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Gold: Back on Track for 2014?(5:41)

Joe Foster
Senior Gold Analyst

January 21, 2014
         

Poor Gold Sector Performance in 2013


JOE FOSTER: In 2013 the market was not as concerned with financial risks.  All the risks that came into the market in 2008 with the credit crisis that drove gold to all-time highs in 2011, I believe are still with us: sovereign debt problems, fiscal deficits continuing to rise. We're seeing geopolitical risks in the Middle East that are probably as high as they've ever been yet gold is not reacting because investors are not concerned about these risks in this market.  We're seeing heavy redemptions out of the gold bullion ETFs and we're seeing all-time highs in the stock markets.  


Outlook for Gold Bullion 2014


FOSTER: In the near-term, $1200 is an important technical level.  The gold market fell to around the $1200 level in June of 2013, and we're retesting those lows right now in the wake of the Fed announcement that they will begin tapering in 2014. There are several events in the first quarter of 2014 that will probably continue to test current levels.  One is the appointment of Janet Yellen as the new chair of the Federal Reserve Board of Governors.  We'll see what the market thinks of that, and what the market thinks of her first decisions as Fed governor.  Second, Chinese New Year is in January this year.  So, there's been very strong demand out of China.  We'll see if that continues once Chinese New Year has passed.  Third, there have been tremendous redemptions out of the gold bullion ETFs.  We believe a lot of that is due to year-end tax loss selling.  So we'll see if these redemptions stop as we continue into the New Year.  Beyond that, if we are able to hold these $1200 levels, that will establish, I think, a pretty firm base for gold and should allow it to trend higher later in the year as the financial risks that we've been talking about come back into the system.  


Outlook for Gold Equities 2014


FOSTER: Just like gold bullion, gold equities have had a tough time in 2013 and in my opinion, these stocks are not going to get back on track until gold prices do. There has historically been a very strong correlation between gold and gold shares.  We need positive momentum in gold before gold stocks can get back on track.  That being said, I believe gold mining companies are positioned very well for an improvement in the gold market.  They've been struggling with rising costs for years now, costs that have almost gone out of control. Those costs are coming under control now with new managements that are finding ways to control costs.  They are looking for better returns out of the projects they build and executing with better capital discipline.


We've seen some results that suggest that gold mining companies have really turned the corner.  We had a good second quarter in 2013.  Third quarter was fantastic in terms of meeting expectations, controlling costs, and we're expecting a good fourth quarter as well.  Once the gold market gets back on track, we believe these gold companies are positioned very well to enjoy some favorable performance on a rising gold price.


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IMPORTANT DISCLOSURE


The views and opinions expressed are those of the speaker and are current as of the video's posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions.   Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index.  All performance information is historical and is not a guarantee of future results. For more information about Van Eck Funds, Market Vectors ETFs or fund performance, visit vaneck.com.


Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video. Gold investments can be significantly affected by international economic, monetary and political developments. Gold equities may decline in value due to developments specific to the gold industry, and are subject to interest rate risk and market risk. Investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation.


No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2014 Van Eck Securities Corporation.

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Hard Assets (13)
Commodities: Performance Drivers in 2014(3:52)
Roland Morris
Commodities Strategist

posted on April 22, 2014


"Most index products had a fairly positive return, driven in particular by some soft commodities: grains, coffee, and protein. We believe these commodities’ appreciation was driven by some supply problems that were unexpected by the market."


LPL Financial Research: U.S. Energy Renaissance Q&A with Van Eck Global(9:56)
Shawn Reynolds
Portfolio Manager, Van Eck Global Hard Assets Investment Team

posted on April 14, 2014


"The U.S. energy renaissance is a remarkable resurgence in oil and gas production here in the United States... It’s up over 50% in the last five years, growing at a steep rate. There’s no other country or region in the world that has grown that fast that quickly in the last 30 or 40 years."


Global Research: Mining in Burkina Faso(4:29)
Joe Foster and Ima Casanova
Senior Gold Analysts

posted on April 10, 2014


"We invest across the spectrum, but in Burkina, it is mostly mid-tier and junior companies that are active. Most of Burkina’s gold deposits are moderate to smaller-sized, so we find smaller companies there. Because of the favorable operating environment, there are quite a few interesting opportunities."


Gold 2014: Investment Demand, Geopolitical Risks, and Corporate Discipline (4:25)
Joe Foster and Ima Casanova
Senior Gold Analysts

posted on April 7, 2014


"Emerging markets geopolitical risks have probably been the main driver of gold this year. People are worried about financial stability with headlines coming from Thailand, Venezuela, Ukraine, and Turkey. People are also concerned about the growth in China and the Chinese banking system."


Gold 2Q 2014: Review of Earnings Results and Costs(4:29)
Joe Foster and Ima Casanova
Senior Gold Analysts

posted on April 3, 2014


"The market focused more on cost and operating results, and did not necessarily punish companies that missed earnings expectations"


Industrial Metals 2Q 2014: Commodity Outlook, Capital Management, and Mine Strikes(5:58)
Charl Malan
Metals & Mining Analyst

posted on April 3, 2014


"We believe that towards the latter part of 2014 capital management, defined as cost management and CAPEX reductions will be a potential significant kicker for higher earnings. It will ultimately develop into a higher rating for metals and mining companies through either a cash flow multiple or an EV/EBITDA multiple."


Agribusiness 2Q 2014: Crop Yield, Pricing, and Precision Farming(5:24)
Sam Halpert
Agriculture Analyst

posted on March 25, 2014


"We're headed toward the U.S. planting season and the USDA has come out with its initial estimates. They predict very good acreage numbers, both in corn and soy. Assuming normal weather, we expect another good crop which should ultimately put some downward pressure on prices."


Gold: Back on Track for 2014?(5:41)
Joe Foster
Senior Gold Analyst

posted on January 21, 2014


“In the near-term, $1200 is an important technical level. The gold market fell to around the $1200 level in June of this year, and we're retesting those lows right now in the wake of the Fed announcement that they will begin tapering in 2014.”


CMCAX: Using the Constant Maturity Approach to Commodities(8:27)
Roland Morris
Commodities Strategist

posted on January 7, 2014


"Amongst the three drivers: commodity exposure, roll exposure, and collateral exposure, CMCAX does a great job of isolating commodity exposure. It does that through its constant maturity approach to reduce the roll risk, does not take collateral risk, and maintains a very short-term Treasury bill-holding which essentially eliminates collateral risk.


Agribusiness: Review of 2013 and Outlook for 2014(6:01)
Sam Halpert
Agriculture Analyst

posted on December 4, 2013


“RFS, which is the Renewable Fuel Standard, will likely be reformed in 2014. There has been a ton of pressure from various constituents on the fuel standard. It's based on assumptions about gasoline demand that are outdated and we think that it will change.”


Industrial Metals: Focusing on Capital and Cost Management in 2014(7:09)
Charl Malan
Metals and Mining Analyst

posted on November 20, 2013


"We've seen many management changes among mining companies over the last year and a half. Many of the top twenty mining companies have changed senior management. Where previous management was focused much more on growth at any cost, new management is focused on capital and cost management... in 2014 [we] are likely to continue to see this aggressive approach by new management on reducing costs."


Current and Future Themes: Unconventional Resources(3:23)
Shawn Reynolds
Portfolio Manager, Van Eck Global Hard Assets Investment Team

posted on October 9, 2013


"We see many opportunities in the Permian Basin, in West Texas, which is divided into two areas: the Midland eastern basin and the Delaware western basin. The Midland Basin is a bit more advanced than the Delaware basin but we have exposure to both regions."


Evolving Themes: Global Mining (4:00)
Shawn Reynolds
Portfolio Manager, Van Eck Global Hard Assets Investment Team

posted on October 9, 2013


"There's been a big paradigm shift in the mining sector over the last year, and we are seeing high-level management changes that reflect this. The industry is shifting from a focus on growth, to one that emphasizes expense reduction, margins, returns, and eventually getting to higher valuations.”


Emerging Markets (15)
Emerging Markets Equities 2Q 2014: Opportunities Despite Headwinds(5:19)
David Semple
Portfolio Manager, Van Eck Emerging Markets Investment Team

posted on April 22, 2014


"There are large companies and large sectors in the emerging markets that we don't think have a particularly good outlook right now. However, we believe that we can find some opportunities that are structural growth opportunities that play on what people think they're getting with emerging markets but normally often don't achieve with many of the more index-driven products."


EM Debt 2Q 2014: Emerging Markets in Crisis? (4:23)
Fran Rodilosso
Portfolio Manager, Market Vectors® Fixed Income ETFs

posted on April 1, 2014


"The emerging markets are not a single asset class, nor obviously a single country or region. There are pockets that are in a period of crisis… I would be remiss to talk about a potential crisis without discussing China, which has grabbed so many headlines this year."


Global Research: Highlights from Eastern Europe(3:52)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on March 11, 2014


"Even though large parts of the region benefit from growth recovery in the euro zone, especially Germany, there are two large economies, Russia and Turkey, where the growth dynamics remain extremely anemic."


Global Research: Poland(3:25)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on March 12, 2014


"I think Poland is uniquely positioned to benefit from Germany's rebound... My key concern about Poland, however, is potential exposure to change in sentiment from political risks in Ukraine."


Global Research: Hungary(4:38)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on March 14, 2014


"The shift in my outlook for Hungary has been fairly dramatic… the government, together with the central bank implemented fairly aggressive and large-scale funding for lending programs but I have yet to see the results in terms of stronger growth in Hungary."


Global Research: Turkey(5:36)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on March 14, 2014


"The macroeconomic fundamentals in Turkey are getting worse. Turkey is vulnerable, but it’s always been vulnerable. It’s never had enough reserves. Its real interest rates have never been that satisfying. But the political context is the worst I’ve seen in twenty years."


Global Research: Romania(3:48)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on March 14, 2014


"My outlook on Romania did not necessarily change for the negative but certain red flags were raised during my trip."


Global Research: Ukraine(4:59)
Eric Fine and Natalia Gurushina
Portfolio Manager and Economist, Van Eck Unconstrained Emerging Markets Bond Investment Team

posted on February 12, 2014


"The scenario of civil war and perhaps a civil war that has broader implications for the region is a scenario we have to think about. It's hard to assign probabilities to that, but the market seems to be saying it's a zero and I think zero is definitely the wrong answer."


Global Fixed Income Investment Themes in 2014(6:35)
Fran Rodilosso
Portfolio Manager, Market Vectors® Fixed Income ETFs

posted on February 21, 2014


"As a fixed-income investor, some key themes for 2014 are not that different from 2013. We believe that it may make sense to shorten duration, and to take on some additional credit risk to make up for the loss of yield by moving to shorter durations appear to makes sense."


2013 Review of Global Fixed-Income Markets(4:37)
Fran Rodilosso
Portfolio Manager, Market Vectors® Fixed Income ETFs

posted on February 21, 2014


"In 2013, improving growth in the U.S. helped short-term interest rates remain low which helped support credit markets in general… European sovereign debt traded quite well last year, as did European credit, particularly high yield, for many of the same reasons that credit did well in the U.S."


How Will Tapering Affect EM Bonds?(4:08)
Eric Fine
Portfolio Manager, Van Eck Unconstrained Emerging Markets Bond Fund

posted on February 19, 2014


“I don't have a blanket answer that says the taper is just not an issue for EM, but I do think it's been priced in generally. I think some countries have been able to react, and if tapering's happening because of good final demand, because economies are growing, then that's a high-quality problem for EM countries.”


Global Research: Indonesia, Malaysia, Philippines, and Vietnam(9:51)
Eric Fine
Portfolio Manager, Van Eck Unconstrained Emerging Markets Bond Fund

posted on February 19, 2014


“A big attraction for Japanese and Korean investments in China is low wages. There are substantial and continuous wage pressures in China and that brings a big challenge for existing investments. The countries that I visited are all seeing substantial interest and in many cases are already seeing inflows from Japan.”


Why Unconstrained Approach to EM Bond Investing?(4:25)
Eric Fine
Portfolio Manager, Van Eck Unconstrained Emerging Markets Bond Fund

posted on February 11, 2014


“In one word, the value of an unconstrained approach to emerging markets bond portfolio investing is ‘flexibility’. The market changed a lot in the past 20 years. At first, it was only hard currency bonds. Then came hard currency corporates followed by local currency sovereigns. Nowadays, local currency corporates are becoming more prominent. Having an unconstrained mandate is key to optimizing the portfolio using all four sub asset classes.”


EM Equities: Middle-Income Trap, Tapering, and Frontier Markets 2014(5:56)
David Semple
Portfolio Manager, Van Eck Emerging Markets Fund

posted on January 24, 2014


“Over time, we think that there will be increasing idiosyncrasies from country to country. Allied to that is the effect of tapering which should sort out which countries are stronger than others. Our thesis last year was to not see emerging markets as a beta block but rather as a collection of countries where we can pick the best stocks.”


EMAG: No Assembly Required(5:14)
Fran Rodilosso
Portfolio Manager, Market Vectors® Fixed Income ETFs

posted on December 10, 2013


“EMAG offers a way for investors to gain broad exposure to emerging markets fixed income, both hard currency and local currency, in their portfolios….EMAG encompasses the broad opportunity set within the emerging markets fixed-income space.”


Editor's Choice (5)
Muni 2Q 2014 Investment Themes (5:06)
Jim Colby
Portfolio Manager, Market Vectors® Municipal Bond ETFs

posted on April 1, 2014


"We have a platform where we believe the Federal Reserve is going to modestly adjust its quantitative easing and provide us with a stable platform going forward with respect to interest rates."


Fixed Income 2Q 2014: Rates, Credit, and U.S. Corporates(5:00)
Fran Rodilosso
Portfolio Manager, Market Vectors® Fixed Income ETFs

posted on April 1, 2014


"The consensus has been that the risk would be for rates to rise to 4% on the 10 year. But the perspective looking into the second quarter is that we're range-bound on 2.6 to 3%. If that consensus holds that's going to be supportive for a lot of financial markets."


SHYD: Shorten Up for Rising Rates(4:43)
Jim Colby
Portfolio Manager, Market Vectors® Municipal Bond ETFs

posted on February 26, 2014


"One of SHYD's compelling features is that it is uniquely positioned to deal with some of the current problems that investors are facing in today's markets… including rising interest rates."


Israel: Positive Economic Surprises in 2013(5:19)
Steven Schoenfeld
Founder and Chief Invesment Officer,
BlueStar Indexes


posted on January 15, 2014


“There have been positive surprises in the economy, both because of fiscal discipline, greater tax receipts, and the fact that energy exports are starting to come online. We’re very positive on the Israeli economy.”


Israeli Capital Markets: Challenges, Return of Equity Flows, and Opportunities(7:56)
Steven Schoenfeld
Founder and Chief Invesment Officer,
BlueStar Indexes


posted on January 15, 2014


"The research we do at BlueStar looks at both valuations and technical patterns in the market. Even though the BlueStar Israel Global Index has had a very strong rally and could be due for a pause, we expect further highs in 2014.”


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