Gold Stocks…EXPLODE – Fat Tail Daily

Kaboom! That’s the only way to describe the gold sector over the last few weeks. There’s been a rip like I haven’t seen for a long time.

Look at these examples to see what I mean…

Here’s Westgold [ASX:WGX]:

Source: Market Index

Here’s Regis Resources [ASX:RRL]…

Source: Market Index

And Black Cat Syndicate [ASX:BC8]…

Source: Market Index

This is just three examples.

That Regis Resources move is a stonker. It’s even more amazing considering the stock has been a dog for about three years beforehand.

It had the fundamentals, but it just couldn’t fire…until the last week or so.

Just look how fast things can change in the stock market.

In one sense, it’s a mystery that certain gold stocks have taken this long to really fire up. The lead from the physical gold price has been there all year.

Something — even now I’m not sure what — was holding back the equities.

They’ve broken loose now and some subscribers across Fat Tail’s services are reaping the benefit.

Both my small cap services are exposed to some of these moves. Murray Dawes does too in both his Retirement Trader and Microcap services.

But ultimate credit needs to go to our gold specialist Brian Chu.

He’s been steadfast in his belief that a gold bull market was brewing and long prepared his subscribers for what’s happening now.

It’s a patient and demanding game to stalk prey like this. The market never makes it easy.

Here’s a snippet of what Brian told his subscribers last month…

‘We’ll have a first-mover advantage.

‘As the gold-oil ratio trend continues to increase, it should drive higher operating margins for gold producers.

‘When the September quarter results are released next month, operating margins could continue to surprise on the upside. That may trigger more buying from general investors and fund managers.

‘That’s why now is a good opportunity to accumulate while gold producers are bumping against their resistance levels.’

Gold stocks, as a sector, have gone nearly straight up since this went out…and all based on real, rock-solid fundamentals.

Gold producer margins are at a record high. The gold price is at a record high. Oil and inflation are weakening. Labour supply is coming back.

In other words, all the ingredients for a monster gold rally are coming together.

You might, at this point — especially looking at those charts — assume you’ve missed the boat if you’re not in already.

Rest assured, there’s every reason to think the gold bull market should run for years yet.

Granted, the stocks can’t keep going vertical. The shares will retrace at some point. These are volatile stocks after all…

However, the outlook for gold remains robust, and there are still many ways this could lead to exciting opportunities.

For example, certain producers are skyrocketing now. But there are still many explorers and early developers who are not.

It’s not unreasonable to expect a wave of mergers and acquisitions as big producers use their gushing cashflows now to buy up future reserves.

This is where you need a man like Brian in your corner. He knows which projects are worth backing…and which are not.

There are hundreds of gold projects across Australia. But you only have so much capital to devote to the space.

Brian’s timing is impeccable currently. He’s just put the finishing touches on a presentation of his preferred gold stocks as the market begins to rumble.

It’s free to attend, and you can register here. Don’t waste too much time though, as the event takes place tomorrow.

I couldn’t think of a better time to be kicking over some of the best juniors on the ASX.

I’m excited for what’s coming. You should be too.

Best,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Callum Newman is a real student of the markets. He’s been studying, writing about, and investing for more than 15 years. Between 2014 and 2016, he was mentored by the preeminent economist and author Phillip J Anderson. In 2015, he created The Newman Show Podcast, tapping into his network of contacts, including investing legend Jim Rogers, plus best-selling authors Jim Rickards, George Friedman, and Richard Maybury. He also launched Money Morning Trader, the popular service profiling the hottest stocks on the ASX each trading day.

Today, he helms the ultra-fast-paced stock trading service Small-Cap Systems and small-cap advisory Australian Small-Cap Investigator.