Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
WGX is trading at its all time low. Given it’s a profitable company why is it so low and surely this represents a great buying opportunity? Your last update indicates ‘MM likes WGX under $2’ but it’s a fraction of that now. What (and when) do you think will be the trigger for gold stocks like this to turn around? Surely it has to be soon? Cheers KD
Hi Kim,
The trigger for gold stocks will almost certainly be a pullback in US bond yields and the Dollar which are inversely correlated to gold. These 2 elephants in the room have dictated to financial markets throughout 2022 and until they turn it’s hard to see gold and its respective stocks follow suit in any meaningful manner.
Perhaps the Fed’s next meeting on November the 2nd will be the pivot point but until we see some clear signs the Fed is adopting a more dovish stance it’s hard to get overly excited towards gold hence we haven’t increased our exposure i.e. it’s a case of we believe it will happen but when is the million dollar question.
Operationally, a lot of gold stocks have also been struggling, staffing issues & other cost pressures seem to be very high in the gold space as referenced by both St Barbara (SBM) and Evolution (EVN) this week
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