INN reached out to US-focused gold companies at VRIC to ask whether they think Donald Trump has been good for American gold.
US President Donald Trump is now well into the final year of his term in office, and a lot has happened since he took the reins — though in the resources sector perhaps the biggest splash he’s made has been with the trade war.
Experts and analysts have had something to say about how the conflict with China has impacted each commodity, with negotiations never far from the headlines and downturns in commodity prices often attributed to the uncertainty that has come with the tit-for-tat actions taken by both sides.
One commodity that was close to the top of headlines as the trade war progressed — and seemingly benefited from the drama — was gold, a well-known, tried and true safe haven commodity that pins its worth to its reputation as a preserver of wealth when everything else is going to hell.
As 2016 drew to a close, gold was valued at US$1,150 per ounce, and since August 2019 it has shot up (for the most part) above US$1,500 — some of the highest values for the precious metal since early 2013.
Where the credit falls for such values is confusing, however — and not answered here. Normally a high gold price should mean a weak stock market, but as it stands the stock market has been performing well since Trump took office, a fact that’s not lost on the man himself.
The Investing News Network (INN) took the opportunity at the recent Vancouver Resource Investment Conference to ask US-based gold companies whether Trump has been good for the US gold industry and if they give him any credit for the rise in gold’s value over time — especially given his apparent ability to influence the stock market with mere tweets.
INN approached representatives from six companies with interests in American gold, and the overwhelming consensus was that yes, Trump has been good for gold in the US, but not in terms of gold’s price — rather, because of his penchant for cutting red tape.
“It’s not something that happens overnight, (but he’s) clearly maneuvering the ship in the right direction.”
Trey Wasser, president and CEO of Ely Gold Royalties (TSXV:ELY,OTCQB:ELYGF) agreed, saying that the “number one thing” Trump has done that is good for the industry is shortening permitting timeframes.
Wasser added that part of that process has been the shortening of timeframes on the environmental side, which he conceded is “maybe more fricticious with the left.”
But more on that later.
CEO of Peloton Minerals (CSE:PMC,OTCQB:PMCCF) Ted Elwood said that his company has “seen the turnaround time in applications we made with the government accelerate,” while Thomas Ulrich, the CEO of Aston Bay Holdings (TSXV:BAY,OTCQB:ATBHF), said that whether it’s true or not that Trump has sped up the process, “it’s easier to get permits if you need them.”
“There’s a perception that mining should be easier,” he added.
Peloton has interests in Nevada and Montana, while Aston Bay has properties in Virginia.
Randall Moore, who is vice president of exploration at Gold Springs Resource (TSX:GRC,OTCQB:GRCAF), which has gold and silver interests in both Nevada and Utah, was also on the permitting bandwagon, saying that first and foremost the shortening of the permitting process is what the industry is most appreciative for.
Moore also touched on environmental side of things, saying that the Trump administration has taken steps to “roll back some of the sage grouse restrictions.”
He said that this was more of a push for regulatory decisions to be made on a state level rather than in Washington. “He’s pushing a lot of the decision making down to the states … (and) expanded (the ability) of states to regulate.”
Wasser also elaborated on his comments on the environmental permitting side, saying that from the industry’s point of view, the Environmental Protection Agency (EPA) had been taking too many liberties with regulation, and that is changing under Trump.
“The EPA is there to enforce policy, not make policy and laws … they have been regulating beyond their edict. (We) don’t want to see abandonment of environmental rules, but the EPA needs to back off.”
When queried about the president’s perceived volatility when it comes to the global markets and the rising value of gold, each company representative waved away any credit to Trump himself.
“I don’t really think Trump has done anything to drive gold up or down,” said Wasser. “I don’t think I’d give him any credit there. … Geopolitical spikes in the gold price tend to always get brought back. Other things that would move gold higher is a bad stock market, and we’ve had nothing but a good stock market under Trump.”
Osterberg also threw the credit for the higher gold price and interest in the precious metal to other events around the world, and Ulrich said that while Trump’s volatility and perceived influence on the gold price “may be part of what’s happening in the background,” he would “expect currency and exchange rates to play a bigger role.”
Elwood handed the credit to geopolitics as well. “The long-term trend is upward for gold. It’s going to bounce around in the short term with geopolitical events, but upwards.”
As of the time of writing, it’s now the second month of 2020, and the US presidential election is chugging along as if in full swing already, despite being more than 10 months out.
Trump is campaigning heavily on his economic promises, and it’s not unusual to hear those in the mining industry expressing concern for the future direction of the industry under, say, a Bernie Sanders or Elizabeth Warren presidency.
However the year goes, pundits, experts, talking heads and executives are confident that gold will go up regardless, so gold companies will have something to be happy about beyond the November election, whatever the result.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Peloton Minerals is a client of the Investing News Network. This article is not paid-for content.
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.