Gold Meeting Breaks Mold as More Investors Plan to ShowLiezel Hill
The Denver Gold Forum, the industry gathering that usually sees attendance drop when gold prices fall, is drawing a rising number of investors seeking value in battered equities this year, organizers said.
Attendance at next week’s event probably will match or exceed last year’s record even though gold is down, said Tim Wood, executive director of the Denver Gold Group, which organizes the invitation-only conference. The event, which also brings together mining executives, analysts and brokers, has received increasing interest from value investors who traditionally haven’t had exposure to gold equities, he said.
Miners including Barrick Gold Corp. and Newmont Mining Corp., the two largest by output, have announced at least $26 billion of writedowns since July and are cutting spending plans after the steepest price drop in three decades. That has weighed on the 30-company Philadelphia Stock Exchange Gold and Silver Index, which has dropped 46 percent since Sept. 12, 2012, the final day of last year’s gold forum, outpacing a 23 percent fall in gold futures traded in New York.
“Obviously there are a lot of people that are hurting, but at the same time it seems to have attracted this new segment in the buy side, and we are getting bigger numbers there,” Wood said in a Sept. 18 telephone interview. “They are picking up the gold equities as being historically and comparably very cheap.”
Attendance from private-equity groups also has increased, while registration of equity sales and research staff from banks and brokerages has declined, Wood said.
Gold futures declined 2.7 percent to settle at $1332.50 today on the Comex in New York. The metal, which is viewed as a hedge against inflation and a haven asset, is poised for its first annual decline in 13 years, after reaching a 34-month low in June. Gold entered a bear market in April and has fallen 31 percent from its September 2011 intraday high of $1,923.70.
Investors are looking at the gold sector because equity valuations are lower compared with the rest of the market, said Paolo Lostritto, a Toronto-based mining analyst at National Bank of Canada.
“We’re getting a lot of people who haven’t looked at the space in a long time certainly sharpening their pencils, taking notes,” Lostritto said by phone. “It’s not necessarily that they’re going to pull the trigger anytime soon but they are certainly doing their homework.”
The Denver Gold Forum, from Sept. 22-25, will be attended by 166 mining and exploration companies, representing about 88 percent of global gold production, Wood said. Investors account for 73 percent of non-industry registrations so far, up from 69 percent last year, while so-called sell-side delegates have declined to 22 percent, from 27 percent a year earlier.
Goldcorp Inc., the world’s largest gold producer by market value, has been getting inquiries for information from more potential first-time and “contrarian” investors, said Jeff Wilhoit, a vice-president of investor relations.
“It’s part of a broader move that we are seeing,” Wilhoit said yesterday by phone. “We are definitely getting more inbound interest, people learning more about the industry.”