Tags: gold | miners | barrick | berkshire | buffett

Gold Miners Jump With Berkshire Sending Barrick to 2013 High

Gold Miners Jump With Berkshire Sending Barrick to 2013 High
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Monday, 17 August 2020 04:44 PM

Barrick Gold Corp. surged to the highest closing price in more than seven years, leading gains in precious-metals miners after Warren Buffett’s Berkshire Hathaway Inc. added the company to its portfolio.

Barrick, the world’s second-largest miner of the metal, jumped 12% and a Bloomberg Intelligence gauge of senior gold miners climbed after Berkshire on Friday reported a purchase of 20.9 million shares as of the end of the second quarter. Greenwood Village, Colorado-based Newmont Corp., the largest producer, was also higher Monday, along with Kinross Gold Corp. and Harmony Gold Mining Co.

Gold miners are benefiting as near-record bullion prices boost profit margins and help them lure back generalists who fled the sector years ago. In the past, Buffett, the billionaire chairman of Berkshire, cautioned against investing in the metal because it’s not productive like a farm or a company. The filing shows moves made by Buffett or his two investing deputies, Todd Combs or Ted Weschler.

“Seeing Buffett come into the space is obviously very interesting and it will spark a bit more general interest,” Bryan Slusarchuk, chief executive officer of Vancouver-based Fosterville South Exploration, said in a telephone interview. “The sector is relatively small so when you see just a small change in sentiment added, it doesn’t take a huge shift in asset allocation to drive the gold equities higher.”

Streaming companies, which provide upfront payments to miners in exchange for the right to buy metals at a discount in the future, also rose on Monday.

As real interest rates remain below zero and governments from the U.S. to China work to provide economic relief from the toll of the coronavirus, analysts including those at Goldman Sachs Group Inc. see further increases for the metal. Goldman’s Jeffrey Currie said Thursday that “we’re not out of this crisis yet,” and that stimulus could last into 2021.

“There’s still a substantial amount of demand for gold and silver, in particular from retail accounts,” Daniel Ghali, a commodities strategist at TD Securities, said by phone. “We are, in my opinion, in a speculative frenzy here, and so this news helps to convince these speculators to add to gold, considering that the Oracle of Omaha is stepping in.”

Toronto-based Barrick settled at $30.13 at 4:15 p.m. in New York, the highest closing price since February 2013. Newmont climbed 7%, while the BI Global Senior Gold Valuation Peers index of 13 producers was up 4.5%.

Spot gold rose 2% to $1,984.85 an ounce in New York. Prices have surged more than 30% this year and reached a record $2,075.47 earlier this month.

© Copyright 2021 Bloomberg News. All rights reserved.


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Barrick Gold Corp. surged to the highest closing price in more than seven years, leading gains in precious-metals miners after Warren Buffett's Berkshire Hathaway Inc. added the company to its portfolio.
gold, miners, barrick, berkshire, buffett
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2020-44-17
Monday, 17 August 2020 04:44 PM
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