Monthly Letter

Elements | May 2023

16/05/2023

Below you will find this month's letter from us at AuAg. Notice that this month's letter is "May" and not "April". You haven't missed anything, we have only chosen to give the letter the name based on the month it is sent out.

During the month, our funds have become available on several platforms. Pareto in both Norway and Sweden has added all our funds. Alwy has also included the funds and created a savings package with us.

AuAg Essential Metals has been launched on new platforms. In addition to the two mentioned above, it is now available to buy at Nordea in Sweden, Norway, and Finland, as well as at Svenska Fribrevsbolaget.

In February, we had our first digital investor meetup, where we presented our outlook for gold and silver. Thank you for the great attendance and for asking so many good questions. We have set a date for the next digital investor meeting, June 20th, at 11:00. More info and registration are coming closer to the event.

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

Here are a few media links from the past month:

Investment Solutions

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 Thoughts

April was a month with much of the same as before, but one event that stood out was Elon Musk's attempt to reach further into space, more about this further down.
As before, the central banks continue to raise rates but, at the same time, have become somewhat softer ("more dovish") in their communication about continued rate hikes. We believe they will pivot and that we will see interest rate cuts later in the year.
After the first two bank collapses in the United States, many hoped that the banking problems were over. Then another bank fell, and the US has now, in a short time, had three of the four biggest bank failures in US history. At the end of the month, new clouds of worry appeared regarding several new banks, such as, e.g. PacWest and Western Alliance. These recent events may cause the bond and stock market sentiment to change as it now appears to be a major systemic failure and not a problem with individual banks.
The war in Ukraine continues without any real progress towards peace. It is instead the case that it escalates both concerning armed operations and loss of human lives. This increases the risk of an even worse disaster. All this at the same time as many people in the Western world now live a relatively normal everyday life. The tragic events no longer dominate the news as they did a year ago.
An important phenomenon for the world that is gaining momentum is the increase in the number of countries that want to cooperate with the BRICS countries on trade, currency cooperation, and new payment routes bypassing the traditional SWIFT system and the US dollar. This may be one of the most significant changes of our time, as the dollar has been the world currency since WWII and has given the US much power.
Gold has, during the month, broken above USD 2000 per troy ounce and has oscillated above and below this price recently, depending on the latest news and central bank communications. Similarly, silver prices have hovered around $25 per troy ounce. This plateau indicates that we might see a charge for a more extensive lift that will come as soon as the central banks have to back off from today's interest rates.

AuAg Trends

An exciting event during the month was Elon Musk's launch of Starship, which is the world's largest rocket to date. Although the rocket exploded after four minutes, it is considered a breakthrough for the space industry.
Space travel depends on materials that can withstand extreme temperatures and radiation. Common materials that are usually used are various alloys based on aluminium, as well as carbon fibre. Recently, they have started to build more in steel because it has both good properties regarding strength, weight and price. SpaceX chose to construct "Starship" in a special kind of steel with an extra high percentage of chromium, which makes it more durable at low temperatures. [Source]
Due to its conductive properties, copper is the third most used metal in rockets. For example, the inside of the rocket engine, which can reach up to 3000 degrees, is protected by a layer of copper. Other essential metals are i.a. titanium, silver, and gold. These metals are used in smaller quantities but are still absolutely necessary for us to be able to go into space. [Source]