In the world of investing, understanding the dynamics of gold prices and resource stocks is crucial for making informed decisions. John Feneck, a seasoned portfolio manager and consultant at Feneck Consulting, shares his insights on the current state of the gold market and the resource stocks he’s watching.
Gold has been on a steady rise, surpassing the US$2,000 mark per ounce. According to John, reaching US$2,200 could trigger a FOMO (fear of missing out) trade in gold stocks. Despite some short-term downside risk, John is confident that gold will not retest the US$1,800 level. He attributes the recent rally to various factors, including geopolitical events, CPI data, and the dovish stance of the Federal Reserve.
When it comes to gold stocks, John sees a significant disconnect between the soaring gold price and the undervalued gold stocks. He points out that many gold stocks are trading at attractive valuations, with RSI levels indicating a buying opportunity. Companies like Newmont, Barrick Gold, and Agnico Eagle Mines have been outperforming, beating earnings expectations. John believes that this presents a compelling opportunity for investors to capitalize on the undervalued gold stocks.
Shifting focus to silver, John acknowledges the challenges in the silver market, with resistance at the US$26 level. However, he remains optimistic about the potential for silver stocks to outperform once key resistance levels are breached. Companies like Silver X Mining, Aftermath Silver, and Guanajuato Silver Company are on John’s radar for their promising prospects in the silver market.
In the energy transition metals space, John highlights the importance of copper as a key player in electrification and population growth. Despite a downtrend in copper prices last year, John sees copper as a “screaming buy” due to its essential role in the transition to clean energy. Companies like VR Resources, with projects in copper and other battery metals, offer significant potential for growth in the energy transition sector.
John also mentions an upcoming conference on energy transition metals and commodities in Washington, D.C., on April 29th and 30th. The event will bring together industry experts, CEOs, and investors to discuss opportunities in copper, lithium, and other battery metals. John encourages investors to attend the conference to gain valuable insights into the energy transition sector.
In conclusion, John emphasizes the importance of due diligence and research in making investment decisions. He urges investors to reach out to companies directly, ask questions, and seek professional advice to make informed choices. By staying informed and proactive, investors can navigate the complexities of the market and position themselves for success.
Definitions:
FOMO (Fear of Missing Out): The fear of missing out on a profitable opportunity, leading investors to make impulsive decisions.
RSI (Relative Strength Index): A technical indicator used to measure the momentum and strength of a stock’s price movements.
CPI (Consumer Price Index): A measure of inflation that tracks the average change in prices paid by consumers for goods and services over time.
Dovish: Refers to a central bank’s policy stance that is accommodative and supportive of economic growth, often involving lower interest rates.
Electrification: The process of transitioning to electric power sources and technologies, often associated with clean energy initiatives.
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