Market analysts expect a good support for the gold price, as stagflation fears and the growing recession are present.
The Fed's 75 basis point rate hike was the largest rate hike in nearly 30 years. This has shaken up investors, thus stoking concerns about a recession. According to the Fed, another 75-point rate hike could come in July, as well as a 3.5 percent interest rate by year's end. So, the Fed is worried. And the otherwise normal relationship between interest rates and gold is different today. So weaker stock markets and higher gold prices could come.
Inflation expectations are not yet as high as they were in the 1980s, for example, when they were around 9.7 percent. At that time, the Fed Chairman had pushed up interest rates to such an extent that, on the one hand, this brought inflation to a standstill, but on the other, it heralded a recession. The risk of inflation is still rising today, but a recession can perhaps also be avoided, because things are not yet as dramatic as they were in the 1980s. Economists at Goldman Sachs, for example, have raised the probability of a recession next year from 15 to 30 percent. Goldman has now lowered the estimate regarding GDP for the fourth quarter of 2022 from 1.3 to 0.9. Anyway, being a gold investor is certainly a good idea in these times. Two gold producers, for example, are Caledonia Mining or Karora Resources.
Caledonia Mining - https://www.youtube.com/watch?v=kNcPzXxVTno - owns 64 percent of the Blanket mine in Zimbabwe. This has been producing successfully for years.
Karora Resources - https://www.youtube.com/watch?v=Fj9xXKHciGE - has two producing gold projects in Western Australia. Production is expected to increase to between 185,000 and 205,000 ounces per year by 2024.
Current corporate information and press releases from Caledonia Mining (- https://www.resource-capital.ch/en/companies/caledonia-mining-corp/ -) and Karora Resources (- https://www.resource-capital.ch/en/companies/karora-resources-inc/ -).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
Disclaimer: The information provided does not represent any form of recommendation or advice. Express reference is made to the risks in securities trading. No liability can be accepted for any damage arising from the use of this blog. I would like to point out that shares and especially warrant investments are always associated with risk. The total loss of the invested capital cannot be excluded. All information and sources are carefully researched. However, no guarantee is given for the correctness of all contents. Despite the greatest care, I expressly reserve the right to make errors, especially with regard to figures and prices. The information contained herein is taken from sources believed to be reliable, but in no way claims to be accurate or complete. Due to court decisions, the contents of linked external sites are also co-responsible (e.g. Landgericht Hamburg, in the decision of 12.05.1998 - 312 O 85/98), as long as there is no explicit dissociation from them. Despite careful control of the content, I do not assume liability for the content of linked external pages. The respective operators are exclusively responsible for their content. The disclaimer of Swiss Resource Capital AG also applies: https://www.resource-capital.ch/en/disclaimer/
