The Financial Post reports in its Tuesday edition that gold bugs should be having a moment: Inflation is high, stock markets are down, recession is looming -- and there is war in Europe. The Post's Gabriel Friedman writes that despite the gloom, the price of gold, along with equities of gold miners, are in free fall.
Last week, gold fell 3 per cent to $1,665 per ounce after the release of data that showed that U.S. inflation hit 8.3 per cent in August, the opposite of what you would have expected. Gold has now sunk 20 per cent since hitting $2,087 per ounce in March.
A bearish mood seems to have infected the sector, with even the largest gold producers looking to diversify.
Last week, Agnico Eagle Mines announced it would invest $580-million to gain a 50-per-cent share in the San Nicolás copper-zinc project in Mexico.
For Agnico Eagle, which is solely focused on precious metals, making such a large investment in an unbuilt copper-zinc project that is still years away from production represents a new direction, and may be a harbinger of how the gold miners seek growth in the future.
Gold companies may look to diversify their commodities as electrification and green energy themes attract investment attention.
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