It’s a strange world. FTSE100 stock prices are near all-time highs. Yet the British economy is slowing, inflation is rising and most economists expect tax increases in the November budget.

Some of this apparent contradiction can be explained by the international concentration of Britain’s largest listed companies. It is estimated that around 80% of their revenue comes from abroad, which means they are less dependent on the domestic economy. However, the OECD believes that GDP growth in many Western countries is likely to ponderous over the next year.

This warning from the Bank of England is also worrying “Stock market valuations seem stretched.”especially in the artificial intelligence (AI) sector. He warns that there are similarities to the dotcom bubble. And we know how it ended! This even had an impact on the FTSE 100 index, which is characterized by a lack of technology companies. At the end of 1999, the rate was 6,930. By March 2003, it had dropped below 4,000.

Safe haven?

One of the available options is to consider purchasing shares in non-technology companies, e.g Fresnillo (LSE:FRES), the world’s largest silver miner and major gold producer. It operates eight mines in Mexico and owns other exploration projects. Importantly, the level of its resources (“quantitative, measured, indicated and inferred“gold and silver) have remained broadly stable since the end of 2020.

Mining is probably the most hard industry to operate properly from an operational point of view. Production may be interrupted for a variety of reasons, including accidents, hefty rainfall and unexpected industrial action. It is also hard to determine – with any accuracy – how much revenue will be generated from mining the mine because spot prices are set in global markets.

However, the current economic uncertainty is driving up precious metal prices. Silver just set a fresh all-time record. The value of gold exceeds $4,000 for the first time in history. Both rates started rising during the pandemic and have continued to rise since then.

Understandably, this improves Fresnillo’s financial performance and market capitalization. Its shares are currently changing hands for 79% more than in October 2020.

What’s next?

However, gold and silver prices can be volatile. And they weren’t always so high. Ten years ago it was about a quarter of what it is today. At the time, Fresnillo’s share price was about 70% lower.

Some economists predict that prices – especially gold – will continue to rise. Increased central bank demand is seen as one of the key factors.

However, even if metal prices don’t rise much further, I think it’s unlikely they’ll see a piercing decline anytime soon. On this basis, Fresnillo stock can be considered a potential hedge against the turbulent times we live in.

History tells us that a market correction will come, but no one knows when. With this in mind, I will continue to look for undervalued FTSE 100 shares regardless of what happens in the world. There is no point in trying to monitor the market over time. It seems to me that the most successful investors take positions in high-quality companies and hold them for the long term. That’s what I’m going to do.