How gold miners lost their mojo – by Gabriel Friedman (Financial Post – February 15, 2022)

Investors have passed miners by amid growing confidence in ability of central banks to stave off systemic crises

Gold miners should be some of the happiest people on Bay Street. Central banks have spent the past couple of years pumping trillions of dollars into the global economy, precisely the kind of thing that makes gold bugs crazy and typically drives up demand for a metal that humans have valued for centuries.

Inflation has surged to its fastest pace in more than three decades, and geopolitical rivalries haven’t been this intense since the Cold War. If investors ever needed a safe haven, it’s now.

Gold miners have long pitched themselves as something akin to portfolio insurance, an asset class as solid as the metal they dig out of the ground, which is supposed to hold its value at normal times, and rise when a panic-inducing crisis occurs. But this crisis has largely passed miners by.

Gold itself has performed as advertised: the commodity touched an all-time high of US$2,058 per ounce in late 2020 and it remains elevated at around US$1,862 per ounce, roughly 12 per cent away from its immediate pre-pandemic high.

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