Between late 2018 and mid-2020 gold prices surged 70%, ASX shares went parabolic
Despite hitting all time highs above US$2200/oz in 2024 stocks are yet to react the same way
Sprott managing partner John Hathaway calls this disconnect between gold and share price performance “the greatest I’ve ever seen”
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The mini gold boom between late 2018 and mid-2020 sparked a 70% increase in prices, from ~$US1200 to a peak of ~US$2050/oz.
Gold, and to a lesser extent silver, is used as a hedge in times of economic uncertainty.
During this period precious metals fervour was stoked by a troubled macro picture dominated by COVID, Brexit, trade wars, Hong Kong riots, and weakening global growth.
This was a wild time and frothy time for ASX miners, junior goldies, and their investors.
There were numerous success stories, like $2m capped, ‘bottom-of-the-drawer’ spec stock Spectrum Metals which, in Feb 2019, stumbled on bonanza grade gold at its Penny West project.
Ongoing drilling success (and some parabolic share price action) culminated in a friendly $230m takeover by Aussie mid-tier Ramelius Resources (ASX:RMS) early the following year.
Also in 2019, MetalsTech recorded the biggest one-day gain for an ASX stock – 500% — after announcing that it had signed an option agreement to acquire a gold project in Slovakia.
That was surpassed April 15 the following year by Predictive Discovery (ASX:PDI), which gained 733% on a new gold discovery in Guinea.
So…. What’s going on in 2024?
This time, investors are displaying a complete lack of interest in Aussie gold stocks even as the prices scaled all-time highs.
The divergence between the metal, which is up +30% from its November 2022 low of US$1640/oz, and stocks performance is puzzling the experts.
Read full article: Stockhead
