Close menu




May 18th, 2022 | 11:37 CEST

Barrick Gold, Desert Gold, Newmont - Golden times

  • Gold
Photo credits: pixabay.com

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 | Author: Stefan Feulner
ISIN: BARRICK GOLD CORP. | CA0679011084 , DESERT GOLD VENTURES | CA25039N4084 , NEWMONT CORP. DL 1_60 | US6516391066

Table of contents:


    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.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    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.

    About the author



    Related comments:

    Commented by André Will-Laudien on July 4th, 2022 | 12:25 CEST

    Attention, turnaround! Lufthansa, TUI, Desert Gold, Deutsche Bank: These stocks are taking off again!

    • Gold
    • Tourism
    • Investments

    From several perspectives, the ongoing crisis is a mammoth task for asset managers and private investors. First, after the long uptrend and the absolute boom valuation of growth stocks from 2015 to 2022, no one knows when a sufficiently high discount has been reached to re-enter. Some stocks, such as Plug Power, are very forward-looking and dependent on government contracts. Here there have already been sales valuations of a factor of 200. So is a P/S ratio of currently 12 after an almost 80% share price loss cheap or still hopelessly overpriced? We do not know because the ongoing war sets new market parameters daily. The major indices will therefore continue to search for a valuation basis in a very volatile manner. We pick out a few selected opportunities.

    Read

    Commented by Stefan Feulner on June 30th, 2022 | 11:03 CEST

    Tocvan Ventures and BYD with outstanding news - TeamViewer plunges into a bottomless pit

    • Gold
    • Silver
    • Technology
    • Battery

    The current correction has hit interest-sensitive growth stocks particularly hard. The US technology exchange NASDAQ, for example, has lost around 34% of its value since the beginning of the year and its high of 16,670 points. Investors did not even stop at shares in future technologies such as electromobility. But in contrast to top dog Tesla - Musk's shares have halved in value within six months - Chinese competitor BYD is rushing from one high to the next. There is also strong news from a promising gold and silver exploration company. A gold price that experts expect to be positive in the long term could help the company to outperform.

    Read

    Commented by Stefan Feulner on June 30th, 2022 | 10:09 CEST

    Rheinmetall on the verge of a breakout, and MAS Gold and K+S with rebound opportunity

    • Defense
    • Gold
    • fertilizer

    Due to the uncertain geopolitical situation regarding the Ukraine conflict and concerns about inflation getting out of hand, the most important stock market indices are again turning downward. Germany's leading index, the DAX, is once again struggling with the psychologically important 13,000-point mark. With the exception of defense stocks, there is downward pressure across the board. Fertilizer manufacturers, which initially benefited particularly from the sanctions against Russia, are also correcting sharply and offering interesting entry opportunities for long-term investors. The precious metals markets are also running into attractive buying zones.

    Read