Gold Stocks Break Out Again

HUI, TSXV, B2Gold

Gold Stocks Break Out Again

Dear reader, more good news for us. In early/mid May I commented that the gold correction is over and we can now see that prices firmed up in the last half of May. We can now expect a test of $3450 resistance and an ultimate break out above this. I would not count on summer doldrums this year as this rally is not predominately North American driven.

This week, gold stocks broke out on the charts and the TSX Venture (junior explorers) made new highs. The HUI gold bugs index broke out this week and I believe it has a long way to go. The highs back in 2011 with $2,000 gold were around 600 on the index. I see 550 as an easy target for 2025.

Our 10 gold stocks now have an average gain of 81% in 2025. I see B2Gold as the best buy among them. More detail below.

This next chart is the Gold etf GLD to the HUI index, The end of 2024, the gap between the two was a record 60% and now this has moved to 105%. The gold stocks are cheaper than ever.

The TSX Venture index hit new highs this week and volume is increasing. I expect 900 will be an easy target this year. It hit around 1,000 just 5 years ago in 2,000 with much lower gold prices.

B2Gold - - - TSX:BTO, NY:BTG - - - - - Recent Price - $4.95

Entry Price C$4.45 - - - - - - - Opinion – strong buy

B2Gold remains my favorite gold stock to buy. It is way below it's C$9.60 high in 2020 and will have strong production growth this year with their new Goose mine to start producing.

This is the chart on the US side, BTG where most volume occurs. You can see a big surge in volume this year.

As you probably remember, I track the DUST and NUGT to gauge retail investor interest in gold stocks. Most retail investors are still playing the short side with volume surging into the DUST, 2 times gold stock short ETF, while the NUGT 2 times long gold stock ETF still has low volume. Here is the chart of DUST.

Subdued silver prices is another signal that retail is not in the market yet. I also watch silver bullion inventories at my coin dealer for increased interest. At this time they still have lots of silver inventory. Their gold inventory is low with just 12 one ounce gold mapleleafs. I expect silver will break out this year. Most likely a lot of retail investors are distracted by the crypto ETFs.

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