Analysts are calling for the gold price to be weaker at the start of 2015 before gaining momentum after the Fed makes a decision about interest rates. Read on to find out what else market watchers see coming in the year ahead.

Gold Outlook 2015: Analysts Anticipate a Break from Turmoil
For our 2016 gold outlook, click here.
This time last year, the gold market was in a sorry state. Market participants were still reeling from the yellow metal’s fall from grace, and were hoping against hope that it would bounce back in 2014. Unfortunately, it’s fair to say that didn’t happen.
These past couple of months the yellow metal has been battered by the end of QE and a strong US dollar, and slipped past the key $1,200-per-ounce mark as October drew to a close. Though it’s managed to rise a little since then, gold hasn’t been able to keep its head above $1,200 for any meaningful period of time.
That said, 2014 wasn’t a total wash for gold. As the chart below shows, the precious metal actually fared fairly well until about September, and did particularly well in March, when it breached the $1,350 mark following Ukraine-related tension and concerns about the Chinese economy.
Image courtesy of Kitco.
And in fact some analysts are fairly comfortable with gold’s performance this past year. Speaking to Gold Investing News, Derek Macpherson of M Partners commented, “in 2014 one thing that we were looking for was the gold price to stabilize, and I think we saw that. It ended up trading in a fairly tight range over the course of the entire year.”
Similarly, Martin Murenbeeld, chief economist at Dundee Capital Markets, said that while he didn’t have a particularly bullish forecast for gold heading into the year, he also wasn’t overly disappointed by its performance. “In general, things went the way we thought,” he said.

Other key events

All that said, the gold price wasn’t the only thing market participants had an eye on in 2014. Here’s a brief overview of a number of events that rocked the gold sector this past year:

  • M&A: 2014 brought a couple of key mergers and acquisitions in the gold space. Midway through the year, Osisko Gold Royalties (TSX:OR) was created in the wake of a friendly takeover of Osisko Mining by Agnico Eagle Mines (TSX:AEM,NYSE:AEM) and Yamana Gold (TSX:YRI,NYSE:AUY), and just five months later, the newly formed company announced plans to acquire Virginia Mines (TSX:VGQ) and become the fourth-largest company in the royalties space. The deal is expected to close in January. 
  • Gold fix: When the London silver fix came to an end in August, there was much speculation that the London gold fix would be next. Ultimately, the LBMA decided to put ICE Benchmark Administration in charge of the fix. It will take over in the first quarter of 2015 and will put an electronic system in place.
  • Swiss gold referendum: The fourth quarter of 2014 brought lots of speculation about the Swiss gold referendum, which was held on November 30. Though there was some hope that a positive vote on the referendum would spur an increase in the gold price, ultimately the movement was voted down, and gold hit a three-week low.
  • End of Indian import restrictions: Also in November, India surprised gold market participants by removing its so-called 80:20 gold import rule. Introduced in 2013, its aim was to curb Indian gold imports, and it required traders to export 20 percent of all gold imported into the country. As yet it seems unclear what impact its removal may have on the market — analysts cautioned initially that its effect could be muted.
  • Shift from precious metals: Overall 2014 was rife with big names — including Credit Suisse (NYSE:CS), Sheldon Inwentash, Oliver Gross, Sprott (TSX:SII) and Johnson Matthey (LSE:JMAT) — announcing their intention to shift away from precious metals. That might seem like a red flag to investors, but it’s important to note that in most cases the firms and individuals emphasized that they are not making a full break from the sector — just doing some healthy diversification.

It will be interesting to see whether any of these stories experience further developments in 2015.

Gold in 2015

It will also, of course, be interesting to see what happens to the gold price in 2015.
Speaking to that topic, Murenbeeld said he sees the yellow metal averaging $1,202 in the first quarter, rising to $1,277 in Q4 and then hitting $1,311 in the second quarter of 2016. “That’s up a little bit from where we are, but clearly not very dramatic,” he said. “It is predicated on a number of factors, but one of them is continued quantitative easing in many parts of the world,” he continued.
Other firms have come forward with similar predictions. A recent Kitco News article notes that Commerzbank (ETR:CBK) expects gold to average $1,200 in 2015, while Citi Research places it at $1,220. Meanwhile, TD Securities has set it at $1,225 and Natixis (EPA:KN) is estimating $1,140. The consensus of many firms seems to be that, similar to silver, gold will be weaker in the first half of 2015 as investors wait for the Fed to raise interest rates, with that pressure dissipating as the year comes to a close.
That might sound tame, but market participants shouldn’t necessarily sit back and relax. Murenbeeld cautioned that he’s “concerned on two fronts,” with the first being the geopolitical dimension. “It can flare up at any time, and, historically at least, each time we have a geopolitical crisis of some import, gold prices were quick to shoot up 8 to 10 percent,” he said, adding, “there’s lots of reason to expect some kind of geopolitical crisis, be it in connection with Russia, Ukraine or elsewhere in the Middle East, Far East, in Japan, in China. There’s lots of potential.”
Murenbeeld’s second concern, which is of a more economic nature, is about development in Europe. “The European economy is not growing, and we’re not expecting it to grow much this year,” he said.
For his part, Macpherson is a little worried about “the tightening of the capital markets.” As he explained, that’s because it’s resulted in both good and bad projects not receiving funding, and “good projects not getting funded is potentially a problem because they won’t necessarily advance.” That’s an issue for companies — and investors — for obvious reasons, though looking longer term he sees a shrinking project pipeline perhaps improving gold’s supply-demand balance.
Robert Carrington, president, CEO and director of Colombian Mines (TSXV:CMJ), is a little more optimistic. He said in a survey that he expects “there will be a large number of junior companies that fold in H1.” After that point, “the leaner market will see investors more focused on the remaining companies,” with “production and near-production assets [being] the first movers, followed by advanced exploration and eventually, if ever, the early exploration plays.”
All in all, it sounds like the gold market is in for a fairly quiet 2015. And after the turmoil of the last couple of years, maybe that’s a good thing.


 
This article was originally published on Gold Investing News in December, 2014.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
Related reading: 
Gold Outlook 2014: Will Gold Bounce Back?
A Brief Overview of the Gold Price Today.
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Kirkland Lake Gold Ltd. today announced that at a special meeting of shareholders held earlier today the Company’s shareholders voted in favour of the arrangement resolution approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company will be acquired by Agnico Eagle Mines Limited for common shares of Agnico Eagle in a merger of equals for consideration per Kirkland Share ...

Kirkland Lake Gold Ltd. (" Kirkland Lake Gold " or the " Company ") (TSX:KL) (NYSE:KL) (ASX:KLA) today announced that at a special meeting of shareholders held earlier today (the " Meeting "), the Company's shareholders voted in favour of the arrangement resolution (the " Kirkland Arrangement Resolution ") approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company (the " Kirkland Shares ") will be acquired by Agnico Eagle Mines Limited (" Agnico Eagle ") for common shares of Agnico Eagle (the " Agnico Shares ") in a merger of equals for consideration per Kirkland Share equal to 0.7935 of an Agnico Share (the " Arrangement ").

186,840,773 Kirkland Shares, representing approximately 70.85% of the issued and outstanding Kirkland Shares as at the record date, were voted at the Meeting. The Kirkland Arrangement Resolution was approved by 150,681,106 Kirkland Shares or approximately 80.65% of votes cast by Kirkland Lake Gold shareholders either in person or represented by proxy at the Meeting. The report of voting results will be made available under the Company's profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .

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cannabis plant layered with German flag graphic
Dmytro Tyshchenko / Shutterstock

Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Commercially viable scandium deposits are rare, making widespread use of the metal tricky. However, there is indeed opportunity in the space.

Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.

While it is more abundant than lead, mercury and all the precious metals, there are no pure scandium-producing mines. The rare earth element is often a by-product, produced from refining other metals, including uranium.

Pure scandium metal rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. What's more, even when scandium is found at elevated levels, processing it can be difficult, leading to very few stable sources of this critical metal.


Not surprisingly, that means there has been very little adoption of scandium in commercial applications. However, as John Kaiser of Kaiser Research has pointed out several times in the past few years, as well as more recently, that doesn't mean there hasn't been research into how scandium could be used in the future.

"Hundreds of applications (have been) filed, many of them related to alloys with aluminum," he said in an interview with the Investing News Network. "This obscure metal is going to go ballistic in the next few years."

Kaiser made that statement a few years back, and scandium has yet to go ballistic. But he still has hope for the metal, and it could yet have its day in the sun.

Below is an overview of the scandium market. Topics covered include current production, newcomers to the space and the metal's potentially bright future.

Current scandium production

The first known large-scale scandium production was associated with Russian military programs. Details are lost to history, but Russians reportedly alloyed the metal with aluminum to make lightweight MIG fighter parts. Mining at these historic Russian production sites has ceased, but stockpiles of scandium oxide and scandium master alloy remain in Russia. These stockpiles are rumored to be dwindling, but continue to be offered for sale on the market.

Today, most scandium is produced as a by-product during the processing of other ores, such as uranium or rare earths, or recovered from previously processed tailings. As a result, scandium supply can be affected by the supply and demand dynamics of the metals it is produced with. That can make the metal's already tough-to-follow market dynamics even more difficult to understand.

According to the US Geological Survey, scandium-producing countries include China, where it is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.

More US production could be on the horizon as well after a push in legislation that encourages the Department of Defense to look into the potential uses of the metal. Environmental and construction permits have been approved for NioCorp's (TSX:NB,OTCQX:NIOBF) polymetallic Elk Creek project with probable reserves estimated to be 36 million tonnes containing 65.7 parts per million scandium.

Scandium resources have been identified in minerals-rich regions across the world, most notably in Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX:SCY), which controls the Nyngan project; Clean TeQ Holdings (ASX:CLQ,OTCQX:CTEQF), which holds the Sunrise project; and Platina Resources (ASX:PGM,OTC Pink:PTNUF), which is working on the Owendale project.

Scandium price and trading

The US Geological Survey states that the global scandium market is "small relative to most other metals." This is exemplified by global production and consumption, which is only an estimated 15 to 20 metric tons annually.

The US Department of Commerce and the International Trade Commission do not have specific data on trading for the metal. Furthermore, there is no formal buy/sell market today — scandium is not traded on an exchange and there are no terminal or futures markets.

Instead, the metal is traded between private parties, mostly at undisclosed prices and in undisclosed amounts. Therefore, understanding the precise volume of production and cost of scandium is difficult, and independent estimations are more relevant.

Production estimates are based on levels of trader activity and interest, as well as the knowledge that some traders deal in the critical metal from very small operations.

The estimates also include consumers believed to be sourcing their own scandium through small, controlled recovery operations, but don't consider amounts of the metal contained in the master alloy currently being sold from Russian stockpiles.

The scandium opportunity

Analysts expect the global scandium market to grow at a compound annual growth rate of above 11 percent between 2020 and 2025. "The major factors driving the growth of the market studied are the accelerating usage in solid oxide fuel cells, and the rising demand for aluminum-scandium alloys," notes ReportLinker.

Despite the lack of known, stable supply, scientists and engineers have been working hard to develop new products incorporating the metal. Scandium's potential in high-tech applications is well documented. Highlights of the metal's properties include:

  • It can be used in the creation of stronger, corrosion-resistant, heat-tolerant and weldable aluminum alloys for lightweight aircraft and automobiles.
  • Its outstanding electrical properties and heat resistance are valuable for solid oxide fuel cells.
  • It has unique optical properties for high-intensity lamps.

A recent Kaiser Research report on scandium details the wide variety of end uses for scandium now and into the future, as well as where potential supply to meet that demand may originate.

potential scandium oxide supply and demand

Potential scandium oxide supply and demand.

Kaiser Research

As Kaiser has explained, "There's an enormous latent demand for scandium if it ever became available on a primary, scalable basis."

In other words, the only barrier to accessing demand from a new family of high-performance aluminum materials and energy/lighting products is the lack of commercially viable larger-scale scandium production. Interestingly, Kaiser's work highlights two important scandium market events that may "have the potential to launch scandium demand growth over the next decade towards a 1,000 (tonne per annum) market worth US$2 billion."

For one, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) announced in 2020 that it has developed a route to recovery for scandium at its Sorel-Tracy facility in Quebec, where it produces titanium slag from the Lac Tio iron-titanium deposit. In mid-2021, Rio Tinto began commercial-scale operations at its new scandium oxide production facility.

"The Rio Tinto development is a game changer for the scandium sector," said Kaiser, who believes the increase in scandium production could help boost the sector.

Secondly, Scandium International Mining filed an application in late 2019 for a patent protecting a method for recovering scandium and other metals from the waste streams of copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed its patent-pending process could recover enough scandium to match the supply being added to the market by Rio Tinto.

"Conditions are finally right for scandium to become the ideal lightweighting solution for aluminum," Kaiser said in his note to investors.

This is an updated version of an article originally published by the Investing News Network in 2014.

Don't forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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