Good Morning!

Earlier this year Gold made its biggest breakout in 50 years. The Gold price has moved from below $2100 to as high as $2700.

But miners and juniors have not performed as well as most hoped.

The reason to borrow a phrase from Gary Tanashian, is they are not unique. 

The secular bull market in US stocks remains in effect and this limits the pool of capital that invests in precious metals.

When the market cracks, precious metals become unique and a much larger pool of capital spills into the sector. This ultimately "spills over" into the miners and the juniors.

That being said, there are companies that are outperforming the sector and moving in tandem with this fledgling bull market.

The trick is to look for quality and value. Quality assets and projects and value based on current metals prices.

Gold Stocks vs. Stock Market

Here we plot GDX against the S&P 500 and GDXJ against the S&P 500.

Both ratios are holding above rising 200-day moving averages but recent action suggests a failed breakout.

The ratios are not in a negative position but they have struggled to gain momentum to the upside.

GDX & GDXJ

Gold and Silver formed ugly candles on Tuesday.

But GDX and GDXJ formed bullish hammers at the 50-day moving average. 

One day does not mark a reversal, but its worth watching.

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TDG #903 included an updated company report on one of our Top 10 Stocks and a decent sized position. 

We are up 80% from our first buy but as per our calculation, the company is valued at 0.16x NPV at current metals prices.

Its a silver stock and one that sometimes gets lost in the shuffle. I think it is one of the absolute best risk/reward plays right now. 

It does not need $50 Silver but if it gets it next year, the stock could 5x from here. I love finding stocks like this. There is real quality and value, and still huge leverage from here.

Thank you for reading.

I wish you all the best in 2024 and beyond.