Given the escalation of the Hamas-Israel war, safe haven assets such as gold are gaining appeal. One way to invest in them is through Cedears.
Gold at almost US$2,000: Are mining companies’ Cedears becoming attractive again?
Depositphotos
The price of gold rose strongly in October amid the escalation of the war between Israel and Hamas. It is that in times of uncertainty in the markets, the metal is considered a safe haven asset. Although there are many ways to invest in it, one of them is through Cedears of companies that are dedicated to mining, which registered succulent profits last month. Is it time to bet on this sector?
It should be noted that Gold advanced more than 7% in October and surpassed the key level of $2,000 an ounce last week.
Specifically, On October 7, the invasion of Hamas militants entering Israeli territory by land, sea and air began a new stage in this armed conflict that has been going on for decades. As a result, commodities such as oil rose, given the possibility that other countries in the area would enter the conflict, and there would be problems with global supply. While, Gold advanced as it is considered a defensive asset in times of war.
Investors seek refuge from volatility
Eugenia de IruretaHead of Research Bavsain dialogue with Ambit expressed: “What we saw in October was a rotation of portfolios with investors seeking refuge in a context of high volatility: level of global activity threatened by a new war, companies that in the presentation of quarterly results predict weak demands, inflation that remains a threat in the United States and encourages the continuation of a restrictive monetary policy and, with this, the prospects for new increases in the rate by the FED and, something that worries the market even more, the maintenance of high rates for longer.
Gold miners: among the Cedears that rose the most in October
Maximiliano DonzelliHead of Research at IOL investonlinehighlighted that “under this challenging scenario for the stock market, we have had some Cedears that have stood out above the rest during October.”
In this regard, he mentioned the gold miner, Harmony Gold (HMY) that went up 30% in pesos . In this case, “the company’s shares registered an upward momentum, which occurred in part in a slightly more optimistic context for the price of gold globally, which skyrocketed in October due to tensions in the Middle East,” Donzelli explained.
Secondly, he highlighted the Cedear of another mining company, Barrick Gold (GOLD), which rose 17.6%. “It is the largest gold miner in the world. It is headquartered in Toronto and has more than 23 operational mines throughout the planet. In line with the first company in this ranking, both have benefited from the rise in the metal, which registered an appreciation of almost 8% in the month of October,” he concluded.
What to expect going forward? Is it a good time to invest in gold?
“In this context, Assets like gold become attractive and gain even more interest the more uncertainty there is in the market. And, of course, they stimulate companies with businesses linked to metal. Betting on gold in this context is a good defensive strategy knowing that it is also one of the first instruments from which investors come out in more optimistic moments,” he explained from Irureta.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
