If gold stocks were not so undervalued as they currently are,...

If gold stocks were not so undervalued as they currently are, especially small to medium size stocks (not explorers), then SPR SP would now be up to double its current level - in other words if we are entering a significant gold bull market then many gold stocks could go up multiple times their current levels - that has happened in the past and more recently in 2022/23 in lithium stocks.

In bull markets stocks always over shoot to the upside just like in bear markets stocks over shoot to the downside. For example, stocks that are 50% undervalued could easily end up being 50% over valued (ie that is a gain of at 200% or 3 times past SP).

Gold stocks have not entered a bull market yet. That is their SP’s are still lagging the big increase in POG. For every 1% increase in POG gold producers profits go up by 2% if ASIC is 50% of the POG and by 3% if ASIC is 2/3 POG. We have not seen gold stock SP’s increase by those proportions - eg as POG has gone up by about 20% in the last 6 months and GDX and GDXJ have increased by only 17.5% and 20% - they should have increased by more like 50% demonstrating that gold stocks are very much lagging the POG. Some gold stocks would need to increase in price by 50% to 100% to be fair value based on the current POG.

If gold stocks do enter a bull market then SPR will end up multiple times its current SP over the next few years (and I mean more than a gain of 200%) - and with more great exploration results it could even end up 5 times its current price.

I and many experts (not me) have been very pleasantly surprised and puzzled to see POG increase so much in the last 6 months. If ETFs become net buyers of gold and the FED actually does cut interest rates a few times in 2024 then I won’t be surprised to see POG go to $US2,500 later this year which may put a rocket under gold stocks. The POG in the first 3 months of 2023 is closing in on the price that many experts were forecasting it may reach by the end of 2024.

But don’t believe me as the POG may even fall if Fed increases rates such is the unpredictable nature of predicting the future price of gold.