{"id":79325,"date":"2023-11-01T08:58:41","date_gmt":"2023-11-01T12:58:41","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/western-copper-and-gold-next-rise-will-come-from-gold-rating-upgrade-nysewrn\/"},"modified":"2023-11-01T08:58:53","modified_gmt":"2023-11-01T12:58:53","slug":"western-copper-and-gold-next-rise-will-come-from-gold-rating-upgrade-nysewrn","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=79325","title":{"rendered":"Western Copper and Gold: Next Rise Will Come From Gold (Rating Upgrade) (NYSE:WRN)"},"content":{"rendered":"
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This Analysis Assigns a Buy Rating to Western Copper and Gold Corporation<\/strong><\/h2>\n

This analysis upgrades the rating on Western Copper and Gold Corporation (NYSE:WRN<\/span>) (TSX:WRN:CA<\/span>) stock to a “Buy” rating from the “Hold” rating assigned in the previous analysis.<\/span><\/p>\n

In the previous analysis, the company received a \u201cHold\u201d rating because the macroeconomic and geopolitical situation did not predict a recovery in metal prices, on which the shares of this company are heavily dependent. This context was also not expected to create further difficulties for the shares, and most of the headwinds were already embedded in the share price.<\/p>\n

Because of the Different Outlook, the Stock Now Deserves a Buy Rating<\/strong><\/h2>\n

An explorer and developer of mineral projects in Canada, the company owns a mining mineral project in Yukon, Canada, for the future production of copper, molybdenum, gold, and silver.<\/p>\n

If one were to evaluate the contribution of each production to Western Copper and Gold Corporation’s future revenues as a function of current metal prices and estimated production over the entire 27-year project life, copper, gold, and molybdenum would be 42%, 29.5 %, and 26.5%, respectively of the total turnover. Silver’s contribution is actually very marginal.<\/p>\n

The heavy exposure to these metals means the stock would continue to suffer from the headwinds of \u201cHigher for Longer\u201d interest rates from the Federal Reserve (Fed), whose hawkish stance is neither an ally of copper, as the stance dampens the demand outlook for the red metal, nor gold, as the stance dampens the investment in the precious metal as this gives no return.<\/p>\n

However, higher interest rates pose the risk of a recession that could trigger a bull market for gold, and since this stock has a good relationship with the yellow metal, similar to what happened after the regional banking crisis in the United States, the stock could experience a quick and significant recovery.<\/p>\n

The Current Situation Sets the Stage for an Economic Recession<\/strong><\/h2>\n

Until the labor market gives the Fed clear signals that the U.S. core personal consumption expenditures (PCE) price index – the Fed’s preferred inflation indicator excluding food and energy – is definitely on the way back to the 2 percent target, the headwinds will continue.<\/p>\n

Labor market conditions remain tight, as initial jobless claims in the United States show near nine-month lows, and this could even lead to the need for another rate hike.<\/p>\n

High rates and core annual inflation of 3.7% in September are weighing on consumption and investment, which are showing signs of slowing. Also, experts say the economy is headed for recession, even as many continue to push the soft-landing narrative as the only possible scenario for the economic cycle.<\/p>\n

As far as consumption is concerned, last week brought the following developments that were anything but reassuring to proponents of the soft-landing thesis:<\/p>\n