May 18th, 2022 | 11:37 CEST
Barrick Gold, Desert Gold, Newmont - Golden times
The situation with gold is more than paradoxical at the moment. On the one hand, the Ukraine war is raging with the threat of spreading to other countries. On top of that, inflation rates are jumping to levels the world has not seen in more than 30 years. As the icing on the cake, the Zero-Covid lockdowns in China are hampering supply chains that are already broken. Gold should therefore explode. However, the reality is different. The precious yellow metal is currently struggling to reach the USD 1,800 per ounce mark. However, the crisis currency is likely to prevail in the long term and pave its way above new highs.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
BARRICK GOLD CORP. | CA0679011084 , DESERT GOLD VENTURES | CA25039N4084 , NEWMONT CORP. DL 1_60 | US6516391066
Table of contents:
"[...] We have already discovered 1.1 million ounces of gold on our 440 km2 flagship SMSZ Project and our stock market value is currently around USD 10.60 per troy ounce in the ground. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Explosive environment
Gold is in correction mode despite the geopolitical situation. Accordingly, the change in the monetary policy of the US Federal Reserve, which announced several interest rate steps this year, is proving to be a brake. However, this increases the risk of a recession. Further interest rate hikes would further slow down the already sputtering growth engine. Thus, the Fed has little room for manoeuvre to make more significant hikes. However, the situation is even worse in the eurozone, where the ECB is still sticking to its historically low key rate of 0%. Although calls for a stricter monetary policy are growing louder, the European financial guardians remain inactive. Given the high debt levels of the southern EU countries in particular, this is not too much of a surprise. A rapid, stronger succession of hikes could bring down a house of cards.
Attractive mining operators in the long term
From a portfolio diversification perspective alone, about 10% of total value should be in precious metals. In addition to buying physical coins and bars, stocks of gold producers or exploration companies are also attractive. A very interesting exploration company will present itself to interested parties on the occasion of the 3rd International Investment Forum (IFF) on Thursday, May 19, 2022, via Zoom. Here, the CEO of Desert Gold Ventures, Jared Scharf, will share the recently announced milestones and explain the merits of the flagship project SMSZ in western Mali. Registration to the live event is free.
In total, resource estimates at the five deposits at SMSZ add up to more than 1 million ounces of gold combined. Accordingly, the measured and indicated mineral resource totaled 310,300 ounces of gold at 8.47 million tonnes and a grade of 1.14 g/t gold. The majority was in the inferred category, i.e. associated with higher uncertainty, with 769,200 ounces of gold (at 20.7Mt and a grade of 1.16 g/t).
A successfully completed private placement raised approximately EUR 1.11 million. In addition, Desert Gold started drilling along the 1.6 km Gourbassi West North zone. There, drill intercepts of 1.94 g/t gold over 30m and 2.75 g/t gold over 12m were last identified. The objective, according to management, is to test the continuity and strength of the gold system at depth and along strike. It is also believed that this target has the potential to expand the total mineral resources significantly.
Desert Gold's market capitalization currently stands at EUR 9.38 million. In the course of the decline in the base price of gold, the share lost disproportionately and is quoted at EUR 0.063 in Frankfurt.
Setback potential given
In addition to Desert Gold Ventures, major gold producers such as Barrick Gold and Newmont have also been hit hard in recent weeks. After forming a double top formation at USD 25.99, the Barrick price turned with strong volume and fell to its striking horizontal resistance line at USD 20. So far, this could be defended, but the indicators are forming negative divergences, which favor a further slide. Accordingly, the next price target would be USD 17.67. A breakthrough of the downward trend developing since September 2020 at currently USD 26.19 would provide some relief.
The chart picture for the American mining company Newmont from Denver, Colorado, is similarly negative at the moment. In contrast to Barrick, the S&P 500 company was able to form a new high of USD 85.76 in April, but this proved to be a bull trap. Also, with a large volume, Newmont corrected to the support zone at USD 64.03. The indicator situation is also negative, so the next short-term price target should be USD 55.
Although the framework conditions for an investment in gold could not be better, gold is correcting. From a technical perspective, a decline to USD 1,600 is possible for the gold price. Barrick and Newmont should be watched and collected after stronger declines. In Desert Gold, the correction is already advanced. In addition, the Company shines with good fundamental results.
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 hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
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