Catherine Raw, CFA, a Director and Portfolio Manager at BlackRock, Inc. (BLK) Interviews with the Wall Street Transcript: Chinese Economic Volatility Gold Adjust Gold Demand, Now What's Next?

Wall Street Transcript

67 WALL STREET, New York - December 17, 2013 - The Wall Street Transcript has just published its Gold and Precious Metals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Precious Metals - Lower Gold Price Environment - Precious Metals Exploration and Production - Increasing Capital Expenditures - Emerging Markets Silver Consumption - Mining Safety and Environmental Concerns - Gold Production Cost Structures - Gold Price Stabilization

Companies include: BHP Billiton Ltd. (BHP), Barrick Gold Corporation (ABX), Newmont Mining Corp. (NEM), Kinross Gold Corporation (KGC)

In the following excerpt from the Gold and Precious Metals Report, an experienced portfolio manager with BlackRock (BLK) discusses her outlook for the Gold sector and commodity prices for investors:

TWST: If you would, please start with a snapshot of the BlackRock Commodity Strategies Fund.

Ms. Raw: The BlackRock Commodity Strategies Fund is around $400 million. It invests across the commodity space in both commodities futures and commodities equities. On the equity side of the product, I'm responsible for managing the gold and mining equity space. The purpose of the fund essentially is to give investors the broadest possible exposure to the commodities markets through both physical and the equity markets.

TWST: What is your macro view on the market today for gold and mining securities?

Ms. Raw: Let's start with mining securities. Mining has had a challenging year, that's probably the best way to describe it, as have gold equities. Mining has pretty much been driven, in the first half of the year, by real nervousness over the outlook for the Chinese economy, which really made people concerned as to what the level of demand was going to be for metals and minerals.

China is the largest consumer of industrial metals and minerals, representing between 30% and 60% of most of the core metals and minerals - 60% of seaborne iron ore, around 50% of seaborne thermal coal, 30% to 40% of aluminum and copper. So when the market was worried about what the GDP growth rates for China were going to be, what the rate of fixed-asset investment, construction activity, manufacturing were going to be, all of that data was coming through, particularly in the first quarter, and we were seeing that the year-on-year growth numbers were relatively muted and were missing versus market expectations.

Given that we had a number of years, from the middle of 2011 onwards, when China wasn't delivering the same rates of growth as it had done previously, people began to worry very much about a hard landing for the Chinese economy, and that really culminated in a sort of peak of anxiety around the SHIBOR spike at the end of June - that's the interbank lending rate between banks in China - when we saw a spike, as there was some nervousness about the banking sector in China and the debt building up within the Chinese economy.

Now, what's subsequently happened over the summer was that the government stepped in and became the lender of last resort. Nervousness over the banking system reduced.

In addition, what we began to see is a reacceleration in the economy, and we began to see restocking taking place for commodities...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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