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No pot of gold at the end of the rainbow

After the Trump victory today there was a lot of excitement amongst corporate finance professionals working in the precious metals mining space, as Brexit 1.0 came with a slew of gold miner equity raises with decent investor appetite and few hung deals. As the fees on these raises are quite substantial, especially under the predominantly Canadian bought deal framework, many on the street were expecting to be hit up by their clients to gauge appetite.

Unfortunately, that fell apart fairly quickly as gold pared gains (although still up for the day) and the market became decidedly risk-on after the President-elect’s conciliatory tone and quick action (tax code simplification is already underway, so they say). The Street also decided to turn fear into optimism with the story that the devil you don’t know is a marked improvement due to his pro-business slant (which he has been hammering home without much attention until today).

Gold has lost attractiveness and may continue to remain range-bound as dollar weakness and inflation (positives) are offset by perceived earnings hikes beyond corporate actions (no need for accretion-dilution wizardry) and higher yield on other safe haven assets. Our correspondents will keep the readership posted but for now, no return to the early 2010’s just yet.

Related Readings for Gold

GoldOverview of Senior Gold Producers in Canada · Precious Metals – Gold, Silver and PGM · No pot of gold at the end of the rainbow ·
Matt
ex investment banking associate
https://www.linkedin.com/in/matt-walker-ssh/

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