A golden opportunity ☀️

Happy Weekend, Folks!

One of the most important trends in the market right now is the recent surge in gold. My friend, Marin, from Katusa Research has some very important insights to share below.

Lend him your ear and have a great Saturday!

“Endless Ammunition” and the Engine Powering the Current Gold Market

They’re the world’s most powerful gold buyers for a reason.

Central Banks have accumulated massive amounts of gold in the last 2 years, and show no signs of stopping.

But monumental moves might still be coming…

That’s why in 2013, Deutsche Bundesbank made headlines by deciding to repatriate 21.67 million ounces of gold from vaults in New York, London, and Paris. 

This bold move, driven by fears of past Soviet threats, underscored gold's crucial role in national security and economic stability. 

By relocating over half its gold reserves to Germany, the Deutsche Bundesbank emphasized the critical need for countries to hold their gold physically, especially in volatile times.

What implications does this have for today's global gold market and the burgeoning field of gold mining stocks?

A LOT…

Let’s dive deeper.

Central Banks Are Hungry for Gold

Central banks have been making noise in the markets, and have been the primary buyers of gold in the last few years.

This chart illustrates the annual net balance of gold transactions by central banks globally since 2010, showing that they've bought more gold than they've sold each year.

For over fifteen years, central banks haven't sold off their gold reserves—they're strategists, not speculators. 

Remarkably, in the last two years alone, they've acquired over 1,000 tonnes each year.

At current prices, that’s nearly $80 billion worth of gold added to central banks’ holdings in both 2022 and 2023.

This robust demand underscores gold's appeal as a crisis buffer and inflation hedge. 

• According to a 2023 survey of 57 central banks, 70% plan to further increase their gold reserves within a year.

But buying and storing physical gold, particularly in large quantities, presents a logistical hassle.

Let’s face it, it’s a hassle most retail and even institutional investors don’t want to deal with.

Beyond central banks, gold ETFs also fuel significant market demand, offering a simpler alternative to the complexities of handling large physical gold volumes. 

Who are the Largest Buyers of Gold?

Last year, China was the largest gold buyer among central banks, adding 225 tonnes to its reserves – an increase of more than 11% from the year before. 

Other top buyers included the National Bank of Poland and the Monetary Authority of Singapore.

As gold prices soar—already hitting $2,400 this year with top analysts at Goldman Sachs and UBS projecting peaks between $2,600 and $3,000—the inherent value of gold companies with solid assets escalates.

This rise is undeniable and sets the stage for potential significant gains in gold stocks.

Remember, one of the major keys of being a successful speculative investor in mining stocks is timing the window.

And that window might just be closer than you think. 

Which is why we’ve identified an opportunity that ticks off all the boxes.

You can access it HERE on Monday. 

(Make sure to refresh that link right at 9AM EST).

Stay tuned as things are getting spicy in the small cap gold space.

Best Regards,

Marin Katusa

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