The gold price is trading close to record highs, but gold mining shares, especially junior companies, are still heavily undervalued in some cases.
Margins are high, which is no wonder given the magnificent rise in the price of gold. Many large producers also boast impeccable balance sheets and share buybacks. However, the junior commodities sector offers particular opportunities. The silver price is also consolidating at a high level. In terms of price, silver has just broken through resistance at just under 35 US dollars per troy ounce. Although the price of the precious metal has managed to break through above USD 34 per ounce, there has not yet been a rally in smaller companies. So far, institutional and private capital inflows into mining stocks have been rather low.
A wave of mergers and acquisitions could be imminent in both the silver and gold sectors. This is because large companies have invested little in recent years and will be looking to replenish their dwindling reserves. After all, it takes many years to get from the discovery of a new deposit to production. Many experts therefore see great potential in junior companies, often more in gold shares than in the gold price. Even if the gold price tends to move sideways in the near future, gold shares should perform very well due to the high gold price.
Gold and silver also benefit when the US dollar is weak. And the sentiment suggests that foreign investors no longer trust the US, and therefore the dollar, as much. Gold and silver, on the other hand, are currency metals that central banks are known to be betting heavily on and buying. The third downgrading of the US credit rating by the rating agency Moody's has also made headlines. So, let's take a quick look at solid precious metal companies.
Revival Gold - https://www.commodity-tv.com/ondemand/companies/profil/revival-gold-inc/ - is developing the Mercur gold project in Utah, which is ready for production at relatively short notice. The company is also preparing the approval process and the ongoing exploration of the Beartrack-Arnett gold project in Idaho.
In British Columbia in the Golden Triangle, Tudor Gold - https://www.commodity-tv.com/ondemand/companies/profil/tudor-gold-corp/ - owns the promising Treaty Creek project. It is therefore located in an area with former producing mines that are about to be developed.
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.
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