Interview with Charlotte Peuron, fund manager at Crédit Mutuel Asset Management.

Photo Charlotte Peuron
Charlotte Peuron

How did this asset class perform during this banking crisis?

In the first quarter of 2023, gold and the precious metals sector helped to diversify portfolios (see World Gold Council chart below). In March 2023, gold climbed nearly 8% and gold companies 18.3% (Nyse Arca in USD). After a start to the year of profit taking, the banking crisis in the United States, which eventually quickly exported to Europe through Credit Suisse, pushed gold to its highest levels. The dollar's fall as a result of slower monetary tightening in the United States and further tightening in other regions is keeping gold high. This is illustrated by the recent correlation between the price of gold and the evolution of the ‘Atlantic spread.’

Graphique indicateurs performances or

Demand remains strong from jewelry and technology (respectively 40% and 10% of demand today) and central banks are still net buyers of gold. Investment demand is more uncertain today. However, given recent financial events, we remain optimistic for the trend ahead.

What about your recent meetings with companies producing precious metals?

This positive price trend is very positive for precious metals producers. With an average gold price of 񘖢 per ounce in Q1-2023 and production costs averaging around 遂/oz (for 2023), corporate margins will be very high. This raises valuations and explains companies' outperformance versus metal prices at the end of the quarter. This should also continue, especially for gold, which stands above 񘘆 per ounce.

Following our recent exchanges, we are confident in companies' ability to deliver good operational performances. Cost pressures are easing, although wage costs are still stretched in some countries such as Canada and the United States. Exploration drilling costs are also under pressure. This is due to the current strong demand, particularly in the exploration of other metals such as lithium... This could lead to some budget increases and increase exploration times.

The rise in energy costs has accelerated investments in alternative energies where possible, so many companies have developed solar farms for the supply of part of electricity.

We are also seeing a growing interest among gold producers in diversifying into, for example, copper.

What is the performance of CM AM Global Gold?

Since the beginning of 2023, CMAM Global Gold has returned +9.8% * (as at 31 March 2023), benefiting fully from the sector's upward momentum. We were underweight in January and February and reweighted in March to 98%. Following several meetings with management, we invested in Victoria Gold. After facing some difficulties in 2022, the company is in the recovery phase. M & A remains an important driver, so Victoria Gold could be a target in the concentration move. In return, we trimmed our position in I-80 Mining, which is slowing down. As all assets are in Nevada, development costs could be raised. In the majors we still prefer Barrick Gold versus Newmont which is in ‘discussion 'with Newcrest. Following the completion of the deal on Yamana Gold, we are also well weighted on Agnico Eagle Mines.


Drafting completed on 11 April 2023.

Past performance is not an indication of future performance and ratings.
The reference to certain securities is for information purposes only. It is not intended to promote direct investment in these instruments and does not constitute investment advice.

CM AM Global Gold is exposed to the following risks : risk of capital loss, equity market risk, risk associated with investing in small cap equities, emerging markets investment risk, credit risk, interest rate risk, counterparty risk, currency risk, risk associated with the impact of techniques such as derivatives, legal risk, operational risk liquidity risk.

Document for professionals. The information contained in this document does not constitute investment advice and is consulted under your sole responsibility. Investing in a fund may present risks, investors may not get back the amount invested. This fund is managed by Charlotte Peuron, portfolio manager at Crédit Mutuel Asset Management, a management company approved in France by the AMF under number GP 97-138, a Société Anonyme (public limited company) with share capital of euros3871680. Paris headquarters and offices: 4 rue Gaillon 75002 Paris, Strasbourg offices: 4 rue Frédéric Guillaume Raiffeisen 67000 Strasbourg, RCS Paris 388,555,021 - APE code 6630Z, intra community VAT: FR 70,388,555 021.Crédit Mutuel Asset Management is an entity of Crédit Mutuel Alliance Fédérale. The fund may not be sold, advised to buy or transferred, by any means whatsoever, to the United States of America (including its territories and possessions), nor may it directly or indirectly benefit any US Person, including any natural or legal persons, resident or established in the United States.