Gold prices have soared to a record high of above $3,000 per ounce, prompting a breakout in mining stocks and renewed interest in precious and base metals amid mounting macroeconomic and geopolitical uncertainty.
John Feneck, founder and CEO of the Feneck Commodities Report, said the sharp rally in gold came as the broader U.S. equity market saw $5 trillion in value erased, driven in part by concerns over trade policy under a second Trump administration.
“There’s a greater sense of urgency with Trump in this second term,” Feneck said in an interview with Paul Harris on Kitco Mining’s Digging Deep. “He just said the R word – recession – and then markets that following Monday just responded negatively.”
The Nasdaq dropped 3.8% that day, which Feneck called “significant” and reminiscent of the market shocks seen during the Great Depression. “If you’re long the broad market right now… you need to be with a financial advisor immediately,” he said.
With gold rallying, key mining ETFs have broken out of long-term resistance. “ We’ve been saying for months now that once GDX breaks through that $42-43 resistance level, it’s going to go much higher,” Feneck said. “Now we’re trading around $44.90. It’s got a path to $50 and then $60 within the next 12 to 18 months. You’ve got a lot of upside in the producing larger cap names.”
Meanwhile, GDXJ – focused on smaller-cap miners – has also surged. “It looks a little overbought at $55, but you could see a much higher price because you’ve got more torque in that than you do in GDX.”
As generalist investors begin to re-enter the mining space, Feneck said the opportunity is still early. “This is when you can make some serious money,” he said. “A lot of these gold and silver stocks have not moved much at all yet.”
The rally has reignited M&A activity. In Australia, Ramelius Resources announced a AU$2.4 billion deal to acquire Spartan Resources. Feneck acknowledged Australia’s appeal to retail investors but raised concerns over capital structures. “ What I don’t like about the Aussie market is the number of shares outstanding on a lot of these companies. I just can’t get my head around a billion-plus shares,” he said. “But if a U.S. or Canadian junior gets an ASX listing, that’s bullish.”
In North America, Feneck pointed to growing investor pushback, citing VanEck’s opposition to Equinox Gold’s proposed merger with Calibre Mining. “I like to see Joe’s team [at VanEck] do more of that… they have size and a big voice in our sector,” he said.
Source: Kitco
