Elements202205

AuAg Monthly Letter

We believe in a bright future. We want to create a future where we have a sound sustainable world and a sound financial system. This future is enabled by the unique properties of the elements. The elements from our world, for our world.

We have seen a continued eventful 2022. The megatrends that the funds provide exposure to, "monetary inflation" and "the transformation to a green world", are becoming more apparent every day. The recent interest rate hikes have caused turbulence in the market. At the same time, we still have a difficult situation with the war in Europe, where we do not yet have a peaceful solution in sight.

This month, our funds have been launched on three platforms. We're happy that both of our funds are now live at Movestic. AuAg Precious Green which was just added has become popular and sought after.

We are also grateful that Söderberg & Partners has added both funds to their fund selection. AuAg Silver Bullet and AuAg Precious Green are also part of the recently launched fund platform Levler.

Do not forget to keep an eye out in our Research Centre, where you will find all the new articles, videos and podcasts that we have participated in. Of course, what we have published earlier is also available there if you missed it.

The Funds

Click on one of the funds below to get to the respective fund page. There you can find more information, such as: how to invest, the updated fund sheets (under "Documents"), and the live ticker price on the holdings. 

• AuAg Silver Bullet
• AuAg Precious Green
• AuAg Gold Mining ETF

Highlights

• Over the past 12 months, the USD has strengthened by 18.8% against SEK and 14.15% against EUR. Strong currency trends have a significant impact on the financial system. The strength in the USD has now begun to reverse slightly since mid-May. As we described earlier, everyone is on the same side of the boat in this "long-USD trade". As always, one day, it will result in an equally strong opposite trend. Perhaps it has already started now that the market has priced in all US interest rate hikes and now wants to position itself before Europe also begins to communicate sharper interest rate hikes.
• The precious metal mining companies continue to show solid cash flows and seem to continue the trend with higher dividends in 2022. In 2021, the average dividends for the companies were 2.24% compared with the companies in the S&P500, where the corresponding dividends were 1.27%. Acquisitions of companies in the sector also show strength. The latest is Gold Fields, which wants to buy Yamana Gold and thus form the world's fourth largest gold producer.
• Gold fell -3.1% in USD and -4.8% in EUR during the month. It is worth noting that gold set a new all-time high in EUR as recently as March 2022. Gold has performedwell during the 2000s, and the extremely expansive money supply growth speaks for gold for a long time to come. If, on the other hand, you look at the market in the short term, indicators such as COMEX positionings and sector sentiment are important to buy low and sell high.

Outlook

• COMEX positionings were negative at the end of March but reversed to positive in April. They were very positive at the end of May as the so-called "commercials" have reduced their short positions to historically low levels. Sentiment in the sector has also fallen to very low levels, making ordinary investors, "retail", sell more and more. Commercials have continued to buy back what was sold. When gold and silver break through more and more moving averages, retail will gradually start buying back again. Consequently, the increasing price will generate more purchases, and the price will rise even more.
• There is significant uncertainty regarding how the broad stock market will be able to shake off and come back from thisyear's sharp decline.We have not seen any real change in the war in Ukraine, price inflation levels, a halt or pause in interest rate hikes, China'slock-downs or the world's raw material/component deficiencies. At least the situation in China should be resolved soon, which would positively affect all markets.

The Elements

Precious metals are saving lives. Since the discovery of Cisplatin in the 1960s, one of the components used to treat different cancers, platinum-based metal complexes have become a vital tool for modern medicine. There are probably many future uses of platinum, gold, silver, iridium and ruthenium and combinations of metals in cancer treatments.

One example is targeted cancer treatment using gold, platinum, and iron. The iron content allows the drug to be directed straight into a tumour using magnetic waves. Once there, the cytotoxic gold and platinum nanoparticles destroy the cancer cells without harming other healthy cells in the body. There is still testing that needs to be done. But the ability to direct the drug could eliminate the severe side effects of traditional chemotherapy, which spreads throughout the body, affecting both cancerous and healthy cells.