MILLBROOK, NY – August 23, 2022
U.S. consumer spending remained steady in July 2022. Excluding gasoline and auto sales, spending rose 0.7% compared to June 2022. Including gas and auto sales, spending was flat month-to-month. Inflation may be showing signs of easing in the United States. For example, gasoline prices fell in July 2022 and beef prices fell 0.7% for the four-week period ending August 7th. Around the globe however, some prices are not falling, but skyrocketing. In Europe, for instance, gas and power prices have surged amid panic over the potential lack of Russian energy supply for the coming winter. Germany especially, due to its heavy reliance on Russian gas, has experienced a soar in power prices with the German year-ahead power benchmark rising to a record level of above 700 euros a wegawatt-hour. This price is seven times higher than a year ago at this time. German Central Bank Chief Joachim Nagel warned that if the energy crisis worsens, a recession is likely next winter and German inflation could peak at 10% in Autumn. French President Emmanuel Macron has warned of difficulties ahead saying the people must “accept paying the price for our freedom and our values.” In the United States, warning signs of a potential spike in power prices are beginning to appear as well. The U.S. Energy Administration reported that an unseasonably meager injection into storage facilities resulted in a 12.7% deficit to normal inventory levels at this time of year.
Midas Fund The Fund’s holding of Northern Star Resources Ltd., an Australian gold mining company with operations in Western Australia and Alaska, performed well in the past month. Shares of Newmont Corporation, an American gold mining company with one of the largest gold reserve bases in the industry, underperformed in the past month.
The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income through investments primarily in precious metals mining and other natural resource companies, as well as gold, silver, and platinum bullion. The Fund currently is invested in a global portfolio of primarily large and medium gold and diversified mining companies, precious metals royalty companies, and ETFs holding gold and silver bullion.
Midas Magic The Fund’s position of Williams-Sonoma, Inc., an American consumer retail company that sells kitchenware and home furnishings, performed well in the past month. The Fund’s holdings of Medifast Inc., a nutrition and weight loss company, hindered the Fund’s performance in the past month. Each of Mastercard Inc. Class A and Alphabet Inc. Class A currently comprise more than 10% of the Fund’s net assets.
The Fund seeks capital appreciation. Relative to the S&P 500, the Fund’s portfolio currently is more weighted in economically sensitive sectors, such as communications, and cyclical sectors, financial services, and is underweight in defensive industries, such as utilities.
How to Invest in Gold?
Three alternatives investors often consider when seeking the advantages of gold are gold bullion, stocks of gold mining companies, and funds that invest in gold and gold-related securities, such as Midas Fund. Using a disciplined approach, Midas Fund seeks to emphasize gold and other natural resource companies offering financial strength, expanding production profiles, strong free cash flow, and promising exploration potential. The Fund’s portfolio is focused on what we believe to be some of the best companies in the sector and so we view Midas Fund as currently well positioned to seek capital appreciation and protection against inflation.