All gold miners, large and small will be tested this week with the Chinese sell off last Friday weighing down US and European markets and the POG.
No one should be shocked by a downward breach of the $10 price level for a week, a month or a quarter.
Sustained upward movements in real interest rates based on resilient economic growth continues to add downward price pressure and short term uncertainty to the POG.
Depending on one's local currency (ex US) gold prices and production profitability are quite strong, as is the case for Aussie miners. Sentiment however, seems to rest on the US dollar price.
l have no greater visibility of the future POG or the price of gold stocks. All l can rely on is my own assessment of less low hanging fruit, increasing production costs, a conglomerate set macro factors and relatively high cash flow, low debt and lean G & A spend that make both physical and equity based holdings particularly attractively priced.
True believers have seen all this before, and l expect have pretty big smiles on their faces from the large price gains over the last 3 to 4 years. For others, the drawdowns over the last 18 months will have been very painful to carry. That is the nature of the commodity cycles.
l know l will be adding to all my positions over the next 6 months. Whether that is smart or foolish will only become clear in 2025 or even 2026.
As a very long term holder of NST, NCM and a string if juniors, waiting 2,3 or 4 years before seeing gains has become almost second nature.
l strongly feel all markets will sell off in 2024, and in the rush to liquidate, all miners will go down with them. That is just an unavoidable risk l choose to take, in order to be totally positioned for the subsequent bull run l expect to follow as the FED again embarks on QE, eventually pivots and real interest rates decline and money printing goes into overdrive. That thesis drives my financial decisions.
Each person must assess their own position and act accordingly. My post reflects my own thoughts and my own circumstances, after over 4 decades of reasonably successful investing.
lf my thesis is wrong, l have no debt and will be happy to hold physical insurance and highly profitable equities.
lf it is right, my heirs may think a little more of me when l am gone, than they do at present.
l look forward to accumulating more NST applying my measured and tactical techniques.
l wish all investors well over the short term, expecting some challenges. Should they come l would encourage all who can, to stay fat on the sector and add on weakness if you can.
Exciting times should reward patient investors.
GLTASH
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