Three things you need to know today…

1) ‘You can’t imagine a more wonky, rickety and dangerous supply chain than this one!’

That’s what I wrote to my subscribers last year when I was describing the commodity market for tin.

Gold gets the glamour…rightly so…but I found a niche little story playing out in tiny tin.

What do we see today?

The tin price is skyrocketing because a major global mine in the Democratic Republic of the Congo is now being evacuated.

There is a regional conflict going on and owners of the mine can no longer put their staff at risk to keep the mine operational.

It must be serious — shutting down a profitable mine like this would be no easy decision and disastrous for the company accounts.

How high could tin go?

Commodity disruptions can result in skyrocketing prices. Sometimes it doesn’t even take much in terms of supply loss.

Look at what happened to cocoa after several bad harvests and other factors came together in 2024…

Chocolatiers around the world are still paying nosebleed prices today.

Could tin do the same thing? It’s possible. It all depends if this mine comes back anytime soon.

What I can tell you is that a tin miner was included in my report called ‘Small Caps, Big Comeback for 2025’.

That little miner is skyrocketing in price alongside the move in tin (yep, even as the wider market gets it between the legs).

This story may run for a lot longer yet. Get what you need to know here.

2) The gold price touched US$3,000 an ounce late last week. It’s almost doubled in two years.

Gold miners all over the ASX are hitting 52-week highs.

We’ve made the case for gold, and gold stocks, here at Fat Tail Investment Research. Some of our subscribers are reaping a rich harvest right now thanks to this.

It’s also perfectly in accord with Lion Selection Group’s [ASX:LSX] resource ‘clock’. I’ve shared this quite a few times since 2022. It shows we’re heading into the boom phase for the mining cycle…

However, there is a massive anomaly in the gold market right now. The big producers are surging higher as cash pours into their accounts.

The bull market is only just arriving for the juniors.

Here’s one estimate of the disconnect from LSX fund manager Hedley Widdup…

‘Since September 2022 gold producers, as measured by the Australian Gold Index (ASX:XGD) have gone up 2.4x. There could not be a starker contrast with gold micro-caps, which are down -34% in the same period.’

This dynamic is highly unlikely to last. That puts gold juniors — those developing a deposit or exploring for one — bang in the spotlight for the action coming up.

Either the big gold companies start swallowing them up, or the market will chase them for their future optionality on the strong gold price.

Keep in mind that…

3) …higher gold prices look like a slam dunk

We already know that the US federal government has US$37 trillion in debt.

Trump and Musk can do their best to fight waste and corruption, but the arithmetic is against them.

One ‘trick’ the US financial authorities pulled in recent years was to issue lots of short-term (1 year) debt to the market. Banks buy these and create credit when they do so.

It was a big stimulus and part of why the US stock market has been so strong for the last 2 years.

The problem for Trump and the team is they now need to keep refinancing this gargantuan pile of paper.

Gold will continue to glow as a beacon of safety — no counterparty risk — as this plays out.

As a regular industry report puts it…

‘In gold we trust’.

Keep reading below for more from our gold specialist Brian Chu….

Best wishes,

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

*****

Timing the Gold Cycle — Part Five

By Brian Chu, Monday, 17 March 2025

Last Friday, gold again made history, breaking above US$3,000 (~AU$4,730) an ounce, for the first time.

While it didn’t close above that level, it’s crossed the line in the sand.

Interestingly, gold broke above AU$3,000 an ounce for the first time on 20th March 2023, almost two years ago to the day.

Yet the sentiment towards gold and gold assets in these two periods is like day and night.

Today, gold stocks are rallying and breaking new highs. The bull market is raging, with gold stocks among the best performers over the past year.

Moreover, the momentum is gaining in this space. It’s spreading to the smaller explorers and early-stage developers, who are now finally feeling some love after four years.

This is how commodity investing works. Catch the cycle at the right time, and you could earn significant gains. But riding the cycle down could burn up your portfolio.

When investing in cyclical assets like gold and gold stocks, success comes from reading the cycle correctly and riding the waves to your advantage.

The biggest winners do their homework, building their holdings when these stocks are unloved, and remaining disciplined through the toughest times. They’re now sitting on substantial gains, waiting for the right time to harvest them.

Today I want to show you how the gold stocks deliver the best gains to those who wait, often for much longer than most investors are willing to endure.

Around the same time two years ago, gold stocks were as popular as a carnivore at a vegan gathering.

The situation was worse for the smaller explorers and early-stage developers. I’ve tracked these in my in-house Speculative Gold Stocks Index:

Note the indices conceal the volatility of individual stocks and give greater weighting to larger companies. Therefore, you can imagine how much some of these companies fell during this period.

From my analysis, the established gold producers fell by an average of 70% while speculative gold stocks fell by around 77%.

This sharp decline appears disproportionate, given gold fell by less than 20% from its highs in mid-2020 to its low in September 2022.

The combination of reduced mining activity from lockdowns, rising price of oil, border restrictions, and labour shortage all contributed to a tough time for gold mining companies.

Add to that the prevailing environment favouring critical minerals for the electrification revolution. Mining stock investors can easily cast aside gold stocks for lithium, copper, cobalt, rare earths, etc.

The slow setup to deliver exciting results

With the benefit of hindsight, the sharp drop in gold stocks relative to gold lines up substantial rewards for those who saw the recovery before it arrived.

After all, gold and gold stocks are cyclical. What goes around comes around.

Let’s see below how the indices played out in the past two years:

These indices showed that as gold rose above AU$3,000 an ounce, that didn’t spur investors to crowd into gold stocks.

2023 proved to be a rather frustrating year for many gold stock investors. While many producers gained ground, paring the deep losses in 2022, their prices were a fair distance from the 2020 highs.

For explorers and early-stage developers, the vast majority didn’t enjoy a recovery. Entering their third year of a bear market, many were low on funds. Therefore, they were forced to raise capital to fund their exploring and development activities. Many sold new shares at a deep discount, diluting their shareholders.

Patience and discipline could pay big rewards for speculative gold stocks

I’ve been the editor of our precious metals newsletter services, The Australian Gold Report and Gold Stock Pro at Fat Tail Investment Research for almost four years now.

I’ve helped my readers accumulate a portfolio of gold stocks that are now quite profitable. Most encouraging is that several speculative gold stocks have taken off, increasing by at least 300% from their lows.

Take Black Cat Syndicate [ASX:BC8] for example.

This company is now set to become a mid-tier producer. Late last year, it restarted the Paulsens underground gold mine. And earlier this month, the company became the new owner of the Lakewood processing plant. This will help bring forward the Kal East operation.

By the end of this year, it could be producing gold at an annual rate of 80,000 ounces.

The share price took off since early last year, delivering over 300% gains:

You may say the best time to buy this company was 12 months ago. And you’re right.

I could tell you about a few more companies with stories like Black Cat Syndicate. Most haven’t moved so far ahead as Black Cat Syndicate, but the set-up is similar.

And while there are no guarantees here, gold stocks remain some of the riskiest on the market…

…the opportunity is there for you to seize now before these companies gather momentum. Especially as more investors realise gold stocks are now one of the hottest assets. Once they catch the up leg, their prices could climb quickly.

If you want to find out more, you can check out The Australian Gold Report to get you started on building a precious metals portfolio. I have recommended some established gold producers to help set up a strong foundation plus two smaller developers with quality growth assets.

Don’t hesitate, act now!

God bless,

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

*****

Murray’s Chart of the Day
— The Euro

By Murray Dawes, Monday, 17 March 2025

The Euro (EURUSD) has perked up against the US dollar recently as Trump throws his weight around.

The EURSD has been under pressure since the crash in 2008, so the question has to be asked whether we have seen the worst of it and it’s time for the Euro to shine.

To gain an insight into the big picture I have created a semi-annual chart which shows the Euro going back to 1971 (It was called the ECU or European Currency Unit prior to the Euros launch in 1999).

When you see the big picture, you should notice the very long cycles of bullish and bearish periods for the Euro.

Each bearish cycle has taken the Euro down into the buy zone of the previous bull cycle.

Once again, the Euro is testing the buy zone of the last bull cycle from 2000 to 2008.

A semi-annual buy pivot was confirmed in June 2023.

So, there are signs that a major reversal in the Euro may be underway.

Confirmation of a monthly buy pivot this month would be a bullish development, and I would stay bullish on the Euro unless it drops back below 1.00 to the US dollar.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps