The Next Major Trends in the Precious Metals Mining Investing

precious metals
Published on: May 31, 2022
Author: Philip Tai

Over the past months, the precious metals sector has seen increased interest from investors due to global conflicts, increased inflation and the rise of clean energy and battery technologies, particularly in the silver sector.  Gold prices saw a peak in March, reaching nearly $2000 per ounce but in May, prices remained at the $1800 level.  Silver, likewise, saw its peak at over $26 per ounce in March and now, is hovering at the $22 level.

As prices have reached a period of consolidation, what are the trends for precious metals in the coming weeks that will affect gold and silver prices?

The Major Trends for Precious Metals in June 

Increased Mergers and Acquisitions in the Sector  

Gold prices have stagnated as major producers, replete with cash, have begun looking for and closing acquisitions.  M&A between gold companies jumped in 2021, and deals were expected to increase in 2022 as miners scramble for a shrinking number of producing assets to keep their pipelines full.

The $10.62 billion merger between Agnico Eagle Mines Ltd. and Kirkland Lake Gold Ltd. led the way among a wave of large gold deals in 2021. The market was also shocked by Newcrest Mining Ltd.’s $2.78 billion takeover of Pretium Resources Inc. and Kinross Gold Corp.’s $1.44 billion acquisition of Great Bear Resources Ltd.

Adding to the list, on May 31st 2022, Gold Fields of South Africa announced that it has agreed to buy Canada’s Yamana Gold for US$6.7 billion in stock.  The merger will create the world’s fourth-largest gold miner.

Investors becoming Numb to Global Instability

While gold shot up in March as Russia’s tanks rolled into Ukraine, gold prices leveled off and dropped by May as the war continued.  The initial shock of the conflict brought lower stock prices and higher commodity prices but investors are now more concerned with inflation, rising interest rates and now, inflation.  More importantly, the threat of Russian cyberattacks against the west have not materialized.

Moving forward, investors should pay attention to commodities as their prices will be affected by the conflict and its impacts on global supply chains.

Local Political Risks Growing Worldwide  

Political risks seem to be growing globally with Mexico and Chile announcing steps towards nationalizing key metals sectors, which may affect gold and precious metals.  In Chad, recently there have been clashes between artisanal gold miners that left 100 dead.  As local politics become more important, investors should pay attention to companies with projects in safe jurisdictions, including Canada, the US, Australia and Western Europe.

Newrange Gold (TSXV:NRG), (OTC:NRGOF) Making Progress on its Exploration Projects

On May 17th, Newrange gold announced its update on its exploration projects in the Red Lake District of Ontario and the Walker Lane Trend of Nevada.

The company provided notable updates on its North Birch Project, Argosy Gold Mine Project, Pamlico Project.  Take a look at the press release here.

Interestingly, the press release announced the following:

“As part of the aforementioned strategic review, Newrange is actively reviewing several potential acquisition targets in order to maximize shareholder value.  The Board is committed to finding a new flagship project that will have the potential to provide significant upside.  Discussions are ongoing in this regard and the Company will inform shareholders of any progress in a timely manner. “ 

Keep an eye on Newrange in the coming weeks as more announcements hit the market.

Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.

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