In addition to Mihail's comment, the increase in gold price was caused not buy retail buying but by central bank buying. The important difference here is that central banks do not invest in miners/explorers, unlike retail investors. If you buy an ounce, you perhaps also buy some mining stocks.
The sentiment in the West for gold is pretty bad actually and most investors are not interested/distracted.
This means producers make decent money but don't find enough investors to drive prices higher accordingly, and explorers having a hard time to find investors at all.
I agree that the rally in gold was driven by Central Banks (primarily from the East). Western institutional and retail investors were not involved. As you point out, gold sentiment in the West is at a record low.
Gold will reach a specific inflection price, let's say $3,000/oz, when all funds and retail scramble to get exposure. Such a scenario is not unthinkable in the next 24 months. Then gold majors may become the new MAG7.
In my opinion, gold miners are lagging behind the gold spot due to the overall market strength. Investors are chasing what is going up, which is a good strategy until it is not.
The tech and AI craze attracts all spare capital, so gold equities are entirely ignored—even worse than energy and mining stocks. I am bullish on gold equities because they are fundamentally strong, i.e., excellent FCF yields, low leverage, and attractive dividends. To play out my thesis needs time and another inflationary shock.
I expect the consequences of disrupted supply chains to resurface in 3Q24. This means inflation. Look at the spiral growth of container ship day rates. Expect hotter CPI prints approaching 3Q and 4Q. If that happens, it may cool the AI craze and push gold prices higher.
So, investors will look at other places to hide from inflation. Gold Equities come to mind, along with all asset-heavy businesses.
Gold miners are the real central banks. Love it. Not heard that one before.
Solid introduction. As a geologist, I have nothing to complain here. Great job!
Thanks! Your opinion as a geologist means a lot.
By the way. Do you think there is a reasonable cause, for the miners stock did not catch up with Gold Higher prices in the last few years?
In addition to Mihail's comment, the increase in gold price was caused not buy retail buying but by central bank buying. The important difference here is that central banks do not invest in miners/explorers, unlike retail investors. If you buy an ounce, you perhaps also buy some mining stocks.
The sentiment in the West for gold is pretty bad actually and most investors are not interested/distracted.
This means producers make decent money but don't find enough investors to drive prices higher accordingly, and explorers having a hard time to find investors at all.
Excellent comment. Thanks for sharing it.
I agree that the rally in gold was driven by Central Banks (primarily from the East). Western institutional and retail investors were not involved. As you point out, gold sentiment in the West is at a record low.
Gold will reach a specific inflection price, let's say $3,000/oz, when all funds and retail scramble to get exposure. Such a scenario is not unthinkable in the next 24 months. Then gold majors may become the new MAG7.
Agree, it's time accumulate now.
Thanks for your question.
In my opinion, gold miners are lagging behind the gold spot due to the overall market strength. Investors are chasing what is going up, which is a good strategy until it is not.
The tech and AI craze attracts all spare capital, so gold equities are entirely ignored—even worse than energy and mining stocks. I am bullish on gold equities because they are fundamentally strong, i.e., excellent FCF yields, low leverage, and attractive dividends. To play out my thesis needs time and another inflationary shock.
I expect the consequences of disrupted supply chains to resurface in 3Q24. This means inflation. Look at the spiral growth of container ship day rates. Expect hotter CPI prints approaching 3Q and 4Q. If that happens, it may cool the AI craze and push gold prices higher.
So, investors will look at other places to hide from inflation. Gold Equities come to mind, along with all asset-heavy businesses.
Very good! Fews get in details like you when analysing miners stock.