In this Article:
- iShares Gold Trust (IAU)
- Invesco DB Commodity Tracking (DBC)
- iShares MSCI Global Metals and Mining Producers (PICK)
- Newmont Corporation (NYSE: NEM)
- Barrick Gold (NYSE: GOLD)
- VanEck Gold Miners ETF (GDX)
Six precious metals investments to purchase for profiting from Russia’s unpredictable President Vladimir Putin’s power play of ordering Russia’s military to invade neighboring Ukraine feature both stocks and funds.
Putin’s power play propelled the price of oil dramatically when he deployed 150,000 troops along the border of Ukraine to position them to begin taking military action on Feb. 22 in the Donetsk and Luhansk regions of the adjacent nation. Putin, who unilaterally recognized those regions of Ukraine as independent countries, chose to challenge the United States and other Western nations to follow through on their pre-invasion warnings that attacking Ukraine would cause them to impose economic sanctions on Russia.
The United States, its allies and partners from the European Union, from the United Kingdom, Canada, Japan and Australia announced their first tranche of sanctions on Feb. 22 within a day of Russia’s invasion of Ukraine that White House officials said goes well beyond the measures imposed in 2014 when Russia and its surrogates seized Crimea. The latest invasion of Ukraine by Putin, who seems interested in trying to recreate the former Soviet Union in one form or another, led U.S. Secretary of State Antony Blinken to call the incursion “the greatest threat to security in Europe since World War II.”
Six Precious Metals Investments to Purchase for Profiting from Putin’s Power Play Aided by Sanctions
After consultations with Germany, Russia’s $11 billion Nord Stream 2 natural gas pipeline will not become operational, as one of the first Western sanctions. Russia’s prized gas pipeline now will go to waste, squandering what would have been a cash cow for the country’s financial coffers, according to the White House.
The decision will relieve Russia’s “geostrategic chokehold” on Europe through its supply of natural gas, with the intent of spurring the world’s energy independence from Russia. The United States and its allies also will fully block the fifth-largest Russian financial firm, V.E.B., a “glorified piggy bank for the Kremlin,” from the U.S. and European financial systems, the White House announced. V.E.B. holds more than $50 billion in assets.
The United States and its allies also will fully block a $35 billion bank, Promsvyazbank, that finances the activities of the Russian military. The sanctions on V.E.B. and Promsvyazbank means the financial institutions can no longer make any transactions with the United States or Europe, and the banks’ assets in both financial systems will be frozen.
iShares Gold Trust (IAU)
The six precious metals investments to purchase for profiting from Putin’s power play provide potent protection from the market’s recent pullback. For example, gold is a traditional hedge against inflation and geopolitical conflict.
The Russia-Ukraine conflict is the latest reason to take positions in investments that pension fund chairman Bob Carlson has been recommending for other reasons. He likes gold, commodities in general, and energy commodities. An invasion by Russia is likely to increase the prices of all these investments, he told me.
“Gold normally rises in times of international uncertainty and turmoil,” said Carlson, who leads the Retirement Watch investment newsletter. “It also usually rises when inflation is rising globally. Gold’s been on a strong run since late January, and I expect that to continue.”
Carlson recommends a gold exchange-traded fund (ETF), iShares Gold Trust (IAU). It is up 3.50% in the last four weeks and 3.59% for the year to date.
Demand for most commodities has exceeded supply since at least early 2021, Carlson counseled. That’s going to continue, he added.
“Many producers reduced production during the early days of the pandemic, and it takes a while to turn that around and ramp up production,” Carlson said. “At the same time, demand increased. So, for demand and supply to balance, the producers have to increase production above pre-COVID levels.”
Invesco DB Commodity Tracking (DBC)
“To profit from this, I recommend investing in an ETF that invests in commodities broadly, such as Invesco DB Commodity Tracking (DBC),” Carlson said. “The fund is up 5.32% in the last month and 11.55% for the year to date. It issues K-1 forms, so it could complicate your tax reporting if you’re holding it at the end of the year.”
iShares MSCI Global Metals and Mining Producers (PICK)
Another good choice is iShares MSCI Global Metals and Mining Producers (PICK), Carlson said. The fund tracks an index of the leading global mining companies that benefit as prices of commodities rise. The fund is up 5.53% in the last four weeks and 8.80% for the year to date.
Newmont Corporation (NYSE: NEM)
Jon Johnson, an options expert who heads the Investment House, Success Trading Group and Technical Traders Alert advisory services, sees now as a time to take some profits in oil investments and buy gold.
Johnson said his indicators point to gold and his preferred pick at this time is Newmont Corporation (NYSE: NEM), of Greenwood Village, Colorado. The gold mining company is breaking upward and could “easily run” to $75, up from its $67.17 close on Feb. 22. Its growth drivers include inflation and geopolitical unrest, he added.
“One thing I always tell people, and they just don’t listen is… take some of the profits made from trades and buy hard assets such as gold and silver,” Johnson advised.
Maybe Putin wants to reconstitute to some degree the former Soviet Union, but what is gained by lighting up the nuclear candles over Ukraine? Johnson asked rhetorically.
“Putin says he will do it, and after reading about him and his beliefs about what is Russian homeland, etc., I think he would not discount it if things did not go Russia’s way in any conflict,” Johnson said.
Barrick Gold (NYSE: GOLD) Is Another Way to Profit from Putin’s Power Play
Mark Skousen, PhD, recommended Toronto-based Barrick Gold (NYSE: GOLD) in his Home Run Trader advisory services, and the stock has rallied 24% this month. The company has gold mines in Argentina, Canada, Cote d’Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania and the United States, while it operates copper mines in Zambia, Chile and Saudi Arabia.
Not only do geopolitical tensions and rising inflation account for the surge, but so does Barrick Gold topping Wall Street estimates when it recently reported fourth-quarter earnings, Skousen wrote to his subscribers. The company managed to do that even though its costs were at the higher end of its guidance and capital spending increased.
In fact, Barrick Gold ended 2021 net cash positive, despite paying a record $1.4 billion in dividends to its shareholders. The company also buoyed the value of its stock price by announcing a share buyback program.
Stock Buyback Program Enhances Value of Barrick Gold Shares
Stock buyback programs are a plus for shareholders. When earnings are divided by fewer shares of stock through repurchase arrangements of companies like Barrick Gold, the earnings per share (EPS) climb. EPS is the “primary driver” of stock prices, said Skousen, who also heads the Forecasts & Strategies investment newsletter.
“Of course, higher inflation and escalating tensions between Russia and Ukraine have also boosted gold prices to their highest levels since June,” Skousen said. “Gold is up in 12 of the last 15 sessions, and it appears poised for a further breakout.”
Jim Woods, who has a track record for picking profitable stocks, funds and options, wrote to his Intelligence Report newsletter readers that Russia’s threats and aggression against Ukraine are key reasons why stocks have been under pressure lately. Investors must navigate how to protect their money when Putin seems intent to go to war.
Woods, who also heads the Successful Investing newsletter, as well as the Bullseye Stock Trader and High Velocity Options advisory services, said stocks dropped on Thursday, Feb. 17, when Russia’s leaders accused Ukraine of shelling Russian-supporting separatists in the Ukrainian territory of Donbas, specifically in the Donetsk and Luhansk regions. Those areas of Ukraine are coveted by Putin-led Russia, which is invading its neighbor to seize control of land militarily.
It is reminiscent of 2014, when Russia invaded Ukraine to annex Crimea, a region that, like Donbas, was populated by many Russians. In a return to the old Soviet playbook, Russia is making new unsubstantiated claims to wage a propaganda campaign against Ukraine.
With Russian leaders apparently lying about Ukrainians shelling Russian separatists without provocation, certain analysts predicted that Russian leaders were seeking to dupe the rest of the world to rationalize invading Donbas and annexing the territory, similar to what happened in Crimea in 2014. As occurred in the 2014 invasion and takeover of Crimea, an attack against the Donbas region by Putin-empowered forces would result in significant international sanctions against Russia.
Any near-term gain may be followed by other nations in the region solidifying their budding relationships with the North American Treaty Organization (NATO) to defend their territory against future potential invasions by Russian or surrogate forces that Putin may direct. While the Russia-Ukraine conflict may not ultimately be a bearish gamechanger, it did pull down the S&P 500 Index about 2% in just one week.
VanEck Gold Miners ETF (GDX)
Gold has been glittering in the last week or so as investors move into the safety of what traditionally is the greatest store of value in the market, Woods said. Given the trend higher in gold so far this year, Woods is recommending VanEck Gold Miners ETF (GDX) in the Tactical Trends Portfolio (TTP) of his Intelligence Report newsletter.
GDX holds the biggest and arguably best gold and precious metals mining stocks. The fund has been breaking out to new highs.
The six precious metals investments to purchase for profiting from Putin’s power play offer investors a chance to produce positive returns even when the market overall is trading down or sideways. With inflation and the Russia-Ukraine conflict showing no signs of easing soon, the trend should remain a friend for precious metals investors.