Think you missed the gold bull market?

You’ve rode the gold rally in the past two years and just felt the jolt from most recent correction.

However, you made substantial gains leading up to the correction, right?

For some they did. I know that from the mail I received and those who approached me at the recent Australian Gold Conference.

But not everyone who invested in precious metals assets enjoyed the full extent of this rally.

I recently received a reader’s email that I’d like to highlight, as some of you may echo his sentiment:

I am moved to write to you after reading your article today, to take up the issue of clarity and trust in your advice. First of all, I want to thank you for your advice for positioning my wife and I into some wonderful stocks that have exploded in value during this amazing gold run. Unfortunately, while many are no doubt off to the races, I am in the stables without a horse, Why? because I followed your instructions and sold as you instructed. Today I see that you clearly regret having guided some subscribers out of some shares too early.

I am one of those subscribers, 70 years old and will never see such an opportunity again to help me keep predatory governments and bureaucracies at arms length in our looming old age. The horses have bolted. That is my risk and profits foregone. You write that you hope such subscribers would have invested our modest profits in something else, but in what I ask?

My point in writing is not to chastise you but to simply ask that you please be very explicit when advising subscribers on actions to take. Sell means sell to me, not a third or a half but ‘everything sell’. I have to have trust in your advice.

I accept this gentleman’s criticism. Not everyone can follow the guidance I provided throughout these four years. But there are reasons why I sent my instructions as I did. Those included the following:

• Recommending you buy certain stocks when they were out of favour,
• Encouraging you to top up and increase your holding as they fell further,
• Suggesting you sell a part holding when the price recovers, leaving some exposed to further upside,
• Suggesting you buy some more when these companies correct significantly, and so on.

I concede sometimes they were confusing. I don’t do all-or-nothing trades. Nor do I get my timing and stock selection perfectly right. All this may frustrate you.

Today I’ll explore how I make my decisions, with reference to the gold price cycle. Let me try to reconcile the tension between what this reader’s request is and how I invest and guide my readers to do the same.

Understanding and harnessing
the gold price cycle

To start, here’s some context using the price charts of gold, silver and the ASX Gold Index [ASX:XGD] from 2020 till now:

As you can see, gold, silver and gold stocks have gone through a phenomenal increase since around March 2024 when the Federal Reserve confirmed it would cut rates three times that year. The momentum gradually built up with the biggest gains came in the last three months as they went parabolic.

This is the gold price cycle. It lasts a few years, complete with the peaks and troughs. We’re currently riding to the peak. I can’t say whether this recent correction marks the top. But I’m leaning on there being another rally from here that could take us to the top.

Investing for keeps

Now there are ways to play a commodity price cycle to win and other ways that could send you broke.

Many of you who are reading this may have experienced this gold price cycle firsthand. You bought in 2020, again in 2021 thinking the bull market was going to continue, except things turned around by mid-2022. You may have slogged it out in 2022-23 when the markets favoured cryptos, critical minerals, oil, tech stocks, and so on.

Basically anything but gold stocks.

There were several occasions when throwing in the towel seemed to be the right thing to do. You may have taken 70-90% hits on some of your holdings. You watched your friends brag about multi-fold gains in lithium, oil, tech stocks, and cryptos. And you felt like you were holding onto hope on some of your explorers, which could well be stringing you along with a story but have nothing to deliver.

Then the trend turned in the past 18 months, even turning manic in the last three. You watched your portfolio grow substantially.

But pesky Brian would write to you suggesting you sell a part stake of company A this week, a part stake of company B the following week, and so on. He told you that things are looking a little overvalued.

While he made some calls a little early, one thing he had in mind was to protect your profits even if it meant sacrificing some upside gains.

Look at the pullbacks and corrections amidst the bull run, namely:

• April to July 2024
• November to December 2024
• April to May 2025
• June to August 2025,
• The most recent correction

Fact is, trying to hold onto your stocks all the way to the top to sell is a risky move. And no one can see the top or bottom except with the benefit of hindsight. The worst thing for you and I would be to overstay our welcome and watch those profits slip out of our hands. You may have experienced that with some of the market darling sectors I mentioned before.

For this reason, my strategy is to secure some profits early and pursue rallies from an advantageous position. I hope that works well for us. There are other ways, so feel free to blend other styles if they work well for you.

Ring here for another round…

As for the prospect of another rally in gold, silver and gold stocks ahead of us, I’m not the only one who thinks that’s possible. My colleague, James Cooper, shares that view too.

He’s seeing a potential commodities supercycle setting up. Besides gold, there are other commodities that he believes will benefit from this.

So whether you think that gold and silver had its run or there’s more steam to take them higher, you should check out what James has to say. Click here to find out more…