April 21st, 2022 | 09:27 CEST
Where you can still place your trust: Deutsche Bank, Desert Gold, Newmont
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"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Deutsche Bank: Loss of confidence or beacon of hope?
When Capital Group announced its exit from Deutsche Bank during Holy Week, many shareholders were startled. The reason: Only two years ago, the financial investor had joined as an anchor shareholder and was also considered a pillar of support for CEO Christian Sewing. Before that, the investor Cerberus had also significantly reduced its stake in Deutsche Bank. Observers now speculate that the financial investors could not have moved fast enough at Deutsche Bank. However, since Capital Group has also exited Commerzbank, one attempt to explain the share sales is aimed back at the long hotly debated merger between Deutsche Bank and Commerzbank, which is now probably finally off the table. Capital Group, Cerberus, and others may have had hopes in this regard, which have been dashed.
For private investors, this is not a real loss of confidence - the numerous scandals and associated penalties at Deutsche Bank are more serious. The upcoming turnaround in interest rates, which is already being anticipated by the market, should tend to favor bank stocks. If interest rates rise, this will create new scope in the lending business. The Deutsche Bank share price, which has been trending upward for three years, also speaks more of hope than lost trust. Nevertheless, investors cannot expect Deutsche Bank to make any great leaps - but the long-term potential is there.
Desert Gold: Anticyclical to success?
Shares such as Desert Gold also stand for great long-term potential. The Canadian mining company is looking for gold in the African country of Mali on the border with Senegal and has a vast property with great potential there. About three months ago, the Company released a resource estimate and reported one million ounces of gold. In 2022, the Company plans to drill another 20,000 meters to expand its resources and show new potential to the market. While established companies can squander existing confidence by making flimsy announcements and throwing plans out the window, with companies like Desert Gold, many investors are skeptical from the start. The reason: These companies are looking for the deposits of tomorrow and usually have a long way to go before they are successful.
However, it is precisely this factor that investors can take advantage of. Those who assume that the market is always too skeptical about a stock will find it easier to take advantage of setbacks to enter the market or persevere through lean periods. In the case of exploration stocks, it is always important that upcoming financing rounds do not dilute the positions of existing shareholders too much. In the case of fully financed companies, the chances for anti-cyclical strategies are usually quite good. Desert Gold recently raised an additional CAD 1.4 million in a quick capital round and has already started drilling for 2022. Although the share is stuck in a downward trend, the mood around gold is already much better again. In addition, the value is considered a takeover candidate according to the research portal researchanalyst.com.
Newmont: Gold shines again
That there is life in the gold market is shown by the price performance of Newmont. The world's largest gold producer gained around 35% in the past three months. Since Newmont is a producer, the Company benefits more directly from positive changes in the gold price. The share prices of smaller producers and, ultimately, exploration companies usually only follow suit once the gold price upswing has gained substance and is sustainable. The market is likely to see this as soon as gold reaches new highs. Currently, the gold price is still below the USD 2,000 mark. However, the popularity of stocks like Newmont shows that the gold price rise could be more than just a flash in the pan in the wake of the current crises.
Newmont's stock has already risen sharply but remains solid. Investors can seize greater opportunities with smaller gold stocks, such as Desert Gold. However, it is important to fit the respective values into the individual portfolio planning and reduce position sizes since smaller gold stocks fluctuate more strongly than large producers. However, prepared in this way, it may well be worthwhile to place your trust in smaller companies. The more anti-cyclical investors think, the greater the opportunities.
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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