Editor's Picks: Gold/Oil Warning Sign Flashing, Plus Agnico's Three-Deal Move
With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.
She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.
Coming up next week, market participants will be keeping an eye on developments at the US Federal Reserve, which meets from April 28 to 29.
It was a week of downward momentum for the gold price, which fell from above US$4,800 per ounce early in the period to less than US$4,700.
Silver also trended lower, pulling back after last week's higher levels.
Both precious metals continue to react to news about the Iran war, with the extension of the US-Iran ceasefire providing momentum midway through the week. However, since then turmoil has increased, with tensions ramping up in the Strait of Hormuz.
I heard this week from John Feneck of Feneck Consulting, who said that while it's tough to see gold and silver prices fall, it's not surprising given the circumstances.
Here's how he explained it:
"It's been seven weeks of pain. Has that been something that you did, that I did, that investors did? No — it's the war. I mean, look at the price action. It's telling you that the selloff was generated on March 3, which was a Tuesday, by just a lot of margin calls and people that are too leveraged out there. That's what we call an unwinding of that type of position, where people need to sell because they're losing money in other parts of the market, and they need to cover those positions."
Feneck noted that gold and silver stocks have suffered as well, but encouraged investors to take the time to review whether the thesis has actually changed for their holdings:
"I just would tell investors, hang in there. You have to fact check yourself. Take the weekends and spend a few hours going through your holdings, doing homework on, 'Hey, has this thesis changed with this stock?'
"What's happened from March 3 to now? Not much probably with that stock, right? It's just getting tossed around because of the volatility."
Looking at the broader market, I also heard this week from independent macro strategist Tom Bradshaw, who identified an indicator that's flashing a warning sign for the US economy.
"It looks at the inflation-adjusted gold and oil prices relative to their 12 month averages," he said. "I've used the average of these two, and what I found is when they top 22 percent we've always seen severe periods of economic turmoil going back to the start of the fiat currency era."
According to Bradshaw, this signal was triggered around 1974, 1979 and 2008 — while past isn't necessarily prologue, he's concerned about what's next:
"The most significant thing about this indicator is that gold and oil are rising together ... gold rising shows that investors are pricing in financial and economic risk, and oil rising shows that investors are pricing in geopolitical risk. And when you have three of these issues existing simultaneously, it definitely shows that you've got a lot of problems potentially on the horizon."
Bullet briefing — Fed to meet next week, Agnico's three gold deals
Fed gears up for meeting
Coming up next week, the US Federal Reserve will meet for the third time in 2026.
CME Group's (NASDAQ:CME) FedWatch tool shows that the central bank is widely expected to hold interest rates steady at 3.5 to 3.75 percent. Its last reduction came this past December, and since then inflation concerns caused by the Iran war have thrown future cuts into question.
If all goes as planned, next week's Fed meeting will be the last for Chair Jerome Powell, whose term ends on May 15. However, it's possible he may remain in the position longer — Powell has said he will stay on temporarily if nominee Kevin Warsh isn't confirmed by that time.
Warsh's confirmation hearing took place this week, and brought questions about Fed independence — a key concern given US President Donald Trump's clashes with Powell over rates and comments showing he believes Warsh will be more likely to do his bidding.
Interestingly, it's Trump's feud with Powell that could end up extending his stay at the Fed — Republican Senator Thom Tillis, who is part of the Senate Banking Committee, has said he won't vote for Warsh until Trump drops a Department of Justice investigation into Powell. That happened on Friday (April 24), potentially clearing Warsh's path; Tillis has not yet commented on this development.
Agnico signs three gold deals
Agnico Eagle Mines (TSX:AEM,NYSE:AEM) announced a slew of deals this week in a bid to consolidate Finland's Central Lapland greenstone belt. The major miner plans to acquire Rupert Resources (TSXV:RUP,OTCQX:RUPRF) and Aurion Resources (TSXV:AU,OTCQX:AIRRF), as well as B2Gold's (TSX:BTO,NYSEAMERICAN:BTG) 70 percent stake in Fingold Ventures. Because Aurion owns the other 30 percent of Fingold, Agnico will end up wholly owning that joint venture as well.
The resulting land package will cover almost 2,500 square kilometers, and Agnico executives say it could become a gold production hub capable of producing 500,000 ounces annually within the next decade. Synergies are estimated at US$500 million.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
