The safe haven of gold has been sought in recent days. No wonder, considering the tensions between the United States and Iran. But there are some drawbacks: the gold mining stocks did not follow the rally. And silver was also unable to follow the rise in gold. While the gold price reached a new six-year high, silver reached our first price target of $ 18.50, but is still far from a new multi-year high.
The mining stocks, which anyway have a higher correlation to the silver price than to the gold price, could not follow the increase, and even partially lost value. But a lot is happening behind the scenes. For example, the world’s largest gold producer Newmont Goldcorp raised the dividend. And clearly. The distribution to shareholders increases by 79 percent. The quarterly dividend climbs to $ 0.25 per share, adding up the annual dividend to $ 1.00 per share. The announcement that the dividend will be raised comes only a short time after Newmont Goldcorp has announced a large share buyback. The group thus seems to have recognized the signs of the times and wants the shareholders to participate in the rise in the gold price.
Sure: Gold doesn’t pay a dividend. But the rising gold price puts some corporations in a position to readjust their dividend policy. Gold production in particular and mining in general remains a capital-intensive business. But after many years, the shareholder value idea also seems to be reaching the gold companies. That should please investors. In any case, the Newmont Goldcorp share is just about to tackle the 2016 high. If the paper manages to take the $ 46 mark out of the market, investors can even look back at the $ 60 mark.