US$8,000 gold: Not as crazy as it sounds | Australian Markets

We’re turning over a new leaf right here at Fats Tail Every day. I’m going to be your every day editor from right here on in.

Don’t stress in case you’re a fan of Ryan Dinse or Brian Chu. They’ll nonetheless be contributing.

That is going to be an thrilling few weeks in Fats Tail Every day.

I can’t provide you with full particulars at this stage.

However I can inform you we’ve partnered up with a fairly well-known investor.

With a purpose to convey you a fascinating…and doubtlessly very profitable…story.

All I’ll inform you now could be it centres round Elon Musk…a backroom assembly that passed off a mile from the White Home (that wasn’t reported on by the press)…

…and one thing huge that’s going to ship shockwaves all through the world, doubtlessly within the final week of Could.

Apologies for the smoke and mirrors. However that’s all I’ll say at present.

Apart from in case you suppose Musk and Trump’s shenanigans plan to radically reshape the US authorities is the large story of 2025…

…simply wait until you hear what we’ve got to show you quickly!

Keep tuned…

Proper now, I’m now tasked with bringing you the three prime belongings you need to know every morning.

With that thoughts…

1) All final week Fats Tail Every day explored the twists and turns occurring within the gold market across the world.

I’ve bought more so as to add at present too.

We bought a huge, juicy clue final week that this valuable metallic bull market may have a long solution to run but.

Let me inform you about mining service company Imdex [ASX:IMD] to see why.

That is a advice of mine from February final yr, truly. It’s at present up 92% for readers of my e-newsletter Australian Small-Cap Investigator.

That’s not why we’re speaking about it now, although.

Imdex put out their outcomes final week. They supply drilling providers and information evaluation for mining corporations.

You’d count on issues to be buzzing for them with the gold price roaring like it’s now.

Not so. Why’s that?

Mining exploration has gone down for 4 quarters in a row.

That places Imdex in a robust industry dynamic.

Their group income was, in truth, down 10% on the earlier half.

You’d normally count on the market to unload the shares with falling income like that.

However Imdex’s shares went up!

What’s occurring?

Right here’s the large level…

The market is wanting on the barnstorming gold price and projecting huge exploration {dollars} to come back out in 2026 and 2027…and past.

Imdex is now trading on 20x earnings even when the exploration spending hasn’t picked up but.

This is the reason my colleague Brian Chu is saying to anybody that can hear that NOW is the time to contemplate the gold juniors.

Brian tells us that the large money flows working by way of the gold industry ought to move to the smaller finish of the market.

The massive gold corporations are going to make use of their large money flows to buy up tasks, finance exploration and consolidate totally different gold areas.

Clearly, the market thinks the identical factor.

That’s why it’s ready to bid up Imdex despite the fact that exploration spending remains to be subdued and stopping the company from producing its best outcomes but.

Right here’s the chart of IMD during the last yr…

That is the ability of the gold bull market at work. The outlook will get higher for Imdex each time the gold price goes up.

The identical is true for gold juniors that depend on investor help to finance their capital development or exploration campaigns.

Now, not all gold shares will carry out like this, they carry high dangers after all, however as you’ll be able to see, the setup is there…

Brian calls it the approaching ‘Gold Fever’, and fairly rightly so. Make sure you take a look at his latest evaluation right here.

We’re nothing close to the height of this gold bull market, in my opinion. See my colleague, Murray Dawes’ Chart of the Day for more on that beneath.

(By the way in which, Murray may have a chart of the day on daily basis in Fats Tail Every day any further. Make sure you test it out following my essay.)

2) The outcome wasn’t all dangerous for Imdex. They paid down debt within the half and did what they may with what they needed to work with.

They held their margins and market share regular. They need to be in a web money place by subsequent yr. They’ve additionally closely invested in R&D, together with AI, of course, that might bear fruit in future years.

Imdex says the document for exploration spending was US$21 billion in 2012. It’s about half that at present.

In different phrases, the world has a long solution to go to get back to the previous increase time highs on the peak of the final commodity increase.

Right here’s the opposite factor we get from Imdex: 75% of exploration money goes into copper and gold.

Each gold and copper are up a minimum of 10% thus far in simply the primary six weeks of the yr. This validates the market’s view that Imdex may probably go into a robust period forward.

I’m not recommending my subscribers promote now, that’s for sure. However it might maintain round this price till we get a clear restoration in exploration spending.

3) As I discussed, make sure you keep studying beneath. My colleague and technical guru Murray Dawes will now be posting a Chart of the Day in each challenge of Fats Tail Every day.

Murray is a excellent technical analyst. He additionally initiated some cracking gold positions simply as they broke out late final yr for his subscribers.

Murray reveals us beneath why US$8,000 is just not as loopy because it sounds while you have a look at historical past…

Finest needs,

Callum Newman,
Editor, Small-Cap Programs and Australian Small-Cap Investigator

Murray’s Chart of the Day

That is a chart of gold going all the way in which back to 1971 when the US greenback was taken off the gold customary.

The dimensions on the chart is what is named a logarithmic or log scale.

That simply implies that proportion strikes look the identical anyplace on the chart. That isn’t the case on a regular scale.

It helps to make use of a log scale when you find yourself taking a look at information over very long durations of time.

The primary apparent remark is that trends within the gold price can final for a very long time.

Most people anchor their expectations about what they suppose the price of a stock or commodity will do to the present price.

That’s typically a mistake and means you underestimate how far costs can go.

To show you what I imply I’ve drawn a line that’s the actual duplicate of the rally that we noticed in gold from 2001 to 2011, when the price of gold jumped from US$255 to US$1,900.

I’ve positioned that line on the lowest level of the correction in gold in 2015.

Primarily based on that precise rally that occurred, it means the price of gold must rally to US$8,000 by 2030 to copy it.

Most people would snigger in your face in case you stated gold may hit US$8,000 by 2030. However primarily based on historical past it’s not as far-fetched because it sounds.

Regards,

Murray Dawes,
Editor, Retirement Dealer, Fats Tail Microcaps, and Fats Tail Alliance