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Lingering Economic Risks Put Gold on Track for Best Year Since 2010 – Wall Street Journal

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The strong year has been a boon for shares of gold producers.


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Marcos Brindicci/REUTERS

Gold is on track to post its best annual performance since 2010, underscoring how a host of global economic challenges are supporting the haven metal even as stocks rally to new highs.

The price of gold tends to swing based on geopolitical tensions and investor confidence in global growth. The precious metal often rallies when investors are skittish and trying to protect against a broad market downturn and stalls when there are few hurdles on the horizon for stocks.

After weeks of listless trading, prices have advanced in five of the last six sessions to hit their highest level in three months. They are up 18% for the year and about 2.4% below their six-year peak hit in early September. Gold traded Friday at $1,513.80 per troy ounce. The strong year has been a boon for shares of gold producers such as

Barrick Gold Corp.

and

Newmont Goldcorp.

, many of which have also posted outsize gains.

Although an initial U.S.-China trade pact and better-than-expected economic data around the world are supporting riskier investments late in the year, questions remain about future negotiations between the world’s two largest economies. Stagnant growth in Europe and Japan, a wave of recent protests from Latin America to Hong Kong and the coming 2020 U.S. presidential election are also lifting demand for gold.

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“The market is being supported by increasing risks around the world, whether they’re geopolitical or financial,” said

Joe Foster,

who runs the VanEck International Investors Gold Fund. “It’s been pretty resilient.”

Mr. Foster has maintained investments in gold and silver miners recently, expecting precious metals to continue performing well.

Gold and stocks also logged sizable gains in 2017, again showing how both investments can rally at the same time during times of heightened geopolitical uncertainty. Stock traders have been using options to hedge against a market downturn, a trend some analysts think could continue ahead of next year’s presidential election.

Analysts are also monitoring a rebound in bond yields around the globe because higher yields make gold and silver less appealing to investors seeking returns from safer assets. The yield on the benchmark 10-year U.S. Treasury note, which affects everything from mortgage loans to student debt, has climbed back near 1.9% after sliding to a three-year low of 1.46% in early September.

The recovery in yields comes after the Federal Reserve indicated plans to leave borrowing costs where they are and signaled confidence in the economy after cutting interest-rates three times earlier in the year.

Still, some analysts are unsure about how much higher yields can climb, reflecting uncertainty about whether global growth can accelerate next year. Economic data in the U.S. and China have picked up, but some investors are waiting to find out how the “phase one” trade deal will impact the world economy.

“Is it enough to be a real propellant for economic growth going forward? It’s hard to know,” said Chris Mancini, an analyst at the Gabelli Gold Fund. “The details aren’t very specific.” Mr. Mancini has also stuck with his investments in gold miners because he is waiting to see how economic data and monetary policy affect markets.

Another factor boosting gold: weakness in the dollar. The U.S. currency has fallen more than 2% below a peak it hit against a basket of currencies late in the third quarter, supporting assets like gold that are denominated in dollars and become cheaper to overseas buyers when the currency weakens.

Shares of some large gold producers have also benefited. Barrick Gold is still up 36% for the year, while Newmont Goldcorp shares have advanced 23%. The S&P 500 is up 29%, heading for its biggest annual gain since 2013.

For now, some investors are paring back large gold bets in case the metal’s latest rally stalls. About $1.2 billion has flowed out of the

SPDR Gold Trust,

the world’s largest gold-backed exchange-traded fund, since mid-October, according to FactSet. That marks a reversal from the summer, when billions of dollars flowed into the fund.

And hedge funds and other speculators cut net bets on higher gold prices to their lowest level since late June during the week ended Dec. 10, Commodity Futures Trading Commission data show. Net bullish bets rebounded the following week but are still 25% below a peak hit in late September.

Bets on higher prices still far outnumber bearish wagers, and some analysts caution that it is too early to predict a sharp acceleration in global economic growth.

Suki Cooper,

precious-metals analyst at Standard Chartered, predicts gold will resume its rally later in 2020 when she expects the economy to soften.

“We’d really be looking at a slowing in some of the data and signals that the Fed might be considering rate cuts in the last quarter,” she said.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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