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Barrick Gold, Royal Dutch Shell, Newmont - which shares should you have now?

Mario Hose Mario Hose, news.financial
0 Comments| April 30, 2020

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Stock markets around the world are in recovery mode. Fear and panic over the spread of the corona virus is fading and greed is returning. COVID-19 has kept the world in suspense. After hesitant action by governments in Europe and North America, although curfews were imposed in the country of origin, China, as early as January 2020, drastic measures were not taken in most countries until March, which led to a social and economic standstill. Politicians were confronted with the uncertainty that many experts held different opinions and little faith could be placed in information from China. Many lives may have been at stake. A test for the people, politics and economy.


Hard words from a politician

The Lord Mayor of Tübingen, Boris Palmer (Die Grünen), personally drew a conclusion on the current measures to stem the spread of COVID-19 and summed it up in hard words: "We are saving people who might die soon anyway." The statement refers to the meanwhile gained knowledge that most victims of Corona are very old or have already had previous illnesses. However, for politicians, who decide on life and death with their decisions, the pressure was enormous.

The information from the much-cited John Hopkins University could only serve as a trend due to the different regional survey methods. Sometimes the quality of this data fog can also lead to deceptive conclusions. Caution was the order of the day.


All-clear in Germany

The all-clear was recently sounded by the first reliable figures from North Rhine-Westphalia, with over 17.5 million inhabitants the most populous state in Germany. On the basis of the number of deaths in the month of March 2020, fortunately, no development could be found that suggests that COVID-19 increased the death rate. According to current figures, around 18,800 people died in the entire federal state in March 2020. In the same period last year, the number of deaths was around 19,100.

The preliminary death figures for the first quarter of 2020 also give no indication of abnormalities. Thus, 53,900 people died in the first three months of this year compared to 55,600 in the same period last year. The figures for April 2020 will provide even more certainty for decisions on further steps. Finally, it remains to be seen whether the containment measures had an impact on this stable development.


Gold protects against inflation

Due to the extensive financial policy measures taken by central banks and governments worldwide, it is now expected that the money glut will lead to a rise in inflation. For this reason, investments in the gold sector can be particularly lucrative in the coming years.

In addition to the mining companies Barrick Gold (TSX: ABX) and Newmont (TSX: NGT), the small companies focusing on the discovery of new gold deposits also offer enormous price potential. Desert Gold Ventures (TSXV: DAU), Osino Resources (TSXV: OSI), Scottie Resources (TSXV: SCOT) and Triumph Gold (TSXV: TIG) offer investors the opportunity to participate in early stage value creation.


Rely on the recovery of the oil market

But in the current situation, energy companies such as BP (NYSE: BP),Royal Dutch Shell(NYSE: RDS.A) and Saturn Oil & Gas(TSXV: SOIL) also offer opportunities to position for a global economic recovery. Demand for crude oil is expected to increase significantly again in the coming months.

Due to the volatility of the oil price in recent weeks, it can be assumed that there will be fewer producers in the USA in the future. The financing banks will avoid the shale producers in the future, which will possibly lead to the fact that the USA will import more oil again, which plays into the cards of producers like Saturn Oil & Gas in Canada.


CONFLICT OF INTEREST & RISK NOTE
We would like to point out that Apaton Finance GmbH, the owner of news.financial, as well as partners, authors or employees of Apaton Finance GmbH may hold shares in the aforementioned companies and that there may therefore be a conflict of interest. Further details can be found in our ´Conflict of Interest & Risk Disclosure´.


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