Wheaton Precious Metals: Potential Beneficiary Of A Fed Pivot

Macrotips Trading profile picture
Macrotips Trading


  • Wheaton Precious Metals is one of the largest royalty and streaming companies in the world.
  • The royalty and streaming business model is relatively insulated from soaring inflation.
  • Gold prices have suffered YTD on rises in real interest rate. A "Fed Pivot" could act as a catalyst to boost gold producers like Wheaton Precious Metals.

Silver, gold and oil


A few months ago, I initiated coverage of Wheaton Precious Metals Corp. (NYSE:WPM) with a bullish article. I liked WPM's high quality asset base and defensive business characteristics, as royalty and streamers are relatively protected from the

WPM production costs

Figure 1 - WPM has predictable and low production costs (WPM Investor Presentation)

WPM outperforms

Figure 2 - WPM outperforms peers and underlying commodities (WPM Investor Presentation)

WPM has outperformed

Figure 3 - WPM has outperformed peers and underlying commodities (Seeking Alpha)

Rate hike expectation

Figure 4 - Rate hike expectation for November FOMC (CME Group)

Current rate hike cycle the fastest in history

Figure 5 - Current rate hike cycle has been the fastest in history (Visual Capitalist)

Recession Probabiilty

Figure 6 - Recession probability (Conference Board)

Inflation breakeven rates

Figure 7 - Inflation breakeven rates (St. Louis Fed)

Gold prices negative correlated to real rates

Figure 8 - Gold prices negatively correlated to real rates (longtermtrends.net)

Gold negatively correlated to US dollar

Figure 9 - Gold and US dollar negatively correlated (macrotrends.net)

silver seasonality

Figure 10 - Silver seasonality (equityclock.com)

WPM peer valuations

Figure 11 - WPM peer valuations (Seeking Alpha)

WPM technicals remain supportive

Figure 11 - WPM technicals remain supportive (Author created with price chart from stockcharts.com)

This article was written by

Macrotips Trading profile picture
I spent 5 years as a co-founder and hedge fund CIO / manager. Before that, I was a hedge fund analyst/portfolio manager at a leading Canadian alternative asset manager. I write articles as part of my own due diligence on the stocks that I find interesting, for one reason or another.Follow me on twitter for my thoughts on macro trends.

Disclosure: I/we have a beneficial long position in the shares of WPM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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