Charts!, page-624

All gold stocks should be trading much higher not just BGL. Everyone is focused on tech, the magnificent 7 and Bitcoin but when the tide turns gold stocks will rise very significantly. Gold stocks were seen to be very undervalued last year but now seem even more undervalued than 6 months ago (see my analysis below). Once the increased profits start flowing through in the next 6-12 months from announced results due to the higher POG, we will likely see major increases in share prices of gold stocks which could be anywhere from 50% to 100% higher especially if POG keeps increasing. Now is the time to be buying gold stocks not selling the.

The World Gold Council reported that ASIC for gold producers for September quarter 2023 was a little over $US1,250 when the POG was about $1,850 at beginning of October 2023 - ie ASIC is about 2/3 the POG. Gold miners have additional costs so that ratio is more likely to 3 to 4.

The POG has risen to $US2,300 as I write this or an increase of 25% or about $US450. Using the figures in the previous paragraph will result in gold miner’s profits increasing by at least 3 times and more likely 4 times the % increase in the POG ie their profits will be 75% to 100% greater all other things remaining unchanged (ignoring tax).

Gold mining ETFs, GDX and GDXJ have increased by 28% and 33% in the last 6 months but these 2 ETFs should have seen an increase of at least 75% maybe even 100% if they had tracked the increase in gold miner’s profit impact. Whilst my analysis is rough and excludes tax it is so obvious that gold miners which were very undervalued 6 months ago are now even significantly better value assuming the POG does not fall and maybe keeps rising.