The actions of Wheaton Precious Metals (NYSE: WPM) have lost 22% of their value since mid-April, with the price of gold falling from $2,000 an ounce in March to $1,800 currently. While other commodities, including copper and iron, fell on fears of lower demand due to China’s zero-tolerance policy on the pandemic, a strong US dollar led to a drop in gold futures. The Russian-Ukrainian war is causing major changes in the geopolitical strategies of many countries, leading to new trade relations and energy security pacts. Thus, Trefis believes that the growing uncertainties surrounding this change are likely to propel gold prices until global macroeconomic stability is achieved. Trefis highlights historic trends Wheaton Precious Metals revenue across key operating segments in an interactive dashboard analysis.

Will the demand for precious metals grow in 2022 and 2023?

In 2021, Wheaton reported sales of 663.4 thousand gold equivalent ounces at an average price of $1,811/ounce. The uncertainty surrounding the macroeconomic recovery, coupled with high benchmark oil prices, has led to a surge in commodity prices, which has helped Wheaton profit from earnings and earnings in recent quarters. After seeing a high of $2,200/oz in 2020, the precious metal has seen a correction in recent months as the US Dollar strengthened. As a result, the company reported a 5% revenue contraction (year-on-year) and a 9% decline in operating cash flow. By annual deposit, gold, silver, palladium and cobalt sales account for 47%, 48%, 4% and 1% of total revenue, respectively. According to the World Bank Commodity Market Outlook, gold prices are expected to decline from $1,880/oz in 2022 to $1,650/oz in 2023. Similarly, silver prices are expected to decline by $24.20/ounce in 2021 to $21/ounce in 2023.

The stock moved in line with the broader markets

WPM stock fell from levels of around $33 in February 2020 (pre-crisis peak) to levels of around $24 in March 2020 (as markets bottomed), implying that WPM’s stock is down just 27% from its rough pre-crisis peak. It saw a strong rally after the broader market selloff and reached $40 at present. By comparison, the S&P 500 index has also gained 20% in value from pre-pandemic levels. (Related: Has ArcelorMittal stock lost its luster?)

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