Newcrest merger interest vindicates gold bulls

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Newcrest operates at an all-in sustaining cost of $1082 an ounce, representing a margin of $591 last quarter.

Newcrest Mining is one of many ASX-listed miners that offer investors a yield on gold in the form of dividends, as well as the opportunity for capital appreciation as shares rise in tandem with profits.

Demand for gold is at its highest level in 11 years, according to the latest figures from World Gold Council, aided by the reopening of China and its fabrication industries, with prices in January hitting a nine-month high of $US1937 an ounce. Russia’s Finance Ministry sold 3.6 tonnes of gold from its sovereign reserves in January to support its fiscal position.

This inverse relationship between gold prices and risk-free investment yields is exemplified by tracking US 10-year government treasury bonds and the US dollar gold price.

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