Good Morning!

Last week we noted the downside potential in Gold and the overbought conditions in the gold stocks.

If they are correcting here, it's quite healthy and needed.

Nevertheless, the gold and silver stocks have entered a real sweet spot. 

Today I show you the evidence and why the Sweet Spot will be in place, at least well into 2026.... 

The best way to mitigate the risk sector corrections is to buy the right companies and at reasonable prices.

To learn which juniors we like best and have 5x to 10x upside potential, subscribe to TheDailyGold Premium 👇👇👇  

1) Gold/CPI or Inflation Adjusted Gold Price Breakout

Gold/CPI has exploded out of a 45-year-long base. 

This is important because Gold/CPI is an excellent indicator for the entire gold mining sector. 

From a bird's eye view, gold miners follow Gold/CPI because it tracks miner margins so closely. CPI is a great indicator for miner costs. 

Gold is poised, being in new all-time high territory with no technical resistance, to continue to outperform CPI or production costs. 

That bodes very well for gold miners.

2) Silver/CPI or Inflation Adjusted Silver Price Breakout

The same concept works for the silver space. 

Silver/CPI has broken out of a 12-year-long base. 

SIL has also broken out of a 12-year-long base. 

Over the past 15 years, SIL (and SILJ too though not shown) has tracked Silver/CPI incredibly closely. 

When Silver breaks $42/$43 and eventually $50, the inflation-adjusted price will soar and so too will the margins of Silver producers.

3) Gold Stocks are Breaking Out vs. Gold

In recent weeks, GDX broke-out of a 2-year-long base against Gold, and GDXJ broke-out of a 3-year-long base against Gold. 

The GDX/Gold ratio could snapback a bit but has a measured upside target fairly close to 12-year-long resistance. 

The GDXJ/Gold ratio has a measured upside target to 0.27. The 12-year-long resistance is at 0.30 to 0.32. 

Miners will continue to outperform Gold as Gold/CPI remains strong.

Sponsor Companies

Equinox Gold (EQX) is a paid sponsor of this free newsletter. The company pays us a monthly fee to be featured here. 

The company, as of several weeks ago was trading at only 2x 2026 EBITDA and 2.3x 2026 cash flow at $3360 Gold. (Per RBC data). 

Calibre Mining's management, who are known as elite operators have taken control of operations and are working to ramp up the Greenstone Mine and later the Valentine Mine. 

If successful, Equinox could see a major turnaround.

Chairman Ross Beatty has bought over $1.5 Million in stock in the market in recent months.

And last week we learned that Greenstone is ramping up successfully. The stock surged higher. 

Greenstone Mine Turnaround is Happening

For more analysis of these companies and many more companies, subscribe to TheDailyGold Premium.

4) Silver Stocks Have Broken-Out vs. Silver

Here we plot SIL vs. Silver and SILJ vs. Silver. 

SIL/Silver has recently broken out of a 3-year-long base against Silver. 

SILJ/Silver has broken out of a 2-year-long base against Silver. 

Silver stocks are outperforming Silver because Silver/CPI is strong, reflecting strong margins for producers.

5) Miners are Outperforming the Stock Market

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

These ratios are consolidating the big move in early 2025 bullishly. 

They are holding most of their gains and holding well above rising 200-day moving averages. 

GDX vs. S&P 500 is consolidating bullishly around a 4.5-year high. 

GDXJ vs. S&P 500 is holding above the previous breakout past a 3-year-long base. Now it's consolidating right at 4-year-long resistance. 

SIL vs. S&P 500 recently broke-out of a 3-year-long base. It is consolidating right above that level, bullishly.

6) Gold Stocks vs. 60/40 Portfolio

GDX is very close to testing a 12-year-long base of resistance against the 60/40 Portfolio. 

GDXJ has more room to go to test its own 12-year-long base against the 60/40 Portfolio. 

Recall how important it was when Gold broke-out of a 10-year-long base against the 60/40 Portfolio in March 2025. 

When these ratios breakout, it would signal capital moving away from Stocks and Bonds into Gold Stocks.

Summary

Gold/CPI is an excellent indicator for Gold Stocks because Gold/CPI reflects producer margins. 

Gold/CPI broke-out of a 45-year-long base several months ago. This is extremely positive for gold miners. 

Meanwhile, Silver/CPI just broke-out of a 12-year-long base. Expect Silver/CPI to continue to rise as Silver has potential to make sharper nominal gains. 

Given the above, it's not surprising that gold and silver stocks have broken out against the respective metals and the stock market. These breakouts are just the start of more capital flowing into miners. 

Finally, GDX could break-out from a 12-year-long base against the 60/40 Portfolio. This would signal an acceleration in capital movement out of Stocks and Bonds and into miners.

In TheDailyGold Premium....

TDG #948 was a 21-page update.

We updated some of the notes in our Top10 Company Table and noted a new addition to the Top10, as we were carrying 9 for a while. 

The update also included subscriber Q&A on several stocks.

We also noted a company that looks to be a significant turnaround play. The stock has formed a bullish pattern and the CEO just made a 7-figure buy. It has the kind of 2 to 3 year potential we like to see. 

What are people saying about TheDailyGold Premium

right now?

Thank you for reading.

I wish you all the best in 2025 and beyond.