I've never been a fan of share price charts. They are only past indicators. If any guide, they show share price behaviour under certain macro settings.
Other statistical indicators like the inflation rate, are lagging indicators which may impact the price of a commodity and in turn a Company's share price performance.
Ongoing fundamentals at a macro, sector and micro level are the leading indicators best observed, IMHO.
Under the previous administration the USA became energy independent. It then produced some 13 million b/d. That has fallen to 11 million b/d under the current administration which is hellbent on reducing its fossil fuel consumption. Similarly, climate change hysteria has impeded fossil fuel production worldwide.
Now we are seeing the resultant energy crisis developing in the USA and indeed elsewhere. So what happened to the POG the last time the world experienced an energy crisis?
Its difficult being a Gold investor because its basically a fear index. However, now seeing democracy being humiliated by the politicking of career politicians, who care not for economic fundamentalism but only about their chances of re-election, its easy to be fearful.
Trump was elected because Americans were sick of career politicians trashing their economy. He formed the USAMCa trading bloc to make them energy, technology, resources and food independent.
Biden, Pelosi, Harris, Ocasio-Cortez are now in charge of the most powerful nation in the world? Now we see the previous administrations good work unwoven, beginning with an energy crisis.
The US$ crisis will be next.
A lot of commentators in recent months, mentioned the large number of short positions in Gold around the low to mid US$1,830s. Similarly with the GDX around US$33.50. They all got smoked with the release of Oct21 US inflation data.
There are many graphs relating the POG to other valuation metrics, which have all underlined that the POG has underperformed. Many measure the price of commodities in terms of the energy costs to produce them. Some have said the POG was suppressed so not to embarrass fiat currencies.
With the recent FOMC meeting stating that their liquidity support would be flexible, the US Fed were declaring they would take necessary to steps to control interests rates on their US$29t in debt. Foreign investors have been dumping US Treasuries and replaced by the US Fed.
This has all the hallmarks of a big spike in the POG. It will also likely fuel the last (and most prolific) stage in the equity market bull run.
The GFC was never resolved, just deferred and inflated. The splat will be BIG when it happens ... but life will go on.
The RRL BOD have been straight up with shareholders and taken medicine recently. Disappointing grades at Duketon due to temporary lower grade intercepts. Also COVID related issues and increasing WA mining costs, both material and labour. BDC saw their DFS costs balloon 31% from just earlier this year!
However they also signalled impending positive results regarding the Garden Wall resource, as Dizzy mentioned. They also affirmed Tropicana production and maintained F22 production guidance. The recent Newcrest purchase of Pretium more than validating the Tropicana purchase price.
There appears to be good news on the horizon at a micro level and other news that negative market sentiment has ignored.
At a sector level, the POG looks a good chance of increasing markedly.
At a macro level, Pelosi, Biden, Harris and Ocasio-Cortez are dictating US economic policy. Be afraid, be very afraid ... that's good for the POG. The US$ gravitates towards losing its reserve currency status. When that happens, the POG will skyrocket, IMHO. The leading indicator of this was the military co-operation agreement drawn up between Saudi Arabia and Russia two months ago. The Petrodollar is no more.
https://www.youtube.com/watch?v=YID_Qt6FV6g
RRL may have been one of the worst performing stocks in CY21 but its looking like it could be one of the best performers in CY22.
AIMHO, of course.
Expand
(20min delay)