallen swiftly. Nevada produced 5.6 million troy ounces of gold in 2017, well below the 1998 peak of 8.9 million troy ounces, according to John Muntean, an associate professor of mines and geology at the University of Nevada.

Goldcorp has been looking for a partner for at least several years, and had held talks with Australia’s Newcrest Mining Ltd. among others, according to people familiar with those discussions.

Mr. Garofalo declined to comment and Newcrest couldn’t be reached for comment.

Once a darling of the gold sector, Goldcorp’s share price has fallen around 75% from its 2011 peak.

Goldcorp’s poor performance has attracted more than one suitor in recent years. Barrick made takeover overtures about three years ago but was rebuffed, one person familiar with the matter said.

“Long-term Goldcorp investors may be disappointed, even with the 17% premium offered, as the company’s long promised (and long delayed) recovery was supposed to begin this year,” JPMorgan said in a research note.

Newmont, meanwhile, was close to merging with Barrick in 2014, during a period when gold prices were plummeting. That deal fell apart due to tensions between the two companies about their combined vision.

The recent mega-mergers could trigger additional deals as investors pressure gold miners to boost returns as they push into higher-risk regions to develop and operate new mines.

“There are too many players in an industry with shrinking opportunities, ” said Sean Boyd, CEO of Toronto-based Agnico Eagle Mines Ltd.

Write to Alistair MacDonald at alistair.macdonald@wsj.com and Jacquie McNish at Jacquie.McNish@wsj.com

(END) Dow Jones Newswires

January 15, 2019 02:47 ET (07:47 GMT) Copyright (c) 2019 Dow Jones & Company, Inc.

Gold prices fell on Friday, pulling back from a more than six-month peak hit earlier in the session, after stronger-than-expected U.S. jobs data, while palladium prices punched through the key $1,300 level for the first time.

Spot gold slipped 0.78 percent to $1,283.56 per ounce as of 2:00 p.m. ET, after dropping as much as 1.3 percent to $1,276.40.

The metal was however on track for a third straight weekly gain, up about 0.2 percent so far, mainly helped by recent strong gains. It touched its highest level since mid-June at $1,298.42 earlier in the day.

U.S. gold futures settled down $9.00 to $1,285.80 per ounce.

“Industrial commodities and currencies have rebounded therefore the precious metals which have been the safe haven such as gold, silver have retraced today,” said David Meger, director of metals trading at High Ridge Futures.

“That is exacerbated by a stronger-than-expected payrolls data.”

read more via: https://www.cnbc.com/2019/01/04/gold-markets-global-economy-stock-markets-in-focus.html

Gold jumped from near a two-week low on Wednesday after U.S. Federal Reserve Chair Jerome Powell said interest rates were “just below” neutral, soothing investor worries over the pace of rate hikes.

U.S. gold futures settled up $10.20, or 0.8 percent, at $1,223.60.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell told the Economic Club of New York.

Spot gold was up 0.7 percent at $1,222.45 per ounce after rising as much as 1 percent to $1,226.24.

“Assuming a hike next month and that 3% is the rate level the Fed wants to get to, then yes they are ‘just below’ where they want to be, at the modeled out ‘neutral rate’,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. “I think today’s comments take off the table for now the possibility of them wanting to get above the so called 3% neutral rate (assuming that’s what they think it is).”

Traders believed Powell was signaling there would be fewer rate hikes in 2019, which would theoretically boost the value of gold because it is seen as a hedge against inflation.

The dollar index rose to its highest since Nov 13. The currency has risen for previous three sessions, taking it near its year high of 97.69.

The dollar gained momentum after Fed Vice Chair Richard Clarida on Tuesday backed further interest rate hikes, weighing on non-interest bearing bullion.

“The buzz word (in Powell’s speech) seems to be we are ‘just below’ neutral status regarding rate increases,” said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.

“So, with a December rate hike and one or two more in 2019 that should be enough to put the Fed where they want to be.”

Higher U.S. interest rates tend to boost the dollar, making gold more expensive for holders of other currencies. Higher rates also increase the opportunity cost of holding gold, which does not pay interest.

Investors will watch for the minutes from the Fed’s Nov. 7-8 meeting, due on Thursday, for clues to policy in 2019. The Fed has raised rates three times this year.

Later this week, U.S. President Donald Trump is likely to meet his Chinese counterpart on the sidelines of the G20 meeting to discuss trade. Bullion has largely lost out to the dollar as a safe haven asset this year as the U.S.-China trade war unfolded while U.S. interest rates rose.

“The market remains very tight. … Potential growth for supply is very limited and demand remains robust even though we’ve seen a decline in auto sales in China and a slowdown in car sales in the U.S.,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Read more via: https://www.cnbc.com/2018/11/28/gold-markets-the-fed-dollar-in-focus.html