The Magazine for Asian Investors
And everything looked like a new rally, but then the U.S. Federal Reserve came around the corner and hammered the gold price back below $1,800.
Shortly before the publication of the interest rate decision and the FOMC press conference, the gold price pushed past the $1,850 mark, but the decision to keep interest rates the same for now and still no exact date when the first rate hike should happen, let the gold price fall again. Fed Chairman Powell looked worried, not because the labor market figures do not fit, but because he probably knows exactly in what situation the Fed is currently in. The Fed wants to end QE, raise interest rates, and still reduce the balance sheet in the background, without sending the economy into recession. A preview Powell could already see, with the stock markets in the fall since the beginning of the year and only on the basis of speculation, hardly imagine what happens if everything Powell has planned really takes place.
The last time the Fed wanted to end QE was in 2019, which would have ended visibly badly if the Fed had not resumed QE.
Gold, therefore, had to close the week again below the important $1,800 mark at $1,790.10 per ounce. With the falling gold price, the shares of gold companies have also fallen. Some shares had to lose far more than 10% this week. In the short term, more downward pressure will probably come, which makes the shares of gold companies continue to appear attractive. Buy shares with discounts, that is the motto of successful investors. The view on our Watchlist shows that the shares show a negative performance for over a year. One should not be blinded by this, because the signs for rising gold prices remain good. The main factor over a long period of time is the negative real interest rates. With a high inflation rate and the low-interest rates of the Fed, this factor remains.
Performance 24 Jan 2022 – 29 Jan 2022
|Name||Ticker||Price||%YTD||Week %||% 1Y|
|Agnico Eagle Mines Ltd.||AEM||$46.26||-12.95%||-9.10%||-33.35%|
|First Majestic Silver Corp.||AG||$9.54||-14.13%||-13.19%||-43.42%|
|Alamos Gold Inc.||AGI||$6.73||-12.48%||-4.27%||-16.40%|
|AngloGold Ashanti Ltd.||AU||$17.94||-14.49%||-11.41%||-24.08%|
|Franco Nevada Corp.||FNV||$128.34||-7.20%||-1.75%||5.56%|
|Gold Fields Ltd.||GFI||$10.00||-9.01%||-8.51%||1.32%|
|Barrick Gold Corp.||GOLD||$18.56||-2.32%||-4.03%||-16.99%|
|Kirkland Lake Gold||KL||$36.49||-13.02%||-8.91%||-5.44%|
|K92 Mining Inc.||KNTNF||$5.05||-11.01%||-9.01%||-23.48%|
|Northern Star Resources||NESRF||$5.90||-14.49%||-14.74%||-40.73%|
|Pan American Silver||PAAS||$21.13||-15.38%||-10.12%||-32.45%|
|Royal Gold Inc.||RGLD||$99.30||-5.62%||-2.89%||-4.79%|
|Wheaton Precious Metals||WPM||$39.01||-9.13%||-4.39%||-3.10%|
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