Because it transforms Telfer from a near bankrupt loss making basket case INTO a massive power house top 3/4/5 Australian producer.
All else equal - nothing matters more to GGP for the next 2 years than the gold price (and producing decent replacement ore)
A year ago I wrote a post on here entitled 'Welcome to Goldilocks for Gold' - https://www.ggpchat.co.uk/viewtopic.php?t=855 where I outlined the case as to why gold had to go a lot higher.
This is why the situation that's incoming is one that is about to shock the world (apart from our resident Speedy 'Bunker' Meady that is
) : I'm now seeing $5000 to $8000 gold emerging, faster than most can believe. Today FT says Gold glitters as the unimaginable becomes imaginable. And if we can have 5000 gold and we can have $100,000 bitcoin... then TBF, why can't we have $10,000 or 20,000 or 50k gold?I don't talk of exponential rises in anything (bar the negative impact of social media on teens and children). BUT What I do see is reality: a world economy that has SO not recovered from the lost decade scale economic shock of the global covid shutdown, fraught with political unrest and change, and whose people are struggle daily with the brutal daily impact of inflation and high interest rates - inflation that wont ever be reversed - so saying it’s slowing seems simply disingenuous and frankly makes no odds... (fact is Prices are never going back). Meanwhile governments have been hell bent delusional on pretending 'the recovery was progressing well'. The truth was far from that. Mortgage rates have more or less frozen the housing market stone dead. China has collapsed, And where is our wealth all tied up…? And while nominal house prices are up, Inflation adjusted housing prices are back 2003 levels. big jobs loses are now a growing theme'. This morning My wife's new spectacles cost almost £700 (she an astigmatism) but ffs. I literally spat my cornflakes out.
BUT yes the Gold price is going nuts.
Some interesting articles are now appearing in mainstream media , attempting to explain this move; talking of tariffs and other such distractions - but some appear to be contemplating the impossible. That thing the 'gold bugs' have professed for years….
Because some of the thinking , is for Trump to revalue US gold.
Todays FT for example debates the situation succinctly: hTTps://www.ft.com/content/f6459ed1-8a6 ... e8546912f0
Thinking the article through , 1) it makes total sense for the US to allow or to push gold a lot higher, before revaluing it to the asset side at $2,800 an ounce — this could inject $800bn into the Treasury General Account. (Obviously $5k and gold could inject $1.6 trillion and 10k gold $3.4 trillion ).
2)“House Republicans are mulling a massive tax and spending bill that would add “up to $5.5tn of net primary deficit increases” and “boost interest costs by about $1.3tn over the next decade” = ie spark bond market alarm this spring = market buys gold.
3) Luke Groman’s point: “The contradiction could be resolved if the Treasury tolerated, or enabled, gold to keep surging” IE Gold likely to be the key pivot in the new system Trump is trying to engineer - and it would perhaps seems to support the idea floated by republican FED reserve nominee Judy Shelton - of “the new gold backed long dated Treasury bond” but in coordination with a deliberate dollar devaluation = all good for US industry and good for gold = good for the US balance sheet and debt situation.
4) This all Keeps the 'wheels on the wagon' and the world buying US debt. Then, if Brics and China and now the US see an increased role for Gold = more competition for gold resources = Gold prices strengthen. A case of if you can't beat them join them - ie US behaves fiscally 'better' and reasserts the reserve currency's status in being part backed by gold. And the higher gold goes, the better it is for the government balance sheet.
So all roads appear to lead to a much higher gold price.
And what that means of Greatland - huge lower grade high volume deposit like TELFER. Thats music my your ears... because low grade high volume producing deposits like Telfer have the highest torque to the gold price.
It’s perfect ... it’s literally Goldilocks for Greatland.
https://www.ft.com/content/f6459ed1-8a6 ... e8546912f0
Gold glitters as the unimaginable becomes imaginable
Another week, another record high for the gold price. Cue wild celebration among goldbugs — and frantic speculation from everyone else about the reason for the explosion in demand for the precious metal.
Geopolitical turmoil is one obvious explanation. Inflation concerns amid insane tariff dramas is another. However, there is a third, less noticed, issue bubbling away too: some hedge fund contemporaries of Scott Bessent, the hedgie-turned-US Treasury secretary, are speculating about a revaluation of America’s gold stocks.
Currently, these are valued at just $42 an ounce in national accounts. But knowledgeable observers reckon that if these were marked at current values — $2,800 an ounce — this could inject $800bn into the Treasury General Account, via a repurchase agreement. That might reduce the need to issue quite so many Treasury bonds this year.
This week such chatter intensified after Bessent both pledged to “monetise the asset side of the US balance sheet” — in other words, to focus on assets as much as liabilities — while also promising to lower 10-year Treasury yields.
“Re-marking . . . to current market value would mechanically deleverage the US balance sheet,” says David Teeters, of IESE business school, who notes that if gold prices keep rising, this potential blessing swells. Or as Larry McDonald, a libertarian analyst, notes: “It is time to get creative around . . . Uncle Sam’s balance sheet.”
Will this ever happen? I don’t know. Nor, I suspect, does Bessent, since it is the ever-capricious Donald Trump who sets policy. But the fact that this wild speculation is swirling underscores three key points.
First, investors know that Bessent has an incentive to be creative, given the scary fiscal hole. House Republicans are mulling a massive tax and spending bill that would add “up to $5.5tn of net primary deficit increases” and “boost interest costs by about $1.3tn over the next decade” according to the Committee for a Responsible Fiscal Budget. That could spark bond market alarm this spring, if not a Congressional revolt from populist nationalists. And that hole cannot be plugged just by smashing a tiny agency like USAID (a grotesque move), or letting Elon Musk halt federal payments (also outrageous). “While there are potential cost savings, the only way to create fiscal responsibility is with substantial tax increases,” argues Robert Rubin, former Treasury secretary.
Second, Bessent needs currency tricks as well as fiscal ones. As JD Vance, the vice-president, told Congress last year, Trump’s cabal considers the dollar to be wildly overvalued — to the degree that it is hollowing out the country’s industrial base. They attribute that to its reserve currency status.
But while they would prefer a weaker currency, Trump also wants to retain that global dollar dominance and Bessent himself knows that tariffs will probably strengthen its value.
That makes their policy seem bizarrely contradictory. But some market commentators, such as Luke Gromen, think the contradiction could be resolved if the Treasury tolerated, or enabled, gold to keep surging against the dollar. “Gold is likely to be a key pivot [for] the new system the Trump administration is clearly trying to engineer,” he says.
Many mainstream economists would disagree, but that just illustrates the third key point: the realm of possible policymaking — the so-called Overton window — is now widening. To grasp this, look at a dense investor memo written last year by Stephen Miran, who heads Trump’s Council of Economic Advisers, which is the most thoughtful explanation of Trumpian financial economics that I have seen (echoing ideas largely endorsed by Bessent, among others).
Miran argues that investors should expect tariffs to be used initially as a dramatic negotiating tactic (as they were this week). They will later be deployed as a longer term means of raising revenue and demarcating geopolitical allies. He also contends that the dollar’s reserve status and American military dominance are so tightly entwined that the White House could force countries who enjoy the US security umbrella to finance its deficit by buying very long-dated treasury bonds.
More strikingly, Miran predicts that while tariffs will initially strengthen the dollar, the greenback should eventually fall, even if the White House defends its reserve currency status. How? He outlines several tactics that could be used, including “voluntary” co-operation from the Federal Reserve and a multilateral dollar devaluation accord.
Such ideas might seem mad. And Miran acknowledges that the policy “path” to implement tactics like these “without material adverse consequences” is “narrow”. Quite so. “If they start playing games with a weakening dollar, that is highly risky,” says Rubin. But what Miran’s memo shows is that once-unimaginable ideas are now becoming entirely imaginable. And not just Trump’s threat to invade Greenland.
Thus it is no surprise that gold is outperforming bitcoin right now; nor that traders are flying gold bars from London vaults to New York. Welcome to a financial Alice-in-Wonderland world where buying bullion seems almost sane.
gillian.tett@ft.com