Everything You Need to Know on Friday: Gold Prices Keep Smashing Records Giving Miners Hope They Can Escape the Doldrums

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,301.40, down 2.03%.

● Canada's population growth was 'too much, too soon,' despite some positives: economist

● Gold prices keep smashing records giving miners hope they can escape the doldrums

● US natural gas spot prices, demand decline, EIA reports

● Stocks to watch: TD Bank

Today, the Canadian dollar is trading at 72.65 cents US, a slight increase from Thursday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,301.40, which is down 2.03% from the previous close.

One economist says that while Canada’s rapid population growth helped to fill job vacancies after the COVID-19 pandemic, it has also spurred rent price inflation and made housing shortages worse.

In a report Thursday, Andrew Grantham, an executive director at CIBC Economics, said that population growth started as an advantage for Canada’s economy but “‘spiraled" out of control” throughout 2023.

“Population growth led by non-permanent residents initially helped to fill elevated job vacancies coming out of the pandemic, but the surge since mid-2022 has also resulted in housing shortages and rent price inflation,” he said in the report.

Grantham estimates that since 2019, Canada’s population growth has risen by around 1.1 million, or 35 per cent, more than housing availability could accommodate. He added that the increase “has eclipsed labour force needs” by between 200,000-700,000, or between five and 20 per cent.

“That suggests a careful balance exists between taming population growth to ease housing inflation and potentially exaggerating issues of labour shortage and thereby creating inflationary pressures in other areas,” the report said.

However, Grantham also highlighted that given the attention on population growth and housing affordability, “it is easy to lose sight of the positive impact that newcomers into the country are having, particularly in the labour market.”

“As the domestic workforce has aged, participation rates have understandably fallen. For persons born within Canada, the participation rate has declined by almost three per cent since 2015,” he said.

The price of gold is smashing records on a near daily basis, yet that somehow hasn’t translated into higher profits for gold miners — at least not yet.

Analysts and portfolio managers who cover gold miners say that after years of underperforming the price of bullion, the sector is finally turning a corner. They have some evidence to support their optimism. The VanEck Gold Miners ETF, made up of the world’s largest gold miners, rose 10.5 per cent in the past month to US$33.17, roughly in line with the increase in the price of the precious metal to US$2,388 per ounce.

“Newmont is now guiding that (gold) production will rise from here and costs will decline,” Citigroup Inc. analysts said in a note on April 3. “This was also the same message in 2021.”

The Colorado-based miner’s free cash flow per share declined every year between 2020 and 2023, even though gold prices rose during that time, Citigroup analysts said. They cited rising costs at mines, increased capital expenditures and declining gold production among the problems, adding some investors have cast doubt on whether Newmont will be able to meet its gold production targets.

Nevertheless, the bank recommended Newmont’s stock while noting it is also bullish on gold.

US natural gas spot prices fell at most locations in the week ended April 17, with the benchmark Henry Hub spot price dropping US$0.38 to US$1.50 per million British thermal units (MMBtu) week over week, the US Energy Information Administration reported on Thursday.

US natural gas demand dropped 11% week-over-week, driven largely by lower residential and commercial sector consumption, the EIA said.

Weekly average front-month futures prices for liquefied natural gas cargoes in East Asia rose US$0.62 to US$10.19/MMBtu, the EIA reported, citing data from Bloomberg Finance. European benchmark Title Transfer Facility gas futures also increased US$1.15 to US$9.73/MMBtu.

US natural gas supply declined 1.5% from the previous week, driven by lower dry gas production and net imports from Canada, the agency said, citing data from S&P Global Commodity Insights.

TD Bank chief executive Bharat Masrani says he hopes to be able to say more soon on the investigation into the bank’s anti-money laundering measures.

Masrani made the remarks as he faced shareholders Thursday at the bank’s annual general meeting, the first since its US$13.4-billion takeover of First Horizon bank fell apart and the bank disclosed that it expects to face penalties from an investigation from U.S. regulators related to its anti-money-laundering program.

“Regretfully, our program was not where it needed to be,” said Masrani. “We know where our issues are, we are working to fix them.”

He said that he understands shareholders want to know more about the investigation, which includes the U.S. Department of Justice, but that given confidentiality requirements he can’t provide more detail or speculate on the timing of updates.

“I’m hoping that in the near term, I will be able to, and I’d be really thrilled that at that time, you know, I could provide more detail,” said Masrani.

Source: BNN Bloomberg, Financial Post, MT Newswire