The Most Valuable Thing in the Gold Space
BY: NICK HODGE
No moar stimulus — at least before the election — and new lockdowns in Europe are giving the dollar newfound strength.
After skidding for most of October, which allowed gold and base metal prices to firm up, the dollar index ticked higher this week.
That has spelled trouble for both gold and stocks since they’re inversely correlated.
But gold is holding up much better than the S&P. The dollar has gone up 1% in the past ten days and gold has gone down by the same.
Meanwhile, the S&P is off by 5% in the same time as it also faces a decline in consumer confidence and another rough earnings season. Factset reported this week that “For the third quarter, the S&P 500 is reporting a blended year-over-year decline in earnings of -16.5%.”
Nine of the 11 sectors in the S&P 500 index are reporting a year-over-year decline in earnings. Health care and consumer staples were the two sectors with positive earnings.
There will be bright spots in the materials sector as well, with many gold companies reporting today. In Q4, the materials sector as whole is expected to report year-over-year earnings growth. That will drive increasing dividends as well as mergers and acquisitions.
A record 3,664 metric tons (~129 million ounces) of gold are expected to be produced next year. It has to come from somewhere.
An article this week from the BBC has gotten a lot of attention both inside and outside of the sector. It’s titled, “Why it’s getting harder to mine gold,” and points to opposition to Dalradian’s project in Ireland. And that’s a top 10 Fraser country for “investment attractiveness.”
Getting a large new mine approved in the near term might currently be the most valuable thing in the gold space. We know a few candidates.
And if you haven’t seen yet, all my and Gerardo’s premium publications are now up and running. You can check them all out here.
That includes Hodge Family Office, which specializes in getting you access to private dealflow in the mining space and beyond….
As well as Gerardo’s Junior Resource Trader that is 100% focused on the space and mirrors the personal trades he’s making using the process he’s developed during his years as a professional trader.
Call it like you see it,
Publisher, Resource Stock Digest
Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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