The gold price remains historically high, but equities haven't seen as much momentum as some investors would like. Two experts share how they're approaching the market.
Top Stories This Week: Gold Nears US$2,000 Again, 2 Experts Share Stock Strategiesyoutu.be
The gold price kicked off the week with a bang, approaching the US$2,000 per ounce point once again on Monday (April 18) as safe-haven demand from investors intensified.
Market watchers have attributed the yellow metal's jump to factors like a ramp-up in the war between Russia and Ukraine, COVID-19 restrictions in China and of course ever-present inflation concerns.
Despite those upward drivers, it wasn't long before gold pulled back — by the time Friday (April 22) afternoon rolled around, the precious metal was just above US$1,930.
Even so, gold remains historically high, and more price growth is expected. What's been frustrating for some is the performance of gold equities, which haven't seen as much momentum as might be expected.
I heard recently from two experts with different perspectives on how to approach the space.
Maria Smirnova of Sprott Asset Management said that although larger-cap gold stocks have been doing well, the best possibilities lie in explorers and small- to mid-size producers. Conversely, she cautioned that inflation is causing problems for developers, which are having to deal with higher CAPEX, among other issues.
"Recently larger caps have been doing better. But we do believe that for us the best opportunities still lie in exploration and small- to mid-size production … that's our sweet spot" — Maria Smirnova, Sprott Asset Management
John Feneck of Feneck Consulting has honed in on an even smaller range of companies, focusing on mid-, small- and micro-cap gold stocks — he mentioned Thunder Mountain Gold (TSXV:THM,OTCQB:THMG) and Idaho Champion Gold Mines (CSE:ITKO,OTCQB:GLDRF) as players that he likes.
"There's been a huge disconnect with the gold equities and the price of gold, and that's why we're buying gold equities like the ones I named that are completely bombed out and completely misunderstood, with no analyst coverage" — John Feneck, Feneck Consulting
With gold stocks in mind, we asked our Twitter followers this week how the gold companies in their portfolios have been performing. Responses were split fairly evenly between positive, neutral and negative.
I want to close out this week's overview with a quick note on INN's Q1 content.
At the end of every quarter, our reporters reach out to experts in the many industries we cover; they then compile the information these market watchers share to give our audience a look at the past quarter and what's ahead.
This week we published quarterly reviews for a slew of topics, including favorites such as gold, silver, lithium and uranium. I highly recommend checking out this content if you want to find out what's in store from commentators at the World Gold Council, the Silver Institute, Benchmark Mineral Intelligence and many more.
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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.
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