Elements | January 2023

It has been a busy start of the new year with the launch of our new fund, AuAg Essential Metals, and the planning of some exciting initiatives in 2023. The market has also started strongly, although there are many uncertainty factors in our world, more about this below.

*AuAg Essential Metals has been live for over a month. We are happy and grateful that so many of you have already invested. We have more than 2000 investors at the time of writing, and the fund is really off to a flying start. AuAg Essential Metals is already available on the following platforms: Alpcot, Avanza, Fondo, Max Matthiessen, Nordnet, SAVR, and Strivo. Read more about the fund on the *fund page.

*A new international initiative that we will test during 2023 is to organize quarterly digital investor meetups in English. The purpose of these is that everyone, both you who have already invested, and you who are curious about investing, get the opportunity to listen to an interactive presentation by us. The first investor meeting is on February 16th. Of course, we will post the recording on our website for those who cannot attend live. More information about the investor meetup and registration can be done at the *following link.

Use our unique "Research Centre"* on an ongoing basis to take part in our current view of the market and the macro environment, as well as portfolio updates. We communicate all the time.*

Here are a few media links from the past month:

• Article: CNBC - Gold surges to 6-month high, and analysts expect records in 2023
• Video: Trading Direkt - Vad tror AuAg-förvaltaren om 2023? (Swedish)
• Article: GoldSilver.com - 2023 Gold Price Prediction, Trends, & 5-Year Forecast
• Article: Morningstar - Bästa och sämsta fonderna 2022 (Swedish)
• Article: Kitco - Gold's bull market is just beginning as European fund managers take a bigger stake
• Video: Capital Challenge by CISI - Gold and Mining Outlook 2023
• Publication: AuAg Gold, Silver and Mining Outlook 2023
• Portfolio Update: AuAg Precious Green January 2023

AuAg Thoughts

• Last time, we wrote about new upward momentum on the stock market, which became reality at the beginning of 2023. We see a very high stock market optimism in a macro environment with many concerns.
• A risk that many seem to ignore completely is the uncontrolled escalation of the war in Ukraine. In recent months, a concerning development in the use of various weapons systems has increased. This has, in turn, increased the risk of further escalation drastically.
• In an environment of sharply rising interest rates, we see large profitable companies trying to protect their margins, e.g. through layoffs. At the same time, hyped tech companies with no profits are now struggling with increased debt costs, which can result in many bankruptcies and further job losses. Governments simultaneously report a substantial net increase in new jobs, which is a bit difficult to understand.
• Today, the market is simply no longer controlled by the creation of growth but rather entirely by reactions to various "job reports" and central banks' communications. Since the financial crisis in 2008, the central banks have created many new "financial buzz-words", such as "Quantitative Easing", "Forward guidance", "Negative rates", "Whatever it takes", "Transitory", and most recently "Soft landing".
• At the beginning of 2022, we still needed zero interest rates to keep the financial system under control, and soon we will have a 5 percent interest rate level, and everything seems to be working just as well. The central banks' vision of a "soft landing" may work, but only if the financial system continues to work well. The question is whether the stock market's current development relies too much on this. The reality of high interest rates in combination with an enormous amount of global debt is that we can end up in a severe recession. Alternatively, it will first result in new stimuli with "Quantitative Easing" and lower interest rates to lift the financial system with rising asset prices (shares/commodities). We believe in the latter, i.e. new stimuli, something we wrote about in our last monthly newsletter. However, this does not solve the real problem but only makes it worse and pushes it forward a bit in time.