Top Stories This Week — Experts Talk Market Volatility, Fed’s Next Move, Gold Price at VRIC
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We’re taking a break from our usual format this week so I can give you a recap of the Vancouver Resource Investment Conference (VRIC), which ran from May 17 to 18.
This is the first time VRIC has been live since January 2020, and it was my first in-person event since all the way back in March 2020 — it was definitely exciting to be back on the show floor having face-to-face conversations, and I’m excited to share our interviews with you over the next couple of weeks.
For now, let’s talk about VRIC themes. Although it was clear attendees were glad to be off Zoom and back in the real world, there was a sense of sobriety given the current state of the broader markets.
Major indexes like the S&P 500 (INDEXSP:.INX) and the Dow Jones Industrial Average (INDEXDJX:.DJI) continued to tumble this week, with the former down about 18.5 percent year-to-date and the latter down around 14.5 percent.
Experts at the show had a variety of advice about handling this volatility, which you’ll see as we start publishing our videos. Well-known contrarian Rick Rule of Rule Investment Media said he’s proceeding with caution, but has a shopping list ready and “absolutely” sees today’s circumstances as a buying opportunity.
On the flip side, Mercenary Geologist Mickey Fulp said he’s focused on taking profits in the juniors when he can, and seeking safety in assets like physical gold and farmland.
Another key topic was the US Federal Reserve. Unsurprisingly, the consensus at VRIC was that the central bank took much too long to act on inflation — now that it’s begun raising rates, with two hikes in the cards so far, opinions are split on how far the Fed will get and what the consequences will be.
For her part, former Fed insider Danielle DiMartino Booth said during a panel that she’s happy to see Chair Jerome Powell returning to his more hawkish roots. She mentioned bankruptcies and junk bond spreads gapping out as signs that things are breaking, and she thinks Powell will keep going until “something big” cracks.
“We’re watching things like today’s activity in the stock market. We’re watching junk bond spreads gap out, we’re watching bankruptcies increase, we’re watching sales decrease … something’s going to break. And we’re witnessing things breaking. I would postulate that (Powell is) going to keep going until something big breaks. That means something systemic, (something) major” — Danielle DiMartino Booth, Quill Intelligence
Of course, given everything going on in the world, one of the top questions at VRIC was why the gold price isn’t higher. Although it spiked above US$2,000 per ounce earlier this year as the war between Russia and Ukraine broke out, it was down around US$1,845 at the time of this writing on Friday (May 20) afternoon.
Again, diverse answers were given about this, and you’ll see them all come through in our content. For now, one thing I want to point out is that very few people expressed a bearish outlook on the yellow metal — although many think a higher price will take time, there seems to be little doubt that this will emerge moving forward.
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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.
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