“Huge Rebound” Coming for Oversold Gold Stocks

Alain Corbani: “Huge Rebound” Coming for Oversold Gold Stocksyoutu.be

Gold played a defensive role in 2022, but one key factor is standing in the way of a price rise.

Speaking to the Investing News Network, Alain Corbani, head of mining at Finance SA and manager of the Global Gold and Precious Fund, said that an increase in investment demand would break the yellow metal out of its current rut.

“The only real aggregate that will change the momentum is investment demand, which is the speculative part of the total component of global demand. And we don’t see it here, it’s totally absent,” he said.

Corbani believes inflation, interest rates and the US dollar have all peaked, but said gold investment demand is low because most market participants don’t share that view. “All it takes is this investment demand to start showing some sign of life,” he explained. “(But) as long as we don’t have it, gold will evolve in this neutral, boring mode.”

When it comes to gold stocks, Corbani said inflation hurt their margins in 2022. However, with inflation now past its highest point, he thinks the year ahead looks brighter for gold-focused companies.

“Since inflation has peaked, we do believe that those margins with a higher gold price will trigger a huge, huge rebound in the gold space — a huge rebound,” he said. “The same way we had this rebound in 2015, the same way we had this rebound in 2018. We are heading towards an identical rebound, and that rebound actually started, believe it or not, from the lows of a month ago.”

Overall, his advice for precious metals market participants was to stay patient a little longer. “It’s not a question of years, it’s a question of months at best,” said Corbani about the potential timeframe for a gold price turnaround.

Watch the interview above for more of his thoughts on gold and gold stocks in 2023.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.