Good Morning!

Before you scroll down, here are some notes from TheDailyGold Premium.....

In TDG #912, published on Sunday, we introduced a secondary watch list of 6 companies.

These included: 

1) a large gold producer with almost 100% production growth potential from 2023 to 2027 

2) an exploration company with a world class asset that could become a very good buy if it declines to strong technical support 

3) an exploration company that has made impressive discoveries in a joint venture with a major miner, won't need to raise capital and is trading well off its highs.

Furthermore, we provided a full update on our Top 10 Table in TDG #909 and a full update on our Top 10 Watch List in TDG #910.

As a subscriber you can become informed very quickly on over 20 companies.

I Have Been Writing About This Since 2015

Gold must outperform the stock market to be in a secular bull market.

A few years ago, I modified the concept to include Bonds. Gold must outperform the conventional 60/40 investment portfolio (60% Stocks, 40% Bonds) to be in a secular bull market.

The 1960s is the only outlier to this concept, as gold mining stocks, the proxy for Gold, broke out of a 28-year base in 1964 and advanced 300% to a peak in 1968. 

Gold’s breakout of a 13-year cup and handle pattern in March 2024 is the best historical comparison.

The difference is that Gold has yet to outperform the stock market as gold stocks did in the mid to late 1960s. 

Gold vs. 60/40 Portfolio Total Return

It is baffling that Gold broke out of a 13-year cup-and-handle pattern and advanced from $2100 to $2800 yet did not outperform the stock market.

This further highlights the need for a bear market in stocks and for Gold to break out against the 60/40 Portfolio.

In the chart below, we highlight the secular bear markets in stocks (yellow), note the S&P 500 losing its 40-month moving average (red line), and the confirmation signal from Gold against the 60/40 portfolio (blue line). 

Conclusion

Also, note how Gold’s breakouts against the 60/40 portfolio occurred when or around the time precious metals diverged from bear markets in equities. Thus, the coming signal will likely happen when precious metals diverge from a bear market in equities.

Until then, Gold and Silver remain in uptrends but it does not feel like a bull market.

New capital is not coming into the sector. This keeps valuations low and hurts, in relative terms, leveraged plays. 

Gold stocks and juniors are a leveraged play. Silver is a leveraged play. 

When Gold begins to outperform the 60/40 portfolio and stock market in earnest, Gold, Silver, and other leveraged plays will soar as fresh capital moves into the sector. 

We aim to find the companies that are undervalued now and have significant potential to add more value in the future. And that can be turbo-charged by a real bull market in the sector.  

I am scouring the junior universe to find future Top 10 Companies and other companies that are undervalued with 5x to 10x potential. 

Thank you for reading.

I wish you all the best in 2024 and beyond.