April 2nd, 2020 | 06:15 CEST
Barrick Gold, Desert Gold, First Majestic - Stocks offer advantage
Table of contents:
"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Investors get in
Physical gold is considered a crisis-proof currency. In turbulent times, the demand for the precious metal grows, and this also applies to silver. In market phases, when stock exchanges crash, there is usually also involuntary redistribution. It can be observed that speculators who have bought on credit have to get out. Investors then have the opportunity to enter at a favorable price. In recent weeks, since the Corona Crisis has kept the world on tenterhooks, it has been seen that the volatility of gold and silver companies has also increased. The price of physical gold and silver also increased the fluctuations.
Covid-19 causes supply shortages
Considering that the uncertainty of market participants increases with the money supply, more and more investors want to invest or expand their gold holdings. However, the Corona Virus not only causes falling stock market prices, but also has an impact on the procurement and supply of gold and silver. Numerous mines of well-known companies are currently closed for security reasons.
The safety of the employees is the main concern in connection with the spread of Covid-19. The producers of coins and bars as well as their dealers have also closed down or are currently experiencing a new logistical challenge, as many airlines have meanwhile restricted or completely stopped operations. For this reason, there are increasingly supply bottlenecks.
Small Cap in Mali with potential
As an alternative to physical gold and silver investments, shares in companies that participate in the creation of value are a good choice. The certification of corporate interests in shares of companies with physical gold stocks or reserves is currently a real substitute for bars or coins with supply bottlenecks. The stock exchanges are open and participation is possible at the push of a button. Barrick Gold is one of the most renowned names in the industry. The company is active around the globe and has a market value of CAD 46 billion.
As a newcomer, Desert Gold Ventures is active in Mali and explores for gold there. The company has already made several discoveries in the 400 sqkm area. As an explorer, the company is pursuing the goal of acquiring further data in order to be taken over by a producer. The West of Africa is becoming more and more important and with a market value of CAD 8 million, Desert Gold is still a small cap with upside potential - as is well known, everybody has started small.
Precious metals secure values
Among the renowned silver producers is First Majestic Silver. The company currently has a market capitalization of over CAD 1.8 billion. As soon as the stock markets have bottomed out and volatility is dwindling, demand for gold and silver stocks is likely to rise, as paper money will become less and less valuable due to the many rescue packages. The precious metal boom in connection with the financial crisis in 2008 lasted until 2011 and the price of the troy ounce of gold rose by around 150% to over USD 1,900.00.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.