GRCAF - Trump Gets a Thumbs Up from US Gold Companies
US President Donald Trump is now well into the final year of his term in office, and a lot has happened since he took the reigns — though in the resources sector perhaps the biggest splash he’s made has been with the trade war.
Experts and analysts focusing on each commodity have had something to say about the trade war ever since, with negotiations never far from headlines and downturns in commodity prices often attributed to the uncertainty that came with the tit-for-tat actions taken by both sides.
Trump himself has been unapologetic about the disruptions, saying back in 2018 that trade wars were “good” and “easy to win.”
One commodity that remained close to the top of headlines and seemingly benefitted from the drama during all the turmoil was gold — a well-known, tried and true safe haven commodity that pins its worth to its reputation as a preserver of wealth when everything else is going to hell.
As 2016 drew to a close, gold was valued at US$1,150 per ounce, and since August 2019 it has shot up (for the most part) above US$1,500 — some of the highest values for the precious metal since early 2013.
Where the credit falls for such values is confusing, however — and not answered here. Normally a high gold price should mean a weak stock market, but as it stands the stock market has been performing well since Trump took office, a fact that’s not lost on the man himself.
The Investing News Network took the opportunity at the recent Vancouver Resource Investment Conference (VRIC) to ask US-based gold companies present whether Donald Trump had been good for the US gold industry and if they gave him any credit for the rise in gold’s value over time, especially given his apparent ability to influence the stock markets with mere tweets.
INN approached representatives from six companies with interests in American gold, and the overwhelming consensus was that yes, Trump was good for American gold, but not because of gold’s price — rather, because of his penchant for cutting red tape.
“He’s streamlining the regulatory process,” said Steven Osterberg, who is president and CEO of Timberline Resources (TSXV:TBR,OTCQB:TLRS), which explores and develops copper and gold projects in Nevada.
“It’s not something that happens overnight, (but he’s) clearly maneuvering the ship in the right direction,” he added.
Trey Wasser, who is president and CEO of Ely Gold (TSXV:ELY,OTCQB:ELYGF) agreed, saying that the “number one thing” that Trump had done that was good for the industry was shortening permitting timeframes.
Wasser added that part of that process was the shortening of time frames on the environmental side as well, which he conceded was “maybe more fricticious with the left.”
But more on that later.
CEO of Peloton Minerals (CSE:PMC,OTCQB:PMCCF) Ted Elwood said that for his company they had “seen the turnaround time in applications we made with the government accelerate,” while the CEO of Aston Bay (TSXV:BAY,OTCQB:ATBHF) Thomas Ulrich said that whether it’s true or not that Trump had sped up the process, “it’s easier to get permits if you need them.”
“There’s a perception that mining should be easier,” he added.
Peloton has interests in Nevada and Montana, while Aston Bay has properties in Virginia.
Randall Moore, who is vice president of exploration at Gold Springs Resource (TSX:GRC,OTCQB:GRCAF), which has gold and silver interests in both Nevada and Utah, was also on the permitting bandwagon, saying that first and foremost the shortening of the permitting process was what the industry was most appreciative for.
Moore also touched on environmental side of things, saying that the Trump administration had taken steps to “roll back some of the sage grouse restrictions.”
He said that this was more of a push for regulatory decisions to be made on a state level rather than in Washington.
“He’s pushing a lot of the decision making down to the states … (and) expanded (the ability) of states to regulate.”
Wasser also elaborated on his comments on the environmental permitting side, saying that from the industry’s point of view, the Environmental Protection Agency (EPA) had been taking too many liberties with regulation, and that that was changing under Trump.
“The EPA is there to enforce policy, not make policy and laws … they have been regulating beyond their edict,” he said. “(We) don’t want to see abandonment of environmental rules, but the EPA needs to back off.”
When queried about the president’s perceived volatility when it came to the global markets and the rising value of gold, each company representative waved away any credit to Trump himself.
“I don’t really think Trump has done anything to drive gold up or down,” said Wasser. “I don’t think I’d give him any credit there. … Geopolitical spikes in the gold price tend to always get brought back. Other things that would move gold higher is a bad stock market, and we’ve had nothing but a good stock market under Trump.”
Osterberg also threw the credit for the higher gold price and interest in the precious metal to other events around the world, and Ulrich said that while Trump’s volatility and perceived influence on the gold price “may be part of what’s happening in the background,” he would “expect currency and exchange rates to play a bigger role.”
Elwood handed the credit to geopolitics as well. “The long-term trend is upward for gold. It’s going to bounce around in the short-term with geopolitical events, but upwards.”
As of writing, we’re now in the second month of 2020 — the last year of Donald Trump’s first term in office — and the 2020 election is chugging along as if in full swing already, despite being more than 10 months out.
Trump is campaigning heavily on his economic promises, and it’s not unusual to hear many in the mining industry expressing concern for the future direction of the industry under, say, a Bernie Sanders or Elizabeth Warren presidency.
However the year goes, pundits, experts, talking heads and executives are confident that gold will go up regardless, so gold companies will have something to be happy about beyond the November election, whatever the result.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Peloton Minerals is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.