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March 15th, 2023 | 10:21 CET

Deutsche Bank, Desert Gold, Commerzbank - Back to the safe haven

  • Mining
  • Gold
  • Banking
  • Investments
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The willingness of investors to take risks increased in recent months despite further interest rate fears and geopolitical uncertainties, but this was abruptly interrupted by the surprising bankruptcy of Silicon Valley Bank. While some banking and financial stocks were dragged down by double digits, the precious metals gold and silver, as well as the cryptocurrencies, celebrated a comeback after a correction lasting several weeks. The next upward wave may have begun, especially in the precious yellow metal, with the climbing of new highs.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    Deutsche Bank, Commerzbank - In the eye of the storm

    Silicon Valley Bank (SVB), a subsidiary of SVB Financial Group specializing in start-up financing, was temporarily closed and placed under government control before the weekend after an emergency capital increase failed. This news has caused a real tremor in the financial sector. Over the weekend, the Treasury Department, the Federal Reserve and the Deposit Insurance Corporation said deposits at SVB and another institution were protected. In addition, the Fed introduced a new lending program to provide liquidity to banks.

    As a result of the horror news, almost the entire banking sector saw dramatic price drops. Deutsche Bank and Commerzbank lost more than 15% at their lows since the announcement, and the bullish chart pictures were turned negative overnight. Germany's largest credit institution in terms of total assets and number of employees, Deutsche Bank, broke through a prominent support area at EUR 9.90 in Monday trading but regained it the following day. Should this fall in the next few trading days, a retracement to the EUR 9.22 area would be likely. In a worst-case scenario, the upward trend formed since March 2020 at currently EUR 7.53 could be tested. On the upside, however, the chart would brighten considerably if the downward trend formed since February 2022 at EUR 12.11 is overcome.

    The indicators also show a negative picture. Thus, the MACD generated a fresh sell signal with the sell-off. The relative strength indicator also points to sell but is still far from the oversold area on a weekly basis.

    Desert Gold - Ambitious goals

    While the financial sector had to take bitter losses, the precious metal gold shone in new splendour after weeks of correction and is once again trading above the psychologically important mark of USD 1,905 per ounce. The next striking resistance area would be found at USD 1959.48 per ounce. A breach would swing the door wide open in the direction of the USD 2,000 per ounce mark and the attack on new highs. While the large gold producers such as Barrick Gold, Newmont and Kinross correlated with the base price, the run on smaller gold exploration companies was still missing. According to past observations, however, these run after a longer emerging upward trend and then act like a leverage product compared to the blue chips of the precious metals sector.

    This could be clearly seen at the promising company Desert Gold Ventures. At CAD 0.05, the share is still close to its low for the year. However, future prospects seem more than rosy, as Jared Scharf, CEO of Desert Gold Ventures, told us in an interview linked above on the occasion of the PDAC mining trade fair that just ended.

    With the SMSZ project in Mali, Desert Gold owns one of the largest non-producing land areas in West Africa at 440 sq km. Several producing mines are located in the neighbourhood, including those of Barrick Gold, Allied Gold, Endeavour Mining, and B2Gold. The SMSZ property hosts Measured and Indicated Mineral Resources totaling nearly 1.1 million ounces. A total of more than 23 gold zones have been discovered in the area to date, which will be developed and analyzed for economic grades.

    The Canadian company is awaiting results from the drilling program of the 412,000-ounce Mogoyafara South gold zone, located in the southeast corner of the SMSZ project, near the Senegal-Mali shear zone with 5 active, high-grade gold mines. The Company's goal is to drill 30,000 m each season to reach Measured and Indicated Mineral Resources of 2 million ounces. In addition, the near-term goal is to prepare a PEA, a preliminary definitive study on the economics of the SMSZ project. Desert Gold's market capitalization is CAD 10.75 million.

    While bank stocks sold off in the wake of the Silicon Valley Bank failure, investors shifted broadly into gold and silver companies. Deutsche Bank is at key charting marks. In contrast, Desert Gold plans to double its mineral resources.

    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.

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    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

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