Hedge, hedge, hedge….

The Bloomberg news service is known and respected around the world. When an ex-US Federal Reserve Chairman writes a column on this platform, many investors sit up and take notice. In mid-January, Bill Dudley actually wrote on Bloomberg. Dudley was the president of the Federal Reserve Bank of New York from January 2009 to June 2018. So he had a weighty word in the ranks of the Federal Reserve as a whole. In any case, he knows something about his subject, and if he writes, his successors and important politicians will read it.

Dudley assumes that the U.S. Federal Reserve will turn the interest rate wheel much more than most people expect. This is because the central bank will have to admit that it has estimated inflation to be too low or not dynamic enough. This is also shown by the seven percent inflation rate in the USA in December. That was a 40-year high. What’s more, wage growth has picked up and reached its highest level in ten years. That will keep inflation high.

In Europe, the inflation rate also rose significantly, but at five percent it is well below the American rate. Wages have also not yet really taken off. This will give the European Central Bank more leeway and therefore more time to raise interest rates than its US counterpart. This in turn means that a significantly higher US dollar can be expected against the euro. Moreover, as commodity prices are not expected to weaken much, since demand should still be very robust in the initial period of interest rate hikes, investors in the euro zone can benefit twofold. First, they will enjoy higher commodity prices. Second, they can hedge against a possible collapse of the euro. This also applies in particular to the gold price. Those who speculate on this development and thus want to hedge can do so, for example, with shares in gold companies – and with diversification included with royalty companies.

Good examples of promising portfolio additions can be Empress Royalty and Osisko Gold Royalties – https://www.youtube.com/watch?v=IJM_VsIaxmw .

The latter owns royalties and precious metal offtakes in North and South America. In 2021, they generated just under 80,000 gold equivalent ounces.

Empress Royalty – https://www.youtube.com/watch?v=d-ptx2yvyfU – has a portfolio of currently 17 development and production stage assets.

Latest corporate information and press releases from Osisko Gold Royalties (- https://www.resource-capital.ch/en/companies/osisko-gold-royalties-ltd/ -).

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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