GoldNuggets — ATH, Miners, vs Assets
GoldNuggets Digest: ATH clustering in secular bulls, central bank buying, miners cash flow, mining stock prices in perspective, gold vs other asset class total returns...
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ATH Clustering
First up this week is a look at historical All-Time-Highs (ATH) in the gold price — as Warren Pies of 3Fourteen Research reminds us: “Gold can go decades without an all-time high. But, in secular bull markets, ATHs cluster together. These moves always go higher than you would guess and are incredibly persistent.“ [source]
Central Bank Buying
On what has been a major gold price tailwind, Krishan Gopaul of the World Gold Council remarks: “Central banks added 1,045t to global gold reserves in 2024, the third consecutive year that demand topped 1,000t. This continued strength of demand exceeded even our already-lofty expectations.“ [source]
Gold Miner Cash Flow
Tavi Costa of Crescat Capital muses on miners’ lackluster performance despite recording a 13-year high in cash flow: “This trend in the mining sector bears a resemblance to what happened in the energy industry—where skepticism persisted for years, with many investors losing faith in its profitability. Of course, that was precisely the wrong time to hold such a view, as energy companies went on to become highly profitable and efficient. A similar transformation now appears to be unfolding in the mining sector.“ [source]
Gold Miners in Perspective
Charlie Morris of ByteTree also observes that Gold Miners “have been making slow progress since the 2015 low. Some say valuations are much too low, while others feel they are terrible companies, but whatever your views, conditions are ripe. I am most focused on the fact that most investors ignore them despite the elephant in the room, which is the gold super bull market.“ [source]
Gold vs Cash/Bonds/Stocks
This chart basically combines 3 charts from page 8 of the Gold Market Chartbook — it occurred to me that there looked to be a leading/lagging effect in the performance of gold vs cash, bonds, and stocks.
Gold first turned up vs cash, and then vs bonds, and then now it leaves the open question: (when) will gold turn up vs stocks? And if you ask me it’s probably just a matter of time as multiple risk-flags are waving on the stockmarket, which is late in the cycle and overvalued vs gold going from strength to strength in the early stages of a new secular bull market. (comments from Callum Thomas, Head of Research at Topdown Charts)
n.b. the chart shows gold vs total returns (i.e. including interest/dividends reinvested), and is presented in log terms.
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ICYMI: Previous edition GoldNuggets — Breakouts & Mute Media
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