“Increased shareholder pressure is likely to lead to higher dividends and, potentially, share repurchases should gold prices remain near or above current levels,” according to a Standard & Poor’s note posted by Amey Stone of Barron’s.
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There is another positive fundamental catalyst that potentially bodes well for gold miners ETFs going forward: Peak production of gold has likely come and gone, perhaps indicating that supply will dwindle, thereby boosting bullion prices.
“Newmont Mining (NEM) announced that it will revisit its dividend strategy, which is linked to gold prices, and that could lead to an increase. In addition, Gold Fields (GFI) significantly hiked its interim dividend for 2016 (to 50 rand cents per share from 4 rand cents per share in the January-June period last year) and AngloGold Ashanti Ltd. is considering resuming dividend payments in 2017 after a three-year holiday. Other gold companies could consider share buybacks,” according to the S&P note posted by Barron’s.
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VanEck Vectors Gold Miners ETF