Returning investors see gold prices surge, but new M&A activity still unlikely – by Niall McGee (Globe and Mail – August 8, 2019)

Surging bullion prices might not stimulate blockbuster dealmaking, but there are signs generalist investors are wading back into gold stocks after a protracted period of shunning the sector.

“I hadn’t gotten a call about gold from a client in the better part of a year and a half, and I got one yesterday,” said Matt Barasch, portfolio manager with RBC Dominion Securities in Toronto, who manages money for retail clients.

Gold hit a six-year high on Wednesday north of US$1,500 an ounce, driven by escalating trade-war tensions between the United States and China, falling interest rates and a slowdown in global growth. Historically sought out as a safe-haven investment, gold has risen by 17 per cent in 2019, after languishing in the US$1,300 range for about three years.

Gold stocks meantime have done even better. Barrick Gold Corp., Agnico Eagle Mines Ltd. and Kirkland Lake Gold Ltd., Canada’s biggest gold companies by market value, are up 30 per cent, 41 per cent and 74 per cent respectively this year.

“When investors start seeing gold popping up on the front page of the business section, hitting multiyear highs, that’s when all of a sudden they start to think ‘Wow, I really need this in my portfolio,'” Mr. Barasch said.

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