On this gold futures chart (price per oz), I have marked Coppock buy signals with blue smileys, a key resistance level (now broken) with a blue line, and a bunched moving averages breakout with a yellow smiley. In March 2024, gold made an important breakout and has since moved significantly higher.
On a longer-term chart using six-monthly candlesticks, we can highlight two key buy signals. We can also see why it may still be early days for this new bull market.
Gold has much in common with Bitcoin. It is scarce, it does not have many practical functions but it has an almost mystical appeal to homo sapiens. At the latest prices, a kilo of gold is worth around £80,000. It seems to me that it could easily be £1m, certainly $1m. It makes gold an interesting speculation.
The profits of gold miners are highly leveraged to the price of gold and the costs of production. They process tons of ore to produce grams or ounces of gold. A rising price can have a staggering effect on profits and cash flow and make unprofitable mines profitable.
This means shares in gold miners tend to move more violently than the gold price. Best of all is a mining company which makes a rich new gold discovery. This is a specialist field which I am not proposing to dig into, to coin a phrase, but I am sure there is loads of stuff online about it.
Just to give you a flavour of what can happen, below is a chart of shares in Kinross Gold Corporation, a South African gold miner. The gold price has roughly doubled since the 2022 low point. The price of Kinross is up nearly fivefold.
Share Recommendations
Gold or gold futures. GC
Gold shares
Kinross Gold Corporation. KGC
Blast-Off for Dell & ARM; Palantir Bubbles
Let’s Talk About Strategy; Memory Shares Win The Lottery
2 To Buy For Brave Investors – Bloom Energy & Rocket Lab
