Thibaut Lepouttre, editor of Caesars Report, knows ’tis the season for generosity, so when we asked him for his top three picks among junior mining equities, he gave us five—four gold plays and a phosphate name. Belgium-based Lepouttre also discusses different “black swan” events and their potential impact on the gold price, as well as some naughty and nice mining jurisdictions. But this is the interview that keeps on giving, so before he left Lepouttre added two micro-cap oil names he believes would make great “stocking stuffers.” He may not be Santa Claus but you’ll appreciate his magnanimity in this interview with The Gold Report.
The Gold Report: The Chinese yuan will soon join the International Monetary Fund (IMF) Special Drawing Rights (SDR) currency basket. The Chinese government hopes the yuan’s inclusion will help undermine the U.S. dollar as the world’s reserve currency. What will the likely impact be on gold?
Thibaut Lepouttre: Yes, the IMF has agreed to add the yuan to the SDR basket. At 11% the Chinese yuan will have a higher weighting in the SDR basket than either the Japanese yen or the British pound. But what’s surprising is the rather small cut in the U.S. dollar ratio in the basket. The weighting will go down to 41.73% from 41.9%, just 0.17%. The Chinese will have to wait a few more years to see a significant cut in the weighting of the U.S. dollar.
“Callinex Mines Ltd. is definitely chasing an elephant on its Pine Bay zone.”
What will be the effect on the gold price? Probably marginal because the weighting of the U.S. dollar remains virtually unchanged. It would have been different if all currencies had lost 10 or 11% of their value in the SDR basket. Then the U.S. dollar could have …read more