- Gold’s Stealth Rally Takes Flight
- Aaron Argues for Gold’s Importance in 2024
- Alex Visits a Global Mining Hub in Northern Quebec
Gold’s stealth rally to new all-time highs is finally getting some press. Easter Monday saw gold rip to another fresh high of around $2,265 per ounce. And the rally isn’t over; gold was flirting with $2,300 by Wednesday. However, gold mining companies continue to lag the metal’s performance, still down significantly from their highs of spring 2023. According to several industry pundits, the memetic power of gold (and its investment allure), has changed with the advent of Bitcoin and its relatively rapid price ascent.
Gold’s Importance is Stronger than Ever
Aaron believes that after thousands of years of use, gold’s importance in our lives, economy, and technology has only grown… Civilizations have found value in gold for millennia, and today, it is most widely used in jewelry, as an investment, and in electronics, medicine, and dentistry.
However, the most significant demand case in recent years has come from central banks buying and hoarding the precious metal. The money printers know inflation is not going away, especially as government debt, from the U.S. to Canada, balloons.
Central banks bought a record 1,082 tons of gold in 2022 and nearly eclipsed that in 2023, buying 1,037 tons.
Aaron argues that gold’s appeal will only grow as rampant government spending continues and consumer debt hits fresh records.
Short Selling Becoming Controversial
Short-selling is part of a healthy market, but naked or illegal short-selling is very different. This devastating practice occurs when participants short shares that have not yet been determined to exist (and therefore a proper borrow is not in place — hence the term ‘naked’). Typically, traders must first borrow a stock or determine that it can be borrowed before selling it short. Naked short sellers target what they deem to be overvalued or easily manipulated stocks, increasing their confidence they can buy the shares sold short back at a much lower price.
Aaron updates us on a Korean decision to temporarily ban short selling altogether, and explains the impact its market.
Canada has its own short-selling debate, with many complaints around suspected naked shorting within its venture market. If investors lose faith in the function of fair markets, they do not participate…
Terry Lynch co-founded “Save Canadian Mining,” an advocacy group backed by industry giants such as Eric Sprott, Keith Neumayer, and Robert McEwen. For years, the group has conducted research, created reports, and met with key government officials and regulatory bodies in a bid to end illegal short-selling in the Canadian small-cap market.
As we know, particularly those of us who invest in TSX Venture stocks, naked shorters destroy the little guys.
Rouyn-Noranda Still Shines for Gold Mining
Towards the end of February, Alex visited Rouyn-Noranda, a town with a very long history of gold mining. A discovery in the early 20th century gave birth to this Quebec town as a global mining hub. Intertwined with mining and exploration ever since, the town’s economic activity is a great barometer of the overall industry’s sentiment.
When Alex asked locals how the economy was doing, they responded, “Great,” pointing to the smelters still going strong after so many years. The region continues to attract significant exploration dollars, specifically for gold.
The Abitibi region, from Wawa, Ontario, to Val-d’Or, Quebec, within the mineral-rich Abitibi greenstone belt, has produced over 200 million ounces of gold from over 100 mines.
