Jeff Christian, Managing Partner at  the CPM Group joins me to recap the recent fund flows for GLD and discuss why major gold miners don’t hold gold on their balance sheet. 

Jeff shares his perspectives on gold ETFs trends, the concept of holding physical gold versus ETF holdings, and counterparty risk concerns. Additionally, we discuss the financial strategies of major miners, including cash management, M&A activities, and the potential benefits of holding produced gold on their balance sheets.

We then turn our focus to the major gold miners, examining their financial strategies amid the higher gold prices. Despite their strong earnings, questions arise about how these companies manage their profits, with some advocating for retaining a portion of their produced gold on their balance sheets. Jeff reflects on his longstanding support for this approach as a means of enhancing investor appeal and providing additional price exposure, though it remains a rare practice among miners. We delve into the operational strategies of these companies, particularly why they don’t vertically integrate more by developing their own refining and smelting capabilities. Jeff explains the challenges and expertise differences that discourage major miners from taking these steps. Finally, the conversation touches on the balance between M&A activities and organic growth for these companies, noting a tendency to favor acquiring deposits over developing new ones.

Click here to visit the CPM Group website to learn more about the firm.