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Pierre Lassonde afferma che l'oro potrebbe raggiungere $ 25.000 in 30 anni

Nota: gli articoli elencati di seguito contengono materiale storico. I dati forniti erano aggiornati al momento della pubblicazione. Per
informazioni aggiornate su uno qualsiasi dei fondi menzionati in queste presentazioni, visitare la pagina relativa alle prestazioni dei
fondi .

20 settembre 2019

Di Frank Holmes
CEO e Chief Investment Officer
US Global Investors

Quest'anno ha celebrato il 30 ° anniversario del Denver Gold Forum (DGF), la conferenza di investimento in
titoli di metalli preziosi più prestigiosa al mondo. L'evento su solo invito, che si è tenuto all'inizio di questa
settimana, ha visto la partecipazione di incredibili sette ottavi delle società di oro e argento quotate al mondo
dalla produzione, oltre a importanti dirigenti di metalli e miniere, gestori di denaro, analisti e investitori.

Siamo stati uno dei membri fondatori della DGF nel 1989, quando ho acquistato per la prima volta una
partecipazione di controllo negli investitori globali statunitensi. Durante il forum di quest'anno, sono stato
onorato e commosso per essere riconosciuto per il contributo della nostra azienda alla creazione e all'eredità in
corso del gruppo.
Ralph Aldis, esperto globale di metalli preziosi e oro degli Stati Uniti, e io abbiamo avuto l'opportunità di
incontrare un certo numero di aziende e analisti durante la DGF. Siamo rimasti sorpresi nell'apprendere che
alcuni non erano ancora consapevoli del fatto che i fattori fondamentali venivano applicati sempre più agli
investimenti in azioni d'oro. Qui a US Global, ad esempio, ci piace combinare una selezione di titoli vecchio stile
dal basso verso l'alto con strategie quantistiche all'avanguardia come il data mining e l'apprendimento
automatico.

30 anni di (Denver) Gold

In effetti, negli ultimi 30 anni sono cambiate molte cose nel settore
dei metalli preziosi e delle miniere, come ci è stato ricordato dal mio
amico e mentore di lunga data Pierre Lassonde. Pierre, come molti
di voi sanno, è il leggendario co-fondatore, insieme a Seymour
Schulich, di Franco-Nevada, la prima società per azioni in oro
quotata in borsa. Quello che potresti non sapere è che Pierre è
anche uno dei più gentili filantropi del Canada e attualmente
ricopre il ruolo di presidente del Consiglio di amministrazione del
Canada Council for the Arts.

Secondo Pierre, la domanda annuale globale di oro è esplosa negli

anni da quando si è tenuto il primo DGF. La domanda è cresciuta di
oltre cinque volte, da un valore di $ 32 miliardi nel 1989 a $ 177
miliardi nel 2018.

I lettori fedeli sanno che le banche centrali di oggi sono acquirenti netti di oro mentre cercano di diversificarsi
dal dollaro USA. Ma 30 anni fa, erano venditori netti . Nel 1989, le banche hanno svolto collettivamente fino a
432 tonnellate dalle loro riserve. Paragonalo allo scorso anno, quando hanno finito per acquistare circa 651,5
tonnellate, il più grande acquisto dall'amministrazione Nixon, con la Russia e la Cina all'avanguardia .

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Parlando della Cina ... Pierre ci ha fatto notare che negli ultimi 30 anni abbiamo assistito a un significativo
cambiamento nella domanda di oro, da ovest a est, mentre i redditi in Cina e India, o "Chindia", sono
aumentati. Nel 1989, la quota combinata di Chindia nella domanda globale di metallo prezioso era solo del 10
percento circa. Avanti veloce ad oggi, ed è il 53 percento!

"Non dimenticare la Regola d'oro", ha detto Pierre. "Chi ha l'oro fa le regole!"

Il prezzo dell'oro nel 2049 sarà ...

Uno dei punti salienti della presentazione di Pierre è stata la sua previsione per il prezzo dell'oro nei prossimi
30 anni. Dopo aver analizzato il tasso di crescita annuale composto storico (CAGR) dell'oro negli ultimi 50 anni,
da quando il presidente Nixon ha formalmente tolto gli Stati Uniti dal gold standard, Pierre afferma di vedere
un obiettivo di prezzo medio di $ 12.500 l'oncia entro il 2049. E sotto la "destra "Condizioni, potrebbe arrivare
fino a $ 25.000!

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"Penso che l'oro sia in un buon posto", ha detto a Daniela Cambone di Kitco News a margine della DGF. “La
domanda finanziaria è guidata da tassi di interesse negativi. Se il rendimento dei titoli trentennali del Ministero
del Tesoro statunitense dovesse mai, mai andare negativo, come in Germania e Francia, Dio benedica, stiamo
guardando $ 5.000 in oro.

Sono sicuro che Pierre avrà altro da aggiungere quando si unirà a me nel nostro prossimo webcast sulle
opportunità d'oro, che si terrà il 31 ottobre. Salva la data e resta sintonizzato per maggiori dettagli!

ESG Investing diventa mainstream

Una delle mie osservazioni su come la DGF è cambiata negli ultimi 30 anni è il modo in cui le compagnie
minerarie lanciano le loro azioni agli investitori. In precedenza, sarebbero passati direttamente ai dati
finanziari, ai costi di produzione, alla fattibilità mineraria e simili. Oggi, tuttavia, iniziano discutendo argomenti
come la sostenibilità e l'impatto ambientale.

Potresti aver sentito parlare degli investimenti di ESG, che è sinonimo di ambiente, sociale e governance.
Questo insieme di criteri è cresciuto di importanza tra gli investitori "socialmente consapevoli" nell'ultimo
decennio, come puoi vedere nella tabella qui sotto. Solo negli Stati Uniti, gli asset under management (AUM) in
fondi e ETF orientati all'ESG sono più che raddoppiati da circa $ 40 miliardi nel 2013 a $ 90 miliardi nel 2019,
secondo i dati di Morningstar. In Europa, dove gli investitori istituzionali e i gestori di fondi devono ora
conformarsi a determinati standard ESG, la cifra è probabilmente ancora più elevata.
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Per favore, non avere un'idea sbagliata. Se questi problemi sono importanti per gli investitori, dovrebbero
essere liberi di allocare il proprio denaro verso società le cui convinzioni sono allineate alle proprie.

La mia preoccupazione è che le aziende, i gestori di fondi e gli investitori istituzionali siano sempre più spinti,
soprattutto dai governi europei, a conformarsi a una serie di standard sempre mutevoli, oppure debbano
affrontare il disinvestimento o, in casi estremi, essere eliminati da una borsa.

Prendi il fondo pensione del governo norvegese. Stimato a oltre $ 1 trilione, è il più grande fondo di questo tipo
al mondo. È diventato così grande grazie ai giacimenti petroliferi del Mare del Nord altamente redditizi. Ma
sulla base di una recente raccomandazione del parlamento norvegese, il fondo sta attivamente scaricando tutte
le sue scorte di combustibili fossili.

Quindi c'è solo la confusione generale e l'incoerenza su ciò che costituisce una società conforme a ESG e chi può
investire se la società è considerata non conforme. Sembra che ogni governo in Europa abbia le proprie
definizioni, divulgazioni e regolamenti. Per operare in Francia, ad esempio, i gestori patrimoniali sono ora
tenuti a rivelare come le considerazioni sui cambiamenti climatici siano incorporate nelle loro decisioni di
investimento. Lo stesso vale per i fondi pensione nei Paesi Bassi.

Tutte queste regole e procedure extra hanno un costo per tutti i soggetti coinvolti, dalle aziende stesse ai gestori
patrimoniali. Alla DGF, ho sentito che una società mineraria in particolare ha dovuto pagare fino a $ 40 milioni
solo per rimanere conforme ESG. Mi preoccupo anche del fatto che registi e membri del consiglio di
amministrazione si uniscano a società che si preoccupano solo della sostenibilità e hanno poca considerazione
per creare valore per gli azionisti.

Le "credenziali verdi" di Gold possono essere capite: RBC

La buona notizia è che l'oro e l'estrazione dell'oro sembrano molto attraenti dal punto di vista dell'ESG. Le
"credenziali verdi" dell'oro, infatti, possono essere sottovalutate, secondo un recente rapporto della Royal Bank
of Canada (RBC). Per uno, possedere oro fisico - in monete, lingotti o gioielli - non ha assolutamente alcun
impatto ambientale e aumenta effettivamente il rating ESG di un portafoglio.
Per quanto riguarda l'estrazione dell'oro, il processo emette una quantità significativamente inferiore di gas
serra (GHG) su base per dollaro rispetto ad altri prodotti estratti, tra cui alluminio, acciaio, carbone e zinco. Ciò
significa che l'oro ha una "impronta di carbonio" molto più piccola di ciò che alcune persone potrebbero
pensare.

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Molte compagnie minerarie stanno anche lavorando per soddisfare l'atteggiamento mutevole di alcuni
investitori. IAMGOLD, ad esempio, sta investendo molto in infrastrutture solari e la sua miniera in Burkina
Faso è il più grande impianto ibrido solare / termico del mondo, secondo RBC. Newmont Goldcorp sta andando
avanti con la sua "Smart Mine Initiative", che utilizza un software di ottimizzazione per massimizzare il
recupero del minerale e ridurre al minimo gli sprechi. E Torex Gold ha sviluppato quello che chiama il "Sistema
minerario di Muckahi", che sostiene di limitare l'interruzione della superficie e ridurre l'uso di combustibili
fossili nel sottosuolo.

Nello stesso rapporto, RBC afferma che rimane "positivo sull'oro", scrivendo che la "liquidità profonda del
metallo, l'accettazione quasi globale e il ruolo di" rifugio sicuro percepito "e" riserva di valore "rendono molto
difficile lo spostamento" come investimento.

Vuoi saperne di più sul Denver Gold Forum? Scopri perché gli investitori sono cautamente
rialzisti sul metallo giallo guardando il mio ultimo video!

Mercato dell'oro
Questa settimana l'oro spot ha chiuso a $ 1,516,90, in rialzo di $ 28,25 per oncia, ovvero l'1,90 per cento. Le
azioni in oro, misurate dall'indice NYSE Arca Gold Miners, hanno chiuso la settimana in rialzo del 6,19
percento. L'indice S & P / TSX Venture è salito dello 0,22 percento. Il dollaro USA ponderato per il commercio è
aumentato dello 0,22 per cento.

Data Evento Sondaggio Effettivo precedente

Sep-17 Germania ZEW Survey Situazione attuale -15.0 -19.9 -13.5

Sep-17 Germania Zew Survey Expectations -38,0 -22,5 -44,14

Sep-18 Euro CPI Core Euro YoY 0,9% 0,9% 0,9%

Sep-18 Inizia l'alloggiamento 1250k 1364k 1215k

Sep-18 Decisione del tasso FOMC (limite superiore) 2,00% 2,00% 2,00%

Sep-19 Richieste iniziali di disoccupazione 213K 208k 206k

Sep-24 Conf. Consiglio di fiducia dei consumatori 133,0 - 135.1

Sep-25 Vendite di nuove case 656k - 635K

Sep-26 Hong Kong esporta su base annua -7,3% - -5,7%

Sep-26 QoQ annualizzato del PIL 2,0% - 2,0%

Sep-26 Richieste iniziali di disoccupazione 211k - 208k

Sep-27 Ordini di beni durevoli -1,2% - -2,0%

Punti di forza
Il metallo con le migliori prestazioni di questa settimana è stato l'argento, in crescita del 3,16 percento,
con l'oro rimbalzato questa settimana. Dato che l'oro era destinato a un piccolo guadagno settimanale per
la prima settimana su quattro, i trader erano per lo più rialzisti o neutrali sulla traiettoria di lingotti nel
sondaggio settimanale di Bloomberg. Il palladio, tuttavia, è salito dell'1,8 percento a un record di $
1.648,65 l'oncia per la sua corsa migliore dal 2012 con sette settimane di guadagni. Il metallo prezioso sta
guadagnando da forniture più strette. Sebbene le vendite di automobili siano leggermente diminuite,
standard ambientali più rigorosi stanno creando la necessità di un maggiore carico di palladio nei
catalizzatori automatici, che vengono utilizzati per ridurre l'inquinamento dei veicoli.
Il metallo giallo ha recuperato oltre $ 1,500 l'oncia, recuperando da un autunno mercoledì, dopo che la
Federal Reserve ha annunciato un taglio del tasso di 25 punti base. Carsten Menke, capo della ricerca
presso Julius Baer, afferma che si aspetta che l'oro salirà a $ 1,575 l'oncia nei prossimi tre mesi a causa di
ulteriori tagli dei tassi. Le esportazioni svizzere di oro sono salite ai massimi livelli dal 2016 ad agosto a
causa dell'aumento della domanda da parte del Regno Unito che ha compensato la minore domanda in
Asia, secondo i dati doganali.
Investors now appear to be shifting money down market to smaller capitalization names as confidence
grows in duration of the coming gold cycle. On Tuesday, investors poured $193 million into the VanEck
Junior Gold Miners ETF (GDXJ), the largest ETF that invests in junior gold miners. The fund attracted
the most money in more than two years on growing optimism that companies will perform strongly
alongside higher gold prices, reports Bloomberg.

Weaknesses
 The worst performing metal this week was platinum, down 0.27 percent, as hedge funds cut net bullish
platinum positions. As mentioned above, gold took a tumble on Wednesday after Fed policymakers were
spilt over the need for additional rate cuts after the one announced this week. Bob Haberkorn, senior
market strategist at RJ O’Brien & Associates LLC, said in a phone interview with Bloomberg that “if
you’re a gold trader right now, you’re a little confused.” Turkey’s central bank gold holdings fell $615
million from the previous week, but reserves are still up 34 percent year-over-year.
It’s rare for the Department of Justice to bring criminal Racketeer Influenced and Corrupt Organizations
Act (RICO) charges, but it just did. Bloomberg reports that two current and one former JPMorgan Chase
& Co. metals traders were charged with RICO criminal violations for rigging precious metal futures
markets over the course of a decade. The three individuals are accused of engaging in “a massive,
multiyear scheme to manipulate the market for precious metals futures contracts and defraud market
participants.”
Negative rates just got more negative for a record group of bank clients in Denmark. Jyske Bank A/S is
offering the first 10-year mortgage at negative coupons and said that it has no choice but to drag more
retail depositors into its negative-rates after the country’s central bank lowered its policy rate to minus
0.75 percent, writes Bloomberg. CEO Anders Dam said in a statement: “Due to the rate reduction last
week, we are losing even more money. And we need to share that bill with some of our clients.”

Opportunities
At the Denver Gold Forum earlier in the week, China Gold International Resources Corp. said it is on the
hunt for M&A deals worth as much as $2 billion. Executive Vice President Jerry Xie said in an interview
that they need more pipeline in gold production and are looking for acquisition opportunities “quite
aggressively.” And there could be big opportunity for deals as many mining companies could use some
lowering of general and administrative (G&A) costs, according to Shareholders’ Gold Council. In a recent
report, the group writes that $2.5 billion of profits generated by 47 gold companies goes to pay the
salaries and costs of head office management and boards, while financial markets discount the value of
these companies by approximately $21 billion. M&A generally helps lower G&A costs for the company
that got taken out.
RBC writes that by 2025 it sees the gold sector in better shape. It forecasts that margins will improve and
that output will be broadly flat due to the inability to stop the decline of reserves. “To deliver improved
margins and sustain mine life, companies will need to stay active in both M&A deal and exploration,
making strategic direction on these fronts critical, in our view.” Output will also continue to fall due to a
lack of new technological developments on how to extract the metal from the ground.
HSBC wrote in a note this week that global mining capex is now two years into a more sustainable and
product-driven cycle and is unlikely to return to levels last seen in 2012 during the China commodity
boom due to better capital discipline. According to Mike Wilson, chief U.S. equity strategist at Morgan
Stanley, the S&P 500’s instability to reach new highs relative to gold “raises questions about the quality
of this month’s rally” in stocks, reports Bloomberg. As seen in the chart below, the S&P 500 divided by
the price of gold has fallen in 2019, indicating gold is beginning to outpace the broader markets.
 click to enlarge

Threats
Bloomberg’s Liz Capo McCormick writes that there is not enough cash on hand at major Wall Street
firms to meet the funding demands of a market trying to absorb record Treasury bond sales needed to
cover U.S. budget deficits. She adds that there isn’t enough liquidity and that there are deep structural
problems in the money markets. The big catalyst causing the squeeze in repo liquidity is the big swath of
new Treasury debt that settled into the marketplace just as cash left due to quarterly tax payments to the
government.
The liquidity issue as discussed above could get worse. Bloomberg’s Stephen Spratt reports that the
dollar-funding squeeze, which rocked short-term interest rate markets this week, may deepen further due
to the upcoming quarter end when banks usually start their pattern of cutting back on providing
liquidity. Another round of Treasury auctions next week could leave markets short of another $45 billion
in cash. Spratt writes that those two factors could explain why stress is showing up in bill sales and
currency markets even after the Fed took measures to ease a liquidity shortage.
The Organization for Economic Cooperation and Development (OECD) cut almost all economic forecasts
it made just four months ago as intensifying trade conflicts have sent global growth momentum
tumbling. The organization forecasts world growth at 2.9 percent this year, a level not seen since the last
financial crisis.
Index Summary
The major market indices finished down this week. The Dow Jones Industrial Average lost 1.05 percent.
The S&P 500 Stock Index fell 0.52 percent, while the Nasdaq Composite fell 0.72 percent. The Russell
2000 small capitalization index lost 1.17 percent this week.
The Hang Seng Composite lost 2.76 percent this week; while Taiwan was up 0.94 percent and the KOSPI
rose 2.07 percent.
The 10-year Treasury bond yield fell 18 basis points to 1.719 percent.

Domestic Equity Market

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Strengths
 Utilities was the best performing sector of the week, increasing by 2.20 percent versus an overall decrease
of 0.51 percent for the S&P 500.
Incyte Corp was the best performing stock for the week, increasing 6.25 percent.
Datadog Inc.’s IPO was a huge success with a market debut that stood out as one of the best so far this
year. The shares opened more than 49 percent above the $27 offering price, the seventh largest first day
pop among technology IPOs in 2019.

Weaknesses
Consumer discretionary was the worst performing sector for the week, decreasing by 2.16 percent versus
an overall decrease of 0.51 percent for the S&P 500
Fedex Corp was the worst performing stock for the week, falling 14.54 percent.
OxyContin maker Purdue Pharma filed for bankruptcy protection. Purdue reached a tentative deal to
resolve lawsuits with 24 states and five U.S. territories, as well as the lead lawyers for more than 2,000
cities, counties and other plaintiffs, the company said.

Opportunities
Risk appetite may be set to improve, at least according to one indicator. The Citi U.S. Economic Surprise
Index, which measures data surprises relative to market expectations, climbed above zero last week for
the first time since February. If that move is sustained, a reversal in the downtrend for 10-year Treasury
yields may be on the way, and that could in turn be a positive for risk assets, particularly stocks.
Toyota is working on an innovative solar-powered electric car that can run forever and never needs
charging. The Japanese car giant has partnered with Sharp and NEDO (New Energy and Industrial
Technology Development Organization of Japan) to create the vehicle.
Fitbit is in talks with investment bank Qatalyst Partners about exploring a potential sale, according to
Reuters. The company’s stock surged 7 percent on the news of the possible deal.

Threats
Video game retailer GameStop is closing 180 to 200 of stores as it attempts to stay afloat. GameStop CFO
Jim Bell said he expects a "much larger" group of stores will be closed in the next one to two years.
FedEx disappointed shareholders again by slashing its profit outlook. At least four analysts downgraded
the company, sending shares tumbling Wednesday by the most in four years. While FedEx said trade
tensions were weakening the global economy and sapping demand for parcel deliveries, the company’s
critics emphasized “elusive’’ business execution, an insufficient grip on costs and “acquisition debacles.”

Uber and Lyft just took a major blow in California, and now they're gearing up for war. California
lawmakers approved a landmark bill that would force gig-economy companies like Uber, Lyft and others
to treat many workers as employees instead of independent contractors, throwing their business models
into question.

The Economy and Bond Market

Strengths
The U.S. economy is outperforming expectations by the most this year, offering a fresh rebuttal to last
month’s resurgent recession fears fueled by the trade war and a manufacturing slump. The Bloomberg
Economic Surprise Index reached an 11-month high after four indicators released Thursday, including
existing home sales and jobless claims, each surpassed expectations. The gauge continued to advance
after swinging to positive from negative on Tuesday for the first time this year.
U.S. factory output increased in August by more than forecast in a broad advance that signals
manufacturing may be starting to stabilize. Production at manufacturers rose 0.5 percent, Federal
Reserve data showed Tuesday, exceeding the median estimate in a Bloomberg survey of economists, after
falling the prior month. Total industrial production, which also includes output at mines and utilities,
increased 0.6 percent, the most in a year as crude oil extraction bounced back after Hurricane Barry
depressed drilling in the Gulf of Mexico a month earlier.
U.S. home construction surged in August to the fastest pace since mid-2007 on more apartment projects
and single-family houses, a welcome sign for the housing sector that has struggled to gain momentum.
Residential starts climbed 12.3 percent to a 1.36 million annualized rate after an upwardly revised 1.22
million pace in the prior month, according to government figures released Wednesday.

click to enlarge

Weaknesses
China's slowdown deepened in August: industrial output growth fell to a 17 and a half year low. Despite a
slew of growth-boosting measures since last year, the world's second largest economy has yet to stabilize,
and analysts say Beijing needs to roll out more stimulus to ward off a sharper slowdown.
Oil spiked as much as 20 percent after a sudden attack on Saudi oil supplies over the weekend. The attack
affected almost 6 million barrels of daily production or about 5 percent of global output.
 The liquidity issue as discussed above could get worse. Bloomberg’s Stephen Spratt reports that the
dollar-funding squeeze, which rocked short-term interest rate markets this week, may deepen further due
to the upcoming quarter end when banks usually start their pattern of cutting back on providing
liquidity. Another round of Treasury auctions next week could leave markets short of another $45 billion
in cash. Spratt writes that those two factors could explain why stress is showing up in bill sales and
currency markets even after the Fed took measures to ease a liquidity shortage.

Opportunities
President Donald Trump said on Monday the United States has reached an initial trade agreement with
Japan. In a letter to Congress released by the White House, Trump said he intends to enter into the deal
on tariff barriers in the coming weeks.
Next week, all eyes will be on economic releases, kicking off with the preliminary Markit PMIs for
September on Monday.
The data barrage intensifies on Friday, with personal income and spending numbers, the core PCE price
index and durable goods orders.

Threats
The Organization for Economic Cooperation and Development (OECD) cut almost all economic forecasts
it made just four months ago as intensifying trade conflicts have sent global growth momentum
tumbling. The organization forecasts world growth at 2.9 percent this year, a level not seen since the last
financial crisis.

“While risks clearly exist related to trade and geopolitical concerns, lowering rates to address uncertainty
is not costless,” says Federal Reserve Bank of Boston President Eric Rosengren. “Additional monetary
stimulus is not needed for an economy where labor markets are already tight, and risks further inflating
the prices of risky assets and encouraging households and firms to take on too much leverage.”
The CEO of Pimco, which manages $1.8 trillion, says the U.S. economy will slow to just 1 percent growth
in 2020.

Energy and Natural Resources Market

Strengths
 The best performing major commodity for the week was crude oil, which gained 5.91 percent. Oil had its
best weekly gain since January after Brent crude oil had its biggest-ever one day jump, according to
Bloomberg data. Crude prices spiked early in the week after attacks on Saudi Arabia’s processing facilities
over the weekend disabled 5 percent of global supply. The nation vowed to restore production within the
next few weeks.
According to a report from EnergySage Inc., the average cost for U.S. homeowners to install rooftop solar
systems fell below $3 per watt for the first time ever, which is 23 percent lower than the cost five years
ago. Overall, solar energy is becoming more affordable and is being installed globally even without
subsidies. BloombergNEF reports that several European nations continue to build solar farms as
developers become increasingly efficient and drive down costs. Spain is building 2,484 megawatts worth
of subsidy-free solar projects while Italy has 569 megawatts in the works.
Russia and Ukraine signaled progress toward an agreement to transport natural gas into Europe.
Bloomberg reports that energy ministers from the two nations met with European Union (EU) officials
and all voiced optimism that they could overcome tensions that have threatened to halt contracts needed
to ensure gas keeps flowing into Europe from Russia. At least 14 countries get half of their gas from
Russia, which is transported through Ukraine.

Weaknesses
The worst performing major commodity for the week was iron ore, which fell 6.94 percent. Steelmakers
globally are feeling the pain of slowing growth, a dragged out trade war and higher iron ore prices from
the first half of the year. Bloomberg reports that U.S. Steel joined Nucor and Steel Dynamics in reducing
its outlook for the quarter. The company has fallen almost 40 percent so far this year. Bloomberg reports
that Japan’s top steelmakers, Nippon Steel Corp. and JFE, warned last month that full-year profit will
drop. Europe’s ArcelorMittal also cuts its estimate for global demand growth.
Zambia, the world’s second-largest copper producer, could double power tariffs to offset a shortfall from
its drought-stricken hydropower dams, reports Bloomberg. The nation has an electricity deficit of more
than 700 megawatts and wants to import electricity from South Africa. However, it would cost
significantly more. Mining companies account for about half of Zambia’s power demand and have yet to
be impacted by power cuts. The increase in prices would negatively affect the companies by increasing
their costs for operating in the country.
Although the world’s biggest manufacturer of fuel from coal is making changes to improve profitability, it
is still struggling with the global move away from the fossil fuel. Sasol Ltd. announced this week that it
plans to sell its South African coal-mining business, reports Bloomberg. The company produces about 40
million tons of coal a year from its mines. The company is facing cost overruns and delays at its giant
Louisiana chemicals project that the company hopes will transform its production mix to focus on
chemicals. Sasol shares have fallen 48 percent in the past year.

Opportunities
 There was a range of good news in the wind energy space this week. According to a statement on
Thursday, Denmark-based Orsted A/S plans to use 12-megawatt turbines made by GE for projects off the
coast of Maryland and New Jersey. Bloomberg reports that the turbines are 853 feet long—almost as tall
as New York’s Chrysler building. The cost of offshore wind continues to fall, especially in England. The
world’s biggest offshore wind park planned off the coast of England will likely generate power cheaper
than coal in the next decade, writes William Mathis. Lastly, wind power in Texas is about to surpass coal.
According to a report from Rystad Energy, wind power is forecast to generate 87 terawatt-hours of
electricity in 2020, which is greater than the expected 84 terawatt-hours from coal.

Investors, and teenagers, are demanding government action on climate change. Greta Thunberg, a 16-
year-old environmental activist, backed a global movement that went underway on Friday where
students in Europe, Australia and elsewhere are skipping school and workers are walking off jobs to
demand action on climate change. Investors are also calling for change. On Wednesday a group of
investment managers who oversee $16 trillion in assets called on companies to implement anti-
deforestation policies for their supply chains, reports Bloomberg. Stephanie Pfeifer, CEO of the
Institutional Investors Group on Climate Change, said “climate change is such a critical issue for
investors’ portfolios and there are so many risks associated with it and also huge opportunities.”
With the rise of cheaper renewable energy, nuclear power plants are looking to make more than just
power, reports Bloomberg’s Will Wade. FirstEnergy Corp, Xcel Energy Inc. and Pinnacle West Capital
Corp. are planning to use reactors to produce hydrogen as a part of a U.S. Energy Department program
aimed at helping the industry develop new sources of revenue.

Threats
Over the weekend, Saudi Arabia suffered strikes on its oil processing plants that forced the kingdom to
shut down half of its production, which led to 5 percent of the world’s supply being cut off. Although the
nation claims that production will be back up and running in just a few weeks, there could be further
geopolitical trouble. There are disagreements over who initiated the attack as Saudi Arabia suggested
Iran is behind it while Yemen’s Houthi movement claimed responsibility. U.S. Secretary of State Mike
Pompeo accused Iran of carrying out an “act of war.”
 click to enlarge

European Trade Commissioner Cecilia Malmstrom told a conference in Brussels on Friday that relations
are tense between the U.S. and the EU regarding auto tariffs, reports Bloomberg. Malmstrom said, “We
firmly reject that we are a security threat. That is absurd. If there will be tariffs there, we would take
countermeasures.” Last year, tensions rose between the powers after President Trump imposed tariffs on
steel and aluminum, among other goods, after citing security threats. The EU then retaliated with tariffs
on American goods. According to the European Commission, a 25 percent tax on foreign cars by the U.S.
would add 10,000 euros to the price of EU vehicles imported.
Indonesia is experiencing a particularly bad year for forest fires, reports Bloomberg News. The fires are
largely caused by illegal slash-and-burn methods to clear farmland for palm oil, pulpwood and rubber
trees. Almost 3,000 hotspots were detected in mid-September and over 320,000 hectares of land have
burned in the first eight months of this year. The fires could have a big impact on Indonesia’s economy,
the world’s largest producer of palm oil, as the fires disrupt operations at plantation and mills.
Emerging Europe
Strengths
Romania was the best performing country this week, gaining 2.3 percent. The country is preparing for
presidential elections in November. Despite recent political noise, economic growth has been robust.
Second quarter GDP surprised to the upside with Romania recording strong growth of 4.4 percent. Year-
to-date Romanian equites are up 21 percent.
The Russian ruble was the best performing currency this week, gaining 80 basis points against the U.S.
dollar. The ruble appreciated alongside the price of crude oil, which increased sharply this week after
Saudi Arabia’s oil production facilities were attacked by drones, removing more than 5 percent of global
oil supply from the market.
Energy was the best performing sector among eastern European markets this week. Motor Oil, a Greek
refinery, was the best preforming equity gaining more than 6 percent.

Weaknesses
Turkey was the worst performing country this week, losing 2.8 percent. The attacks on Saudi Arabia’s oil
production could delay Turkey’s efforts to bring down inflation and stimulate growth as oil prices may
stay elevated. Turkey imports almost all of its energy needs. Moreover, further escalation of tensions in
the Middle East could push the lira lower against the U.S. dollar.
The Polish zloty was the worst performing currency in the region this week, losing 65 basis points. On
Friday, the zloty dropped sharply after the EU Court of Justice set October 3 as a date for its final ruling
regarding swiss franc loans. The courts’ final decision may negatively impact the market value of the
Polish banking industry’s $33 billion portfolio of non-zloty denominated mortgages.
Industrial was the worst performing sector among eastern European markets this week. Tekfen, a
Turkish construction Company, was the worst preforming equity losing more than 9 percent.

Opportunities
 The aforementioned drone attack on Saudi Arabia’s oil production facilities could push oil prices higher,
and higher oil prices will be beneficial to oil producing countries, such as Russia. The currencies of the oil
producing nations are likely to outperform near-term as well. In Emerging Markets, the Colombian peso
and Russian ruble have the strongest correlation with Brent crude oil.
The German economic outlook improved in September. The ZEW Survey Expectation Index was reported
at negative 22.5, up from the eight-year low of minus 44.1 it reported in August. The stronger data could
indicate concerns eased about the impact of the U.S. – China trade war and Brexit. However, the results
of the survey were still gloomier than the long-term average.
JPMorgan initiated a research report on Greek banks, recommending an overweight position in
Eurobank and National Bank of Greece. Their call is based on the macro recovery, which is still in an
early state and fragile, but they like the banks’ progress on reduction of bad loans. They added that the
market likely underestimates the magnitude of bad debt reduction and how soon it will feed through.

Threats
The ECB’s chief economist said in a prepared speech in London on Monday that incoming information is
signaling a more extended slowdown in Euro area growth dynamics than previously expected. The ECB
once again reiterated that it would do whatever it takes to stimulate the economy and raise inflation. If
needed, the bank will further lower the deposit facility rate and the money market rate.
Financial Times reported that European lenders are facing deeper cost cuts and consolidation after the
ECB announced a prolonged stretch of negative interest rates last week. The newly announced tiering
system designed to shield a portion of lenders’ deposits at the ECB from negative rates will barely offset
the lost earnings from lower base rates.
Eastern Europe has a highly skilled work force, but people still leave their home countries to look for
better work opportunities elsewhere, mostly due to corruption and lower pay compared to other nations.
Brain drain is a common problem for Romania, Ukraine and Serbia. It contributed to 600,000 people
from these three countries combined leaving in 2016 for better jobs and life prospects around the world.
That is three times more than the outflow in 2000, according to the Organization for Economic
Cooperation and Development.

click to enlarge

China Region
Strengths
The best performing indices in the region for the week were Korea’s KOSPI, up 2.07 (although the index
was closed the 12th and 13th last week) and Taiwan’s Capitalization Weighted Stock Index, which was up
1.13 percent since its return from holiday. Vietnam’s Ho Chi Minh was up 43 basis points; Malaysia’s
KLCI rose 13 basis points. Of special note are India’s NIFTY and SENSEX Indices, which jumped by 1.91
and 1.68 percent on the week, respectively, in a massive surge on Friday following the government’s
announcement of a major stimulative corporate tax cut.

click to enlarge

The best-performing sector in Hong Kong’s Hang Seng Composite Index was consumer services, which
climbed 4.04 percent on the week.
Singapore’s non-oil domestic exports jumped 6.7 percent for the August measurement period,
outperforming expectations for a gain of only 1.6 percent and rising the prior period’s revised growth of
3.5 percent.

Weaknesses
 The worst-performing index in the region was Hong Kong’s Hang Seng Composite, which declined by
2.76 percent on the week.
The laggard sector in Hong Kong’s Hang Seng Composite Index this week was financials, which fell 3.73
percent.
We continued to see a degree of weakening in Chinese data. Retail sales clocked in at only a 7.5 percent
year-over-year growth rate, shy of expectations for a 7.9 percent print. Industrial output for the same
period was up only 4.4 percent, below consensus for a 5.2 percent showing, and FAI came in at only 5.5
percent through the first eight months of the year.

Opportunities
In what has of late developed into a regularly weekly comment, there remains opportunity for a degree of
resolution to the U.S.-China trade war, which could potentially have immediate positive effects upon
investor sentiment and add more corporate certainty. While it seems unlikely things will change
overnight, the relative centrality of the U.S.-China trade issues and the size of the two juggernaut
economies mean collectively that any positive developments, resolution, interim deal, etc. could well
provide markets a boost.
Taiwan’s TWSE now lies only about 1.5 percent off its 52-week highs, bouncing back strongly and sharply
from its August trading range lows.
North Korean leader Kim Jong Un sent President Donald Trump a letter, various media sources are
reporting this week, in which Kim offered for President Trump to visit Pyongyang and announced hopes
for a third summit between the two leaders.

Threats
In keeping with this section’s views, we once again reiterate that trade war escalation must remain a
threat until it isn’t. Latest developments in the week as of time of writing involved the Chinese
cancellation of a planned tour through U.S. farmland as well as an announcement by President Trump
that he has no interest in a partial deal. The two sides, which began talks again this week, are—so far as
we know right now—still planning on high-level talks in mid-October, shortly after Chinese holidays and
shortly before the (as-of-now-delayed) implementation of the October 1 tariff hike that was pushed back
to October 15.
As unrest has continued in Hong Kong, Bloomberg News reported that air traffic in the city declined by
12 percent for the August measurement period as the violence and protests continue to take a clear toll on
the SAR. Moody’s Investors Service lowered its outlook to negative from stable for Hong Kong, though it
did affirm the Aa2 rating. More protests are scheduled for this upcoming weekend.
The U.S. dollar remains relatively strong, which could create headwinds for emerging markets already
caught, to some degree, amid a degree of slowing global growth and trade uncertainty.

Blockchain and Digital Currencies

Strengths
 Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended September
20 was Silverway, up 279.48 percent.
In a Tuesday press release, Wells Fargo announced the development of a U.S. dollar-linked stablecoin
that will run on the firm’s first blockchain platform. The tokenized dollar, Wells Fargo Digital Cash, will
be used in a pilot initially for internal settlement across the company’s business, CoinDesk reports. Even
the company’s international locations will be able to move funds using the token.
Argo Blockchain, which trades publicly on the London stock exchange, announced the installation of
1,000 more mining machines, according to a report on September 19. The new machine count would take
the company’s total number of miners to 6,000, reports Coindesk, and Argo plans to acquire another
6,000 of them in the next two quarters.

Weaknesses
Of the cryptocurrencies tracked by CoinMarketCap, the best performing for the week ended September
20 was Opennity, down 37.74 percent.
In an announcement on September 13, the U.S. Department of the Treasury sanctioned three North
Korean entities for cyber crimes, reports CoinDesk, mentioning cryptocurrency thefts as one of the
reasons for the action. The entities are believed to be responsible for the theft of $571 million worth of
cryptos from five exchanges in Asia in 2017 and 2018.
As reported by Tech.co, Facebook’s Libra cryptocurrency has “hit another snag.” Both France and
Germany have decided to block its launch in their respective countries over concerns that the social
media giant is overstepping its authority, the article explains.

Opportunities
OpenSC, a joint venture and blockchain startup, announced Monday $4 million in seed funding for
ethical supply chain management to track goods for ethical malpractice, reports CoinDesk. According to
incoming OpenSC CEO Markus Mutz, the capital will be used to further develop blockchain-based
suppky chains such as overfishing and human rights violations.
After receiving final regulatory approval, messaging app LINE has officially launched a cryptocurrency
exchange, dubbed Bitmax, which will service its 80 million users based in Japan, reports CoinDesk. In a
statement on Tuesday, the Shinjuku-based messaging provider said the service is now live with trading of
five crypto assets including bitcoin, ethereum, ripple, bitcoin caseh and litecoin.
Despite bitcoin erasing gains, Ethereum has been able to extend its momentum. The cryptocurrency has
been able to break above the $200 mark, which will likely prove to be a key support level in the near
term.
 click to enlarge

Threats
At this week’s Gartner IT Symposium/Xpo, analysts at Gartner have been discussing how businesses and
IT leaders can create value from blockchain technology. According to a press release from the group,
however, lack of interoperability standards could prevent deployment of this technology across financial
services ecosystems for at least three years. “Blockchain standards for financial services companies are
currently fragmented and immature,” senior research director at Gartner Fabio Chesini said. “We are
three to five years until standards mature and settle.”
According to a September 17 filing, the Cboe BZX Exchange withdrew its VanEck/SolidX bitcoin ETF
proposal, just weeks after VanEck and SolidX began offering shares of the Trust to qualified institutional
buyers. As reported by CoinDesk, a decision on the proposal had already been delayed numerous times,
and a final deadline of approval or rejection by the SEC was set for October 18 – which could have made
this one of the very first bitcoin ETFs in the country.
The world’s seventh-largest blockchain by market cap, EOS, has a value topping $3 billion since February
2019. As CoinDesk explains, however, the project “has long been plagued by fears that its structure was
too centralized, and now the lion’s share of entities that govern the chain are in China, prompting fears of
state intervention.”

Leaders and Laggards

Weekly Performance
 Weekly Weekly
Index Close Change($) Change(%)
S&P/TSX Global Gold Index 251.09 +15.62 +6.63%
Gold Futures 1,523.40 +23.90 +1.59%
Natural Gas Futures 2.54 -0.07 -2.87%
S&P/TSX VENTURE COMP IDX 589.52 +0.36 +0.06%
10-Yr Treasury Bond 1.72 -0.18 -9.43%
Nasdaq 8,117.67 -59.04 -0.72%
Oil Futures 58.09 +3.24 +5.91%
Hang Seng Composite Index 3,571.07 -101.54 -2.76%
S&P 500 2,991.73 -15.66 -0.52%
DJIA 26,935.07 -284.45 -1.05%
Korean KOSPI Index 2,091.52 +42.32 +2.07%
Russell 2000 1,559.69 -18.45 -1.17%
S&P Energy 452.25 +4.44 +0.99%
S&P Basic Materials 366.12 -3.19 -0.86%
XAU 94.60 +5.11 +5.71%

Monthly Performance

Monthly Monthly
Index Close Change($) Change(%)
Natural Gas Futures 2.54 +0.37 +17.00%
S&P/TSX Global Gold Index 251.09 -1.64 -0.65%
10-Yr Treasury Bond 1.72 +0.13 +8.11%
Oil Futures 58.09 +2.41 +4.33%
Gold Futures 1,523.40 +7.70 +0.51%
S&P 500 2,991.73 +67.30 +2.30%
S&P Energy 452.25 +25.17 +5.89%
Hang Seng Composite Index 3,571.07 +50.74 +1.44%
DJIA 26,935.07 +732.34 +2.79%
Korean KOSPI Index 2,091.52 +126.87 +6.46%
Nasdaq 8,117.67 +97.47 +1.22%
S&P Basic Materials 366.12 +11.52 +3.25%
Russell 2000 1,559.69 +49.84 +3.30%
S&P/TSX VENTURE COMP IDX 589.52 +13.62 +2.36%
XAU 94.60 +0.07 +0.07%

Quarterly Performance

Quarterly Quarterly
Index Close Change($) Change(%)
Natural Gas Futures 2.54 +0.35 +16.20%
10-Yr Treasury Bond 1.72 -0.31 -15.28%
DJIA 26,935.07 +181.90 +0.68%
Oil Futures 58.09 +1.44 +2.54%
S&P 500 2,991.73 +37.55 +1.27%
Gold Futures 1,523.40 +115.10 +8.17%
S&P Energy 452.25 -14.49 -3.10%
Nasdaq 8,117.67 +66.33 +0.82%
 Quarterly Quarterly
Index Close Change($) Change(%)
Korean KOSPI Index 2,091.52 -39.77 -1.87%
S&P Basic Materials 366.12 +3.14 +0.87%
Russell 2000 1,559.69 -3.80 -0.24%
Hang Seng Composite Index 3,571.07 -218.74 -5.77%
S&P/TSX Global Gold Index 251.09 +34.61 +15.99%
S&P/TSX VENTURE COMP IDX 589.52 -3.74 -0.63%
XAU 94.60 +12.81 +15.66%

U.S. Global Investors, Inc. is an investment adviser registered with the Securities and Exchange Commission ("SEC"). This does not mean that we
are sponsored, recommended, or approved by the SEC, or that our abilities or qualifications in any respect have been passed upon by the SEC or
any officer of the SEC.

This commentary should not be considered a solicitation or offering of any investment product.

Certain materials in this commentary may contain dated information. The information provided was current at the time of publication.

Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and
is not responsible for their content.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by
one or more accounts managed by U.S. Global Investors as of (06/30/2019):

Tekfen Holding AS
Eurobank Ergasias SA
National Bank of Greece SA
Motor Oil Hellas Corinth Refin
IAMGOLD Corp
Newmont Goldcorp Corp
Torex Gold Resources Inc

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment. The
Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The S&P 500 Stock
Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Nasdaq Composite Index is a
capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The Russell 2000 Index® is a U.S. equity index measuring the
performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index. The Hang Seng Composite Index is a
market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market
cap for the 12 months. The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan
Stock Exchange. The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock
Exchanges. The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies
involved in the mining of gold and silver. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S.
dollar. The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25
percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. The S&P 500 Energy Index is a
capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500. The S&P 500 Materials Index is a
capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500. The S&P 500 Financials Index is a
capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The S&P 500 Industrials Index is a
Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500. The S&P 500
Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the
S&P 500. The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology
sector as a subset of the S&P 500. The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the
companies in the consumer staples sector as a subset of the S&P 500. The S&P 500 Utilities Index is a capitalization-weighted index that tracks
the companies in the utilities sector as a subset of the S&P 500. The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the
companies in the healthcare sector as a subset of the S&P 500. The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted
index that tracks the companies in the telecom sector as a subset of the S&P 500. The NYSE Arca Gold Miners Index is a modified market
capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The Consumer Price
Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by
individuals. The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the
economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier
deliveries and the employment environment. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital
market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove
companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05%
of the index. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a
specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays,
investments and exports less imports that occur within a defined territory.

A basis point, or bp, is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or
0.01% (0.0001). The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division—
previously, Korea Stock Exchange—of the Korea Exchange. The Taiwan Capitalization Weighted Stock Index is a stock market index for
companies traded on the Taiwan Stock Exchange (TWSE). The Vietnam Stock Index or VN-Index is a capitalization-weighted index of all the
companies listed on the Ho Chi Minh City Stock Exchange. The FTSE Bursa Malaysia KLCI, also known as the FBM KLCI, is a capitalization-
weighted stock market index, composed of the 30 largest companies on the Bursa Malaysia by market capitalization that meet the eligibility
requirements of the FTSE Bursa Malaysia Index Ground Rules. The NIFTY 50 index is National Stock Exchange of India's benchmark broad
based stock market index for the Indian equity market. Sensex, otherwise known as the S&P BSE Sensex index, is the benchmark index of the
Bombay Stock Exchange (BSE) in India. The Citigroup U.S. Economic Surprise Index is a quantitative measure of economic news. It is defined as
a weighted historical standard deviation of data surprises (actual releases versus the Bloomberg survey median). A positive reading of the
Economic Surprise Index suggests that economic releases have on balance [been] beating consensus. It is calculated daily in a rolling three-
month window.
U.S. Global Investors, Inc. is an investment adviser registered with the Securities and Exchange Commission ("SEC").
This does not mean that we are sponsored, recommended, or approved by the SEC, or that our abilities or qualifications in
any respect have been passed upon by the SEC or any officer of the SEC.
This web page should not be considered a solicitation or offering of any investment product.

Certain materials on the web page may contain dated information. The information provided was current at the time of publication.

Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their
content.

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