Comparing Barrick, Newmont, or Agnico in the gold mining sector
In the ever-changing world of finance, gold has emerged as a beacon of stability for investors. Experts at Fidelity International and Goldman Sachs have forecasted a strong gold price rally for the rest of 2022 and beyond, driven by factors such as geopolitical uncertainty, inflation concerns, central bank demand, and a weaker US dollar.
Ian Samson, a multi-asset manager at Fidelity, has increased some portfolios' gold allocation due to the prospect of an accommodative Fed policy. This move reflects Fidelity's belief that gold remains a critical hedge against inflation and geopolitical risks, expecting prices to gain further as these headwinds persist.
Goldman Sachs analysts have similarly forecasted a bullish outlook for gold. They highlight that elevated inflation pressures, volatile financial markets, and sustained investor interest in safe-haven assets are key drivers supporting higher gold prices.
The main drivers for this predicted increase are not directly linked to the gold price rally or the factors driving its predicted increase. Instead, they stem from geopolitical instability, inflation expectations, US dollar weakness, central bank buying, and interest rates and real yields.
Ongoing geopolitical tensions create uncertainty, prompting investors to seek safety in gold. This demand is expected to intensify if conflicts escalate or worsen economic conditions. Persistently high inflation globally undermines real returns on bonds and cash, making gold attractive as a store of value. The dollar’s relative weakness typically supports higher gold prices because gold is priced in dollars. If the dollar weakens due to monetary policy or economic concerns, gold becomes cheaper for holders of other currencies, boosting demand.
Central banks continue to add gold reserves as a diversification strategy, supporting higher prices over a medium- to long-term horizon. With interest rates stabilizing or rising only gradually, real yields (adjusted for inflation) have stayed low or negative, reducing the opportunity cost of holding gold and increasing its attractiveness.
The Best of Gold Miners Index, offered by AKTIONÄR, provides an option for investors who are undecided about investing in individual gold producers. This index includes not only industry giants like Newmont, Agnico Eagle Mines, and Barrick Mining, but also other gold industry representatives.
While the detailed figures from Fidelity and Goldman Sachs for the rest of 2022 are not explicitly specified, their assessments closely align with the broader expert consensus and analysis by institutions like the World Gold Council and market analysts. Numerous experts predict a continuation of the gold market rally, with gold potentially trading sideways with a slight upward bias in the near term (an additional 0%-5% appreciation in late 2022). However, under scenarios of worsening economic conditions or greater geopolitical risk, gold prices could rise by 10%-15% or more.
Goldman Sachs also expects a gold price increase up to 4,000 dollars, a prediction that has not been explicitly linked to the Best of Gold Miners Index. Boersenmedien AG, the developer of the Best of Gold Miners Index, has a cooperation agreement with the issuers of the securities, from which it receives remuneration.
It's important to note that the author holds direct positions in Agnico Eagle Mines and Newmont. Several funds have reportedly doubled their gold positions within a year, reflecting the growing interest in the gold market.
In conclusion, the gold market rally is expected to continue, driven by a combination of factors including geopolitical instability, inflation concerns, central bank demand, and a weaker US dollar. Investors seeking to capitalise on this trend may consider the Best of Gold Miners Index, which offers a diverse portfolio of gold industry representatives. For more information about the Best of Gold Miners Index and associated products, visit the provided link.
Real-estate investors might find gold an attractive addition to their portfolios, given the expected continued rally in the gold market due to geopolitical instability, inflation concerns, central bank demand, and a weaker US dollar. Fidelity and Goldman Sachs experts suggest that gold could function as a critical hedge against inflation and geopolitical risks, making it an appealing option for investors seeking safe-haven assets.
