Tuesday, September 3, 2024

Good Morning!

I have written and talked about why there is too much fear over the 2008 Boogeyman and why it is not a worry.

Here is the clearest and most concise explanation.

Gold and gold stocks diverged from and performed well during the bear markets of 1973-1974 and 2000-2002.

Those bear markets transpired around the start of new secular bull markets in precious metals, as evidenced by Gold outperforming the 60/40 portfolio and giving confirmation signals in 1972 and 2002.

As a secular bull in Gold and precious metals begins, there is a great underinvestment in the sector. There are few sellers. But there are tons of potential sellers in regular stocks.

If there is a recession and bear market over the months or quarters ahead, capital will move out of stocks and into precious metals.

Fundamentally, it makes perfect sense because that means rate cuts and the new President will be able to increase spending.

As an aside, the big declines in Gold (1975-1976 & 2008) did not occur until at least halfway into the secular bull market and after Gold gained 6x and 4x. 

In TheDailyGold Premium...

TDG #898 was a lighter update.

We answered a Q&A on a top exploration company, that based on one analyst calculation, could cash flow $1 Billion/yr over the first 5 years of production (at current real Gold price). 

I am not as keen on this particular explorer but mentioned if it gets cheaper it could become a Top 10 Company. 

One of our top holdings has corrected 25%. This is a very high quality company that, if margins expand another 25%, would have visibility to potentially $1 Billion/yr in cash flow in 3.5 years. 

We posited that there is risk Gold & Silver could trade lower over the next few weeks. 

The technical setup remains very bullish in GDX & GDXJ and they have held up better than the metals over the last three trading days. But if metals trade lower, they probably trade lower too.

Here is a chart of the inflation-adjusted Gold price.

It just made its 3rd highest monthly close ever and highest close in 43 years! 

Do you want to invest in the best quality juniors with the most upside potential in a bull market? 

These companies are still trading at good values but I suspect those values will fade quickly as share prices move higher over the coming months. 

Thank you for reading.

I wish you all the best in 2024 and beyond.