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Tag: Precious metals industry

  • ETFs are on pace to break record annual inflows, but this wild card could change it all

    ETFs are on pace to break record annual inflows, but this wild card could change it all

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    Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.

    “With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”

    Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.

    “If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”

    Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.

    “I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”

    Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.

    “Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.

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  • Why substituting cryptocurrency for gold exposure may be a costly mistake

    Why substituting cryptocurrency for gold exposure may be a costly mistake

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    Viewing cryptocurrency as “digital gold” may be a mistake.

    State Street Global Advisors’ George Milling-Stanley, whose firm runs the world’s largest gold exchange-traded fund, believes cryptocurrency is no substitute for the real thing due its vulnerability to big losses.

    “Volatility does not back up any claims for crypto to be a long-term strategic asset as a competitor to gold,” the firm’s chief gold strategist told CNBC’s “ETF Edge” earlier this week.

    Milling-Stanley’s firm is behind SPDR Gold Shares, the world’s largest physically backed gold ETF. It has a total asset value of more than $57 billion as of last week, according to the company’s website. The ETF is up 7% year to date as of Friday’s market close.

    Milling-Stanley believes gold’s 6,000-year history as a monetary asset serves as a significant sample basis to understand the benefits of investing in gold.

    “Gold is a hedge against inflation. Gold’s a hedge against potential weakness in the equity market. Gold’s a hedge against potential weakness in the dollar,” he noted. “To me, historically, the promise of gold for investors has … overtime [helped] to enhance the returns of a properly balanced portfolio.”

    The precious metal is having trouble this year staying above the $2,000 an ounce mark. But Milling-Stanley believes the economic backdrop bodes well for gold — recession or not.

    “It’s pretty clear that we’re liable to be in a period of slow growth. … Historically, gold has always done well during periods of slower growth,” Milling-Stanley said.

    Milling-Stanley also believes the relaxation of Covid-19 restrictions in China should spark more demand for gold. It’s known as the world’s largest consumer of gold jewelry behind India, according to the World Gold Council.

    “It’s not just China and India. It’s Vietnam, it’s Indonesia, it’s Thailand and Korea. It’s a whole raft of Asian countries that are really the main drivers of gold jewelry demand,” Milling-Stanley said.

    Gold settled at $1,960.47 an ounce Friday. The commodity is up more than 7% so far this year.

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  • EPA proposes restrictions to block proposed Alaska mine

    EPA proposes restrictions to block proposed Alaska mine

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    ANCHORAGE, Alaska — The U.S. Environmental Protection Agency on Thursday proposed restrictions that would block plans for a copper and gold mine in Alaska’s Bristol Bay region that is home to the world’s largest sockeye salmon run.

    A statement from the regional EPA office said discharges of dredged or fill material into the waters of the U.S. within the proposed Pebble Mine footprint in southwest Alaska would “result in unacceptable adverse effects on salmon fishery areas.”

    “This action would help protect salmon fishery areas that support world-class commercial and recreational fisheries, and that have sustained Alaska Native communities for thousands of years, supporting a subsistence-based way of life for one of the last intact wild salmon-based cultures in the world,” regional EPA administrator Casey Sixkiller said in a statement.

    The decision will now be forwarded to the EPA Office of Water for the final determination. That office has 60 days to affirm, modify or rescind the recommendation.

    The EPA regional office also proposed to restrict the discharge of dredged or fill material with any future proposal for Pebble Mine that would be similar in size or bigger than what is currently proposed.

    Mine developer Pebble Limited Partnership, owned by Canada-based Northern Dynasty Minerals Ltd., called the EPA’s decision a preemptive veto. It described the decision as political and without legal, environmental or technical merit.

    “We still firmly believe that the proposed determination should have been withdrawn as it is based on indefensible legal and non-scientific assumptions,” Pebble CEO John Shively said in a statement.

    “Congress did not give the EPA broad authority to act as it has in the Pebble case. This is clearly a massive regulatory overreach by the EPA and well outside what Congress intended for the agency when it passed the Clean Water Act,” Shively said.

    The debate over the proposed mine in an area of southwest Alaska known for its salmon runs has spanned several presidential administrations. The EPA has said the Bristol Bay region also contains significant mineral resources.

    “After twenty years of Pebble hanging over our heads, the Biden Administration has the opportunity to follow through on its commitments by finalizing comprehensive, durable protections for our region as soon as possible,” Alannah Hurley, executive director for the United Tribes of Bristol Bay, said in a statement.

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