Given the current macroeconomic backdrop, the Fed’s aggressive fight against inflation is unlikely to pause anytime soon. This could result in precious metals losing their shine. Amid this volatile backdrop, let us probe into some fundamentally weak and beaten-down stocks, Skeena Resources Limited (SKE – Get Rating) and Argonaut Gold Inc. (ARNGF – Get Rating), which one might avoid now.
Demand for precious metals and their prices soared amid financial system failures and rising fears of recession, making investors cautious about investing in risky assets. For example, gold prices scaled a one-year peak of $2,048.71 in mid-April.
However, persistent price rise remains wobbly due to rising interest rates. The Fed’s incessant fight against inflation made favorable grounds for investments in stocks, government bonds, and other instruments now, whereas attraction to a safe-haven investment diminishes.
Australia’s chief economist noted in Resources & Energy Quarterly Report that as long as geopolitical and economic uncertainty persists, real bond yields are unlikely to decline to negative levels, making investors more likely to seek alternative safe-haven assets, such as interest-bearing bonds. The world’s gold consumption is…
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