"Gold always fuels greed"

The American mining group Newmont Mining Corporation has become the world's largest producer of yellow metal after the acquisition of the Canadian Goldcorp, explains in its column Laurence Girard, a journalist at the "World".

By Laurence Girard Posted today

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Newmont Mining Corporation Gold Mine near Elko, Nevada, May 21, 2014.
Newmont Mining Corporation Gold Mine near Elko, Nevada, May 21, 2014. Rick Wilking / REUTERS

Chronicle Raw materials. For some $ 10 billion more ... This is the price to pay to win the gold medal in the race for size mining groups mining yellow metal. On the highest step of the podium is now the American Newmont Mining Corporation. To reach the supposed Grail of this gold rush, he lassoed his Canadian competitor Goldcorp. An acquisition unveiled Monday, January 14.

At the end of this staggering operation, the new company will be named Newmont Goldcorp. A name that is worth all the gold in the world. The American sweeps the game to another Canadian, Barrick Gold. Ephemeral world number one after the acquisition in 2017 of the British Randgold, with the key a check of 6 billion dollars. To make his newfound supremacy shine, Newmont pulls out the trebuchet. Or rather the balance of Roberval. See the weighbridge. And claims that, by trading with Goldcorp, they extracted 7.9 million ounces of gold in 2017. Compared to the 6.6 million ounces of the fallen leader.

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Gold is therefore in fusion. And some to question the motives of these great maneuvers. Investor pressure is mounting on these mining groups. The market value of Goldcorp had melted in the fall of 2018, after a warning on its results. What make it a prey of choice. The challenge, according to these giants, is to reduce production costs by working on ever larger scale.

The pressure is all the stronger as the gold rolls, lulled by the softness of the Indian market, weighed down by its rupee. Even if its symbolic power remains intact, especially at weddings, the sub-continent has its pennies and reduces its purchases. India accounts for a quarter of the global demand for jewelery.

"Go on the ingot! "

As for the geopolitical tensions, however numerous since the arrival in power of the American president Donald Trump, they do not ignite the course of the yellow metal. In early 2019, however, the ounce of gold suddenly appeared on the path of $ 1,300, because of uncertainties about the state of health of the Chinese economy. "Go on the ingot! "Said the proponents of a next rise of the yellow metal, singing this chorus for almost two years. For now, the threshold has not been crossed yet.

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Gold loses all its brilliance as palladium shadows it. In the small world of precious metals, the gray metal has dethroned it. And the yellow metal is gray mine. Driven by speculative fever, the ounce of palladium exceeds $ 1,400. The prospect of a deficit market, while car manufacturers need this metal to filter emissions from gasoline engines, is blazing prices.