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Gold about to hit next leg of bull market and stocks are cheap, expert says

After 12 months of price consolidation, we are entering a new stage of a gold bull market which Barry Dawes … Read More
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August 20, 2021

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The gold price itself had 12 months of consolidation. Now we are entering a new stage of a bull market which Barry Dawes of Martin Place Securities believes “will take it much, much higher”.

In the big scheme of things, the pullback we have seen over the past 12 months is ‘small beer’, Dawes told the Virtual Gold Conference earlier this week.

“Now everything is aligned up for gold prices in the decade to be very strong,” he says.

“The short and medium term looks very good; the long term looks very good.”

Punters should look to the big gold stocks in the US – they are the ones that matter, Dawes says.

“They are the stocks that we need to follow, because when there is movement in the Philadelphia Gold Index, we know that the big money is flowing into the sector,” he says.

The Philadelphia Gold and Silver Index, which includes 30 mega cap precious metal mining companies, is one of the most watched gold indices in the market.

Philadelphia Gold and Silver Index over the past 30 years.

“We are seeing [sentiment] turn now – when we look at individual stocks, when we look at the Philadelphia Gold Index — it certainly seems to me that things are [moving in the right direction],” Dawes says.

“All these different indicators are telling us that gold stocks are under-owned; gold is under-owned,” he says.

“Now there are a lot of cyclical and secular features coming together at one time. The market response should be very, very strong when things turn.”

Rick Rule, well-known gold bug and president & CEO of Sprott US Holdings, also believes a recovery in the gold price – and the value of gold stocks — is imminent.

“I think gold and precious metals equities are already in recovery. I believe the cyclical decline is over, and we will soon resume a secular bull market.”