Today’s Fat Tail Daily begins with a guitar in hand and a bit of Cat Stevens playing.

“Remember the days of the old school yard…”

You see…

When I was in Year 12, I did a project on the war in Kosovo happening at the time.

One of my teachers took great delight in the idea that US President Bill Clinton was using the issue to distract everybody from the Monica Lewinsky scandal.

That brings us to today. Donald Trump is sending in the National Guard to LA to stomp down protests.

Some argue it’s a broad overreach of Presidential authority. It probably is.

But the whole shebang is also a handy media circuit breaker from Elon Musk’s tweet that Trump is in the Epstein files.

Elon made a rash move there. I don’t know whether it’s true, of course. But Trump has a nasty side.

Putting the most powerful man in the world offside is not a great idea, even if you’re the richest man in history.

You might spend your life in court, or a jail cell, and nothing is fun in either.

Court cases and broken friendships seem to follow Trump wherever he goes.

We left off yesterday with the idea that everything Trump does makes gold look even brighter.

The current LA riots may be small fry in the grand scheme of things. But they add to the idea that American harmony is breaking down.

That, in turn, adds to the idea that…

America is no longer a secure place to hold assets

Everybody knows one thing.

Trump has a money problem. The American deficit needs handling. Foreigners hold trillions in US Treasuries.

At some point it’s not hard to imagine Trump just not paying the interest on these bonds, or calling them void with some bogus executive order.

Trump has a gangster’s mentality: whaddya gonna do about it?

I’m sure every international creditor is wondering along these lines.

Fund manager Roscoe Widdup makes the following point…

“From a liquidity perspective gold bullion is … to our reckoning the only asset class that is actually sufficiently liquid and sufficiently defensive to be able to fill that gap of US treasuries,” Widdup said.

“And if you then translate that into central bank demand for gold in the traded gold market, that’s equivalent to adding a fifth of annual demand every year. An extraordinary amount.”

In other words, the starting gun on the gold bull market has gone. But the big run is still coming.

That puts the entire gold sector rich in opportunity.

Here’s something else that helps give the gold miners the purple patch they’re currently in.

Almost every other commodity you care to name is down in the dumps: nickel, lithium, graphite, coal, oil.

That means labour is plentiful. That wasn’t the case 3 years ago. Abundant labour helps keep costs down for gold miners.

This current dynamic also means investors are only willing to back gold projects right now.

The AFR cites evidence that exploration spending is slumping to a four year low.

There’s one exception: gold projects!

See this bit:

“The precious metal attracted $621.2 million in financing during the quarter – more than double the figure from the same period last year. This surge is attributed to gold’s traditional role as a safe-haven asset amid ongoing global economic volatility.”

This makes it easy, in one sense, for you and me

If you want to invest into mining, there’s only one commodity to back right now.

You guessed it: gold!

Between my two paid advisories, I have 5 gold positions.

All of them are in profit as I write. I sold another one earlier in the year for a 168% gain, too.

We’re almost to the end of the financial year. The reality is that the gold sector was the one to back over the last 12 months.

You might think you’ve missed it. Please don’t.

I think we’re on track to repeat the extraordinary lithium boom that ran, with a big dip or two on the way, from 2015-2023.

Gold shares bottomed out in 2022. But the juniors are only really lifting now. Trump’s second Presidency lasts until 2029.

This is highly likely to send the gold industry all over the world looking for the stuff. The high gold price will keep them at it. We can “thank” Trump for that.

I can share one exciting gold exploration story with you today, right here in Australia.

Best wishes,

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

Murray’s Chart of the Day –
Rare Earths

By Murray Dawes, Tuesday, 10 June 2025

Rare Earths have suffered a three year bear market that has taken the Van Eck Rare Earths and Strategic Metals ETF [NYSE:REMX] all the way down into the buy zone of the whole rally from 2020 to 2022.

It is still too early to call an end to the downtrend, but any signs of life from here should be watched closely.

The above ETF has many lithium stocks in it which is weighing it down. Individual rare earth stocks are performing better than the above ETF.

Lynas Rare Earths [ASX:LYC] has jumped impressively over the last month and US based MP Materials [NYSE:MP] is also on the move.

So despite the fact rare earth and lithium pricing remains in the doldrums, the strategic importance of rare earths is front of mind for investors as the US and China sit down for their trade pow-wow.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps