I find gold stocks reaction to the POG very odd at times and the...

I find gold stocks reaction to the POG very odd at times and the last few weeks is no exception. Australian gold stocks have fallen quite a bit since beginning of 2024 and more so for SPR.

Australian gold mines have costs in $A and revenue in $A ie profits are in $A.

On 29 December SPR closed at 52c and on that day the POG was about $A3,023 and $US2,063. Today the POG is $A3,068 and $US2,013 a change of a $A45 (ie 1.5%) increase and a fall of $US50 or 2.4%.

- these are relatively small movements yet Australian gold stocks have fallen by many multiples of the $US fall (in SPR case it has fallen 9 times this fall)
- Australian gold stocks should have increased not fallen during this period as their realised revenue will have increased. In addition the only day since 29 December that the $A POG fell below the 29 December level was when it fell by $A3 to $3,020 (see charts below) which is a rounding amount of 0.1%. That is since 29 December the $APOG has been above the 29 December level except for 1 day by a very small amount. Yet SPR fell by 22%.and most gold stocks have fallen a lot.

I find the market for Australian gold stocks irrational at times. Don’t gold stock investors look at the $A gold price? I think not just like the majority of investors in mining stocks only look at the announcement headlines that a company wants them to see rather than what is in a lot of cases poor results once they look at the detail buried in the announcement.

All this has a silver lining as such an irrational market often provides great trading or buying or selling opportunities for gold stocks. Now seems to be a good time to buy Australian gold stocks especially SPR which has fallen a lot more than other gold stocks (except EVN) (but the buying may get even better).