Giddiness in Gold

This is when gold producers should be locking in their selling prices.

Perhaps to offer their equity as currency to acquire non-profitable mines.

Some companies may even ‘trick’ investors (and reward bankers) by raising capital at this moment.

Gold prices are resembling parabolas,

and the study below can’t convince me towards the probabilities of buying Gold ‘with new money’ today or tomorrow.

While animal spirits are absent and prices can become giddy, mean reversion should be respected.

But not all the equity prices of gold producers are hitting all-time highs.

Why?

Because profitable mining projects remain difficult.

p.s. for some perspective, Gold (as priced in USD) has risen 14% over the past 3 months (I just chose an arbitrary starting point)……many things have had similar returns including the S&P 500 and the price of Lean Hogs.

October 23, 2024

by Rob Zdravevski

Karri Asset Advisors