Golden Time

- Faith is taking the first step even when you don't see the whole staircase.

- Martin Luther King, Jr.

The Founders...

took the leap of faith by agreeing to put gold as the currency of the nation into the constitution. At the time, inflation was running rampant due to money printing of "Continentals." This was the fiat currency during the American Revolution. Today, it may take another leap of faith by you and I to purchase gold. You should know by now that the Fed and banks are against gold and are for fiat. We, at Evolution believe in gold because we believe in the wisdom of the Founders. We do not like the term, "Gold Bugs." Anyway, this is what we see as the outlook.

Seasonal Pattern

Gold has shown a seasonal pattern in the charts for many years. The best period for the metal to advance is the October to January time. This times well to this piece. The worst period occurs during April to July. 

King $Dollar

It does not matter what commodity that you buy or stock equivalent, the dollar will determine your investment. Also, keep in mind that there are forces, notably the BRICS that are seeking to dethrown the king. They are formidable, but a long way from being a threat. With that said, a closer look at the dollar at this time is necessary in considering the precious metals. 

Resistance and Support

King dollar's last high was in November 2023 at 107. It dropped hard and fast to 100, but rallied quickly. However, it could not pierce 106.5. This is resistance.  Whether market forces were anticipating a Fed rate cut, the price action had the dollar drop back to 100. This becomes support. Any break below this level will add juice to gold. Since the outlook from the Fed is more rate cuts, the dollar will feel pressure and probably fall. After 99, there is no resistance until 91. This gives gold a strong floor.

Gold's Outlook

It is no secret that gold hit a new all-time high recently. We use Fibonacci for up or down movement. The math says that gold will reach $2805. This is a solid gain from the present $2660 level. Gold has strong support at $2585. 

Past Calls

We told you in the past that we liked three gold stocks: Barrick, Wheaton and Argonaut. The three cover all price levels. Since that time, Alamos Gold took over Argonaut Gold. It is a good deal as this is an excellent company. They spun out to shareholders a new company with decent mines. Florida Canyon Gold (FCGVF) is a cheap buy (.44), but Alamos gets added to our buy list. AGI has been in a strong uptrend since the merger. There are eleven analyst who call the firm a strong buy with a target of $24. The miner has grown revenues by 84% yoy and 54% yoy for the last five years. The only negative is the high P/E (39). However, like a tech high flyer, the firm is increasing revenues. The current outlook is for earnings to fall in the next report, but revenues will grow. That would be the time to buy. We will buy at $16, but the stock might not fall to thst level.

We still believe in Barrick (GOLD). It is vastly under valued. We feel the problem lies in a lawsuit at one of its biggest mines. Nevertheless, Barrick has grown revenues by 530% yoy. Wow! The five year average of 293% beats any and all comers. There are 22 analysts who call it a buy and to reach $23. We see a lot higher than that.  

There are a few other good miners. Newmont is the world's largest gold miner and Wheaton is a strong streamer. One more note. Agnico Eagle (AEM) has been the best performing gold stock for years.

Bottom line: We do not give stock recommendations often. We feel terrible if we are wrong, but gold has proven the founders to be right. It retains value and with inflation that is comforting. Gold has solid support from the Fed with its rate cuts looming. We will take the leap of faith.   Peace.