Strengths
- The best performing precious metal for the week was gold, up 3.64%, on expectations that the Federal Reserve might cut interest rates by 50 basis points at its September 17 meeting, as a weaker-than-expected gain in Nonfarm Payrolls highlighted the lackluster in the labor market. Gold hit a new all-time on Friday with the new data point. The yellow metal first hit a record high earlier in the week as the prospect of U.S. interest-rate cuts and growing concerns over the Federal Reserve’s future lent fresh impetus to the multiyear rally in precious metals
- The World Gold Council (WGC) is seeking to launch a new digital form of gold that would facilitate transactions in fractionalized ownership and trading of physical gold held in segregated accounts. They are looking to trial the program for the first quarter of 2026. They are trying to standardize the digital layer of gold to compete with other assets. The World Gold Council had tremendous success launching its physical gold ETF.
- Zijin Minig Group Co. Ltd., China’s largest gold producer, announced they will IPO Zijin Gold International on the Hong Kong Stock Exchange to raise at least $3 billion in what would the Exchange’s second largest IPO, rivaled only by Contemporary Amperex Technology Ltd.’s $5.3 billion raise in May, according to Bloomberg. Li Xiaofeng, a leading partner at Dentons, was quoted in ChinaDaily saying that “Zijin needs a large pool of offshore money to invest and expand production in their assets.” New money is coming to invest in potential acquisitions.
Weaknesses
- The worst performing precious metal for the week was palladium, but still up 0.40%, likely with sentiment for economic growth being chipped away by a lack of confidence by both industry and consumers. Shandong Gold Mining shares fall as much as 5% in Hong Kong, after the Chinese company raised $500 million in an upsized H-share placement at a discount, but that didn’t last long, with the share only down 1.75% by the close. The company offered up to 136.5 million shares at HK$28.58 apiece in a placement, according to a filing to HKEX, but finished the week at HKA$32.82, a new six-month high.
- According to Morgan Stanley, African Rainbow Minerals reported headline earnings per share (EPS) of R11.66 - R14.25, with the midpoint being R12.96. Visible Alpha consensus is R17.57/share. The miss was due to higher manganese costs, Bokoni costs and Two Rivers mine weakness. The tax expense was R489m higher than their estimate.
- Following the operational update in early June, Pan African reported a trading statement ahead of its detailed financial results, which are expected on September 10, 2025. Headline EPS is expected to be in the range of US¢5.68-6.10/share versus BMO’s estimate of US¢6.94/share.
Opportunities
- Bank of America calculates that the world total of central banks must purchase a little over 11,000 tons (t) of gold to attain gold holdings of 30% of total reserves. This is equivalent to approximately 10 years of purchasing at recent elevated annual levels. If they exclude central banks that already hold at least 30% of reserve assets in gold, they calculate that the remaining central banks must purchase 24,665 tons to attain gold holdings at 30%. This is equivalent to over two decades of purchases at recent elevated levels.
- Bank of America raised their long-term gold price +25% to $2500. They raised their long-term silver price +30% to $35/ounce. In their view, the conditions that have led to recent strength in gold price look likely to persist, namely: (1) U.S. structural deficit; (2) inflationary pressure from deglobalization; (3) perceived threats to the independence of the U.S. central bank; and (4) global geopolitical issues. Investors have piled into gold-backed exchange-traded funds this year, with total holdings at the start of September reaching their highest point since June 2023, according to data collected by Bloomberg.
- The quest to add real tangible value to crypto assets continues to spill over into gold and gold equities too. Stablecoin issuer Tether Holding SA has added a second time to their Elemental Altus Royalties Corp. position on Friday. Elemental Altus Royalties also announced on Friday morning they were acquiring EMX Royalty Corp in an all-stock deal. The Financial Times reported that Tether has held talks about investing in gold mining, in addition to bullion. Stablecoin buyers own a derivative that is tied to the value of the dollar and its associated credit risks.
Threats
- The market for natural diamonds is in crisis, with cut-price lab-grown equivalents hitting demand particularly hard in the U.S., the biggest market for diamonds. They accounted for almost half of engagement ring purchases last year compared with 5% in 2019, according to jewelry insurer BriteCo Inc.
- Pan African reported 196,926 ounces of gold were sold in F2025, which is slightly higher than BMO’s estimate of 194,328 ounces. Of these gold sales, 105,004 ounces were subject to hedges and therefore did not benefit from the current gold price environment. This negatively impacted profits by 23%, according to BMO.
- An outbreak of Ebola virus was declared in a remote area of the Democratic Republic of Congo (DRC). Fifteen deaths and 28 suspected cases have been reported. The last outbreak was in 2022, which took three months to control, showing this health risk is not to be taken lightly, with a 64% mortality rate. There are no reports of any mining operations being impacted at this time.
