Categories: General Market Commentary
Topics: General Market Commentary

Golden Pullbacks, Earnings, and Coming Mergers & Acquisitions

BY: GERARDO DEL REAL

The votes are being counted, which in 2020 is apparently a political issue in America.

We still don’t know who the next president of the United States will be. 

We’ll know soon.

While everyone is fixated on the election coverage, the bond and currency markets is where the real action is.

Bond yields had the largest two day drop on a percentage basis —  ever.  

The currency markets provided fireworks as well and while I continue to believe that sooner or later the dollar has an epic move higher, this isn’t the week for that.

The dollar is now below the 93 level and gold looks like it may be ready to take its next two steps forward.

Last week, I told you the recent consolidation in the gold price and the price of the juniors was an opportunity to add quality names at a discount. 

Several of you emailed, which is always a good sign a bottom is forming. I told you as much last week. 

My exact words were:

I believe that correction is near its end and provides an excellent entry point for newer capital in the space.

It also provides an excellent opportunity to add to the quality names with near-term catalysts independent of a rising gold price, which is exactly how I’ve played this pullback.”

I’m not the only one that used the pullback to buy gold companies on the cheap. 

The producer’s balance sheets have been replenished, which means we’re likely to see an increase in gold mergers and acquisitions (M&A) as reserves need to be replenished. 

Earlier this week, Yamana Gold (NYSE: AUY)(TSX: YRI) announced it was acquiring the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch Gold (TSX: MQR)(OTC: MRQRF) for total consideration of approximately C$200 million, or C$0.63 per Monarch share on a fully diluted basis — a 43% premium to the previous day’s closing price. 

I have an idea of which company in the region is likely to get taken out next. It’s a company subscribers are already up over 60% on.

We’re not buying it anymore — and we sure in the heck aren’t selling it — because the time for that was when no one was looking.

It’s been a challenging month or so for those of you that are newer to the space. 

If you haven’t heeded my advice and used this pullback to add to your positions you need to get that done.

All of Nick Hodge’s premium publications are now available. Mine as well.

There’s money to be made. 

In the coming weeks you can expect the rollout of the premium site for those publications. 

In the meantime, you can find those here. 

Stay safe out there.


Let's get it!

Gerardo Del Real
Editor, Resource Stock Digest

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Resource Stock Digest, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.

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