Markets

When the money dies, the eye turns to gold

In response to the corona virus, the central banks started the money printing machines. Fiat money is increasingly losing value – raw materials are gaining.

The chance of higher raw material prices is great, especially with precious metals. Because the national debt is enormous. In the US, government debt will hit $ 20 trillion in the current fiscal year. In our country, too, more and more warnings are given about the consequences of increasing debt.

In the US, the US Congress of Accounts reports and sounds the alarm, as do other institutions such as the US Taxpayers Association. Covid-19 has fueled debt in many countries. The tried and tested gold helps here. This year, the price has risen by around 30 percent, making investments in gold and gold companies increasingly lucrative. Many gold companies have been able to increase their dividends due to the high price of gold. When the gold price boom in 2011, many companies spent a lot on acquisitions. When gold prices then went down, it led to billions in depreciation.

Today gold mining companies are more cautious and no longer chase after volume in production. Some heavyweights in the gold industry have already reduced their planned production for the current year. Investments could be worthwhile in medium-sized or smaller companies, especially if they score points with attractive projects. Because then there is a chance that companies will continue to pay dividends in the future.

Something like that Caledonia mining – https://www.youtube.com/watch?v=rt4tRvIoIi8&t=78s – who have been paying dividends for years, or Karora Resources. Caledonia Mining has local investors who have stakes in the Blanket gold mine in Zimbabwe. This has ensured acceptance among the population. Caledonia Mining aims to produce around 80,000 ounces of gold by 2022. Dividends are paid.

Karora Resources – https://www.youtube.com/watch?v=PUjH-P23mYI&t=2s – Owns the Beta Hunt and Higginsville gold mines in Western Australia and predicts full year 2020 gold production of 90,000 to 95,000 ounces.

Current company information and press releases from Caledonia Mining (- https://www.resource-capital.ch/de/unternehmen/caledonia-mining-corp/ -) and Karora Resources (- https://www.resource-capital.ch/de/unternehmen/karora-resources-inc/ -).

In accordance with Section 34 of the WpHG, I would like to point out that partners, authors and employees can hold shares in the respective companies addressed and that there is therefore a possible conflict of interest. No guarantee for the translation into German. Only the English version of these messages applies.

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