Cheap Gold Mines Disappear as Bullion Buyers Splurge
- Asset premiums jump as number of deals reaches most since 2011
- China, an early acquirer, retains appetite for adding reserves
Two hundred and fifty gram gold bars sit stacked in this arranged photograph at Solar Capital Gold Zrt. in Budapest, Hungary, on Thursday, March 10, 2016. Gold advanced to the highest level in a year after the European Central Bank indicated it wouldn't cut interest rates further, boosting the euro and making dollar-denominated bullion less expensive for investors.
Photographer: Akos Stiller/BloombergSo much for the run on cheap gold mines. Producers who were forced by slumping prices to unload assets last year are regaining leverage.
With bullion off to its biggest rally to start a year in four decades -- aided by the U.K.’s vote to quit the EU -- mine buyers are paying higher premiums and the pace of deals is accelerating, data compiled by Bloomberg show. The value of reserves held by major producers has almost doubled since the third quarter of last year, according to Bloomberg Intelligence.