As gold fever grips the markets, search for value here…

As you’ve seen, we try to cover the full spectrum of opportunities across the resource landscape.

That means I probably haven’t paid enough attention to the one market that has been flying over the last six months: gold.

So, as we close out the week and approach a new month, I thought I’d invite Fat Tail Investment Research gold expert Brian Chu to get his take on where the gold market might be heading next.

So, with that, over to Brian…

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers

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Gold fever has taken over

By Brian Chu, Friday, 28 February 2025

2025 is the year where gold fever has taken over.

Funnily enough, though, gold has doubled in the last five years and risen by double-digit percentages in the last two years:

The same time in the last two years, gold was flying under the radar. People were more interested in lithium and critical metals in 2023 and uranium last year.

That’s not the case now.

It seems like everyone is paying attention to gold’s relentless rally and following the latest news about Fort Knox and the Bank of England.

I’m even noticing how trolls on social media are dismissing claims that there’s no gold in Fort Knox as a conspiracy theory. Even they’re catching onto gold!

Perhaps you’re hearing people talk about the price of gold in a weekend BBQ or on the golf course. Or your Uber driver casually mentioning how gold has gone on a tear recently.

Now, you might pause after reading that last paragraph. Is Brian hinting at something?

Yes, read that again and reflect upon it.

The crowd gathers as gold and gold stocks set another record

Let’s continue.

The reason I raised this point above is because there’s no doubt gold is now a hot commodity. Likewise some gold mining companies have rallied significantly in the past month as investors started chasing them with renewed rigour.

The ASX Gold Index [ASX: XGD] broke above 10,000 points for the first time ever on Thursday 6th February, just over three weeks ago:

Notice how ASX-listed gold producers and late-stage developers have rallied for over two years now. Some of the leading gold stocks including Northern Star Resources [ASX:NST]¸Evolution Mining [ASX:EVN], De Grey Mining [ASX:DEG], Genesis Minerals [ASX:GMD], and Gold Road Resources [ASX:GOR] have set new records.

I’ve mentioned before that the market is focusing on these companies as they clock up these milestones.

But that’s not where I’d plough my funds, nor should you.

Why’s that? Aren’t the technical indicators suggesting these are compelling stocks to buy?

Possibly. But go back to the earlier paragraph where I mentioned about people talking about gold in places where you wouldn’t expect.

Would you go and join the crowd at a department store to buy the next season’s hottest fashion at retail price? Or would you hunt for bargains at a lesser known store that sells items which becomes the latest trend six months later?

I know where I’d go.

A chance to reap bigger rewards by unearthing hidden value

Going back to gold stocks, there are companies that could become star performers later this year. But I don’t believe these will be the big names.

You’d have to go for something smaller, moving into the very high-risk zone.

I’ll give you some examples of companies that were unloved at this time last year and are now a real hit.

The first is Black Cat Syndicate [ASX:BC8], a budding mid-tier producer that traded at $60 million 12 months ago. Today it’s worth just over $500 million!

Shareholders went through an agonising four years to see the share price return to levels last seen in early 2021:

What changed the company was its purchase of two old mines in April 2022. During this period, the company drilled the ground, upgraded its in-ground gold resources and refurbished the infrastructure. It’s poured its first gold recently.

Moreover, management announced on Wednesday that it purchased the Lakewood processing plant in Kalgoorlie, Western Australia. This plant allows Black Cat Syndicate to bring forward gold production in another deposit by 15 months.

Even after its phenomenal run, I suspect there’s more to come. This latest purchase could help the share price rise above $1, if things turn out well.

Some of my newsletter readers at Gold Stock Pro are likely sitting on exciting gains, having bought more shares as the company plunged. Our conviction is paying rewards.

But this is only one emerging success story.

You might be wondering which companies are primed for a similar breakthrough.

Besides Black Cat Syndicate, I’ve identified a handful of companies that could deliver a similar rebound.

Their share price hasn’t run up like Black Cat Syndicate (yet), so there’s still time to catch the rally.

Of course, there are no guarantees here, gold stocks carry high risk, but I believe the setup is there.

If you want to know more about how the Australian gold mining industry is rumbling, why not watch my presentation here?

And if you want to get stuck into speculating on the next hot gold stocks, learn more about my premium gold stock speculator service, Gold Stock Pro.

God bless,

Brian Chu,
Editor, Gold Stock Pro and The Australian Gold Report