All gold stocks should be trading much higher. Everyone is...

All gold stocks should be trading much higher. 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 them. As the saying goes a rising tide floats all boats.

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.