Gold

If we are correct that China is indeed a long-term buyer, it will likely look at pullbacks in the gold price as attractive opportunities to add to its holdings.

The low in 2015 is notable, as this gold price was lower than the cash cost of production for a meaningful percentage of the sector.

The local listing for Newmont Mining declined -11% over the quarter, tracking a 14% decline in the physical gold price.

And high gold prices allow FCFS to issue larger loans and collect larger fees.

However, the current strength of the gold price has more than compensated for these rising expenses.

Gold Fields was hurt along with other South Africa gold mining stocks as gold prices saw a sharp decline during the quarter.

Gold itself fell 15% for the quarter and closed June on pace for its worst monthly decline since October 2008, against a 17% drop in the GDX (the largest Gold Miners ETF); Equinox fell twice as much.

Royal Gold also pulled back after a strong first quarter, though the Fund had trimmed the holding during the earlier increase in the gold price.

Shares declined as gold prices became more volatile in Q2, with shifting expectations around geopolitical risk and interest rates leading to uneven demand for safe haven assets.

Amongst gold miners, we remain highly selective in this capital-intensive segment.

Conversely, this macro repricing of US interest rate expectations contributed to a -12% decline in the gold price, weighing on Newmont Mining, which fell -15%.

Gold prices, which began the year at roughly $4,340 per ounce, surged in the opening weeks with a manic energy usually seen only in the final stages of a precious metals bull market.