Is a Gold Bull Market Finally Starting?

by JDH on June 22, 2019

I have no idea.  Here’s a long term chart:

We all know the story: gold went from under $400 in 2005 to $1,900 in 2011, and that was it.  Gold then took two years to drop into a trading range between $1,050 and $1,375, and that’s where it stayed, for 5 years, until this week.

For the first time since March, 2014 gold traded above $1,400 US, albeit briefly.

The year to date chart is impressive, with a big spike above $1,400 (but that’s how it works with a five year high).

So now what?

$2,000 by Canada Day?


That’s not how it works.

My guess is that this is a big, fast move, and a pullback is necessary, so I liquidated most of my holdings of NUGT on Friday, and I’m sitting on cash, ready to redeploy on weakness.  I like cash.  Cash is king.

That being said, I did not sell any of my gold stock holdings, including my largest holding: EQX.V – Equinox Gold Corp.

From a low under $1.00 (both at the start of the year and again in May), the rocket ride commenced, taking Equinox to $1.45, before settling back in the $1.30 range.

Nice run.

I think, after a pause, Equinox has a lot more room to run, and I expect it to be a $2 stock before the end of the year.

Of course I expected it to be a $2 stock last year, and I was totally wrong, so govern yourselves accordingly.

My order of battle is:

  • hold a few puts on Tesla, since I want to have something when it goes bust;
  • liquidate the majority of my holdings in Canadian pot stocks, which have had their run, and switch some of those funds into US pot stocks; and
  • buy gold stocks on weakness.

That’s the plan.  We’ll see how it goes.  More next week.