NEM - GGN: Compelling Dividend Yield But No Growth Despite Bullish Gold
2023-04-16 01:50:50 ET
Summary
- Precious metals are in very positive momentum as their demand for investment benefits from their capacity as an effective hedge against recession, inflation, and fears of a banking crisis.
- Buying the precious metal after last month's sharp rise raises doubts as to whether it can still effectively perform the hedging function, which implies the risk of overvaluation.
- In the sense that an ounce can now cost too much compared to what it can still offer in terms of portfolio value preservation.
- As a result, GAMCO Global Gold, Natural Resources & Income Trust, which relies heavily on precious metals price movements, may not generate capital appreciation from these share price levels, but its dividend yield is still compelling.
- It is unknown how long this bullish sentiment for precious metals could last, but this coupled with likely supportive crude oil and natural gas prices sets the stage for further positive cycles in GAMCO's share price.
For further details see:
GGN: Compelling Dividend Yield But No Growth Despite Bullish Gold