Looking at the sentiment and headlines over the past 10 days, you would have thought there was a global war against gold – instead of an overdue correction that brought gold’s price back down to the low, low price of $4,000/oz.
The context is kind of funny… just over a month ago it was unclear if gold would be able to get over the $4,000 mark:
Two months ago, gold was at $3,400 when I made the bold prediction that we might see $4,000 gold by the end of 2025.
And yet, all it took was a return to $4k gold two short weeks after hitting that mark for the first time ever, and the bears are out of the woodwork calling for the end of the bull market.
The truth: $4k gold is a major boon for even some of the least economic gold mines out there. No one even builds a mine unless they can get costs down below $2k/oz. That’s because mines take years to build, and no one will loan you a penny to build a mine unless there’s a massive margin of safety.
The large cap miner right now with the highest all in sustaining costs of just over $2k/oz is Equinox Gold.
At $4k/oz gold, Equinox is doing fine. They can pay their bills and mine as much gold as they want and not go broke.
The market can see exactly how much profit Equinox is going to generate in the coming calendar year based on $2,500 gold on up through $4,000 gold.
As a gold stock analyst, a company like Equinox just isn’t very interesting. I know that even if gold goes to $10,000, Equinox isn’t likely to move much just because their all in costs will rise along with gold.
The real value is in pre-production miners that are basically invisible to 99% of the investing world. By invisible, I mean the screening tools, AI trading algorithms and sometimes even their investment charters make pre-revenue, pre-production miners not even show up as a blip on the radar. They’re just not on the map, at all.
And people who suddenly turn bearish during a correction that takes gold back to $4,000 gold have no idea these companies even exist – let alone what’s going to happen when the market discovers them on first production.
Buying ordinary, large cap gold miners can sometimes pan out, if you manage to get lucky and buy them at a low and sell them right at the top.
But right now with this gold correction unwinding, my favorite gold stocks are selling at incredible values to my fair value estimates.
This is one of the good times to be a bargain hunter. Don’t waste it.
On that note, I’m still super excited about my latest investment brief that I released last week on my #1 favorite gold stock to own right now. With the gold correction, the story is even better.
It’s exactly the kind of “off the radar” company I just mentioned. When it goes revenue positive early next year, it will be way too late to buy shares anything close to today’s price.
Don’t wait:
Click here to see what I mean.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio