Let us look at some smaller gold stocks that are performing

I have been steering readers into gold stocks for the best part of a year, but I am sure that my advice has fallen on a number of deaf ears. Maybe it's because those that are locked into non-performing EV, rare earth and other critical stocks haven't had the capacity to venture elsewhere. Maybe it's because gold stocks are different.

When you are chasing a thematic where group think and naivety dominate, such as when the market was seeking exposure to a rare earth, graphite or similar sector as the overriding objective, quality control can be second priority. That is because the sector is being driven by enthusiasm rather than analysis, so it is easier to make an investment decision. That is called running with the pack. With gold stocks a more informed approach is better.

There are far more considerations involved when deciding which gold stocks are best for you. Should you be chasing exploration plays with expanding resource horizons or should you be after profitable, or potentially profitable producers that will benefit from the higher gold price? Should you be chasing the lower grades that offer more leverage with economies of scale or should you chase smaller operations with fat profit margins, such that the gold price movements are secondary considerations.

The range of choices in the sector is so wide that there will be something for everyone, but you can still lose money if you choose the wrong ones. There are different levels of truth telling in the promotion and there is a wide range of skills from the A teams to the C teams. More so than in any other commodity, the individual merits of companies and their projects play a bigger role in determining investors outcomes.

We will increasingly be focusing on a range of gold opportunities at the smaller end where profitability can be high and development can be accelerated to capture the high gold price regime.
 

 WeeklyComm25Jan2025.pdf