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In Gold We Trust

May 29, 2021 • 8 tweets • 4 min read • Read on X

We see some incredible opportunities in the gold mining sector in the years ahead.

Our newly published 2021 In Gold We Trust report devotes a chapter – Golden Opportunities in Mining – to this topic: bit.ly/3fpQEeT

This thread summarizes some of its key insights.👇

1/ 2020 saw a great improvement in the financial position of gold and silver miners.

In 2020, producers had their most profitable year ever.

The average gold spot price increased to USD 1,770/oz., but average industry AISC – representing the cost of mining – remained flat.👇

2/ Undervaluations went largely unnoticed as investors focussed on cryptocurrencies, SPACS, Reddit-induced squeezes and FAANG stocks.

We can see this lack of focus in the fact that Dogecoin – a satirical homage to Bitcoin – has a higher mkt cap than some major mining companies.

3/ To us, it is clear: the gold and silver mining industry is in the best shape it has been in in a long time.

The chart depicts the performance of mining stocks (the XAU Index) relative to equity markets (S&P 500), illustrating clearly how cheap mining stocks are.

4/ From a valuation perspective, the gold mining industry has never been better regarding what you get versus what you pay.

Capitalight Research provides a metric for comparing the S&P and gold mining stocks.

It shows that mining stocks have been undervalued since late 2019.

5/ Our analysis clearly shows that companies included in the HUI Gold Bugs Index are trading at the lowest Price-to-Cash Flow and Price-to-Earnings ratio multiples in more than 20 years.

The chart below shows the HUI Price-to-Earnings ratio over time.

6/ Finally, the HUI to gold ratio indicates that gold stocks are trading one standard deviation below the historical mean: yet another indication that gold mining stocks are undervalued.

@RonStoeferle

7/ No matter how one looks at it, using every valuation tool in the toolbox, it is difficult to argue that gold stocks are not inexpensive.

To find out more, check out the full chapter here: bit.ly/3fpQEeT

Thanks for reading— @RonStoeferle & @MarkValek

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In Gold We Trust

@IGWTreport

May 17

The 10 Key Points of the New Gold Playbook:

A thread:

1. The high inverse correlation between US real yields and the gold price is history (for now). Despite the rise in real yields, the rise in the gold price could not be halted.

2. Central banks are a decisive factor in the demand for gold: Demand from these institutions is not very price-sensitive. Central banks are likely to have put a floor under the gold price.

3. The weaponization of fiat money has lasting consequences: The confiscation of Russian reserves and assets of Russian oligarchs in 2022 was a wake-up call for numerous states, as well as wealthy private individuals from the Gulf states, Russia, and China. (Luxury) real estate in London, New York or Vancouver has always been the preferred destination for savings
from emerging markets, but this has changed in 2022.

Read 11 tweets

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Jun 1, 2023

We feature quite a few charts, but our favourite remains the gold/Okteberfest beer ratio.

Gold has not only maintained its beer purchasing power over the last 12 months, the ratio even increased from 121 to 123 Maß Oktoberfestbier, despite the price increases in euros.
1/

We also feature the iPhone/gold ratio. Every year, the latest Iphone is more expensive than the previous year.

But not if you hold gold. The first iPhone sold for 0.92 ounces of gold in 2007. Fifteen years later, only 0.75 ounces of gold are due for the iPhone 14 Pro.
2/

Not only do holders of gold pay less than 15 years ago, but they also get a vastly superior product to that of the past, proving that gold is an excellent store of value.
3/

Read 4 tweets

In Gold We Trust

@IGWTreport

Jun 1, 2023

Introducing The Incrementum Recession Phase Model.

What assets perform well during a recession?

We look at 5 different phases of a recession and the performance of various assets during each phase.
1/

We analyzed eight recessions since 1970. Turns out that gold and mining stocks tend to perform quite well during a recession.
2/

We also look at different leading economic indicators to establish if a recession is imminent. Currently, all of
them are signalling an imminent recession.
3/

Read 4 tweets

In Gold We Trust

@IGWTreport

May 24, 2023

The top 10 facts in the 2023 #IGWT report.
A thread:

1. If the U.S debt ceiling is raised again, it will be the 79th increase since 1960, the 21st since 2000, and the 30th under a Democratic president. Republican Presidents have raised the debt ceiling 49 times.
1/

2. Gold, you are the apple of my eye… in terms of purchasing power! In 2007, the first iPhone cost $599 or the equivalent of 0.92 ounces of gold. Fifteen years later, only 0.75 ounces of gold are due for the iPhone 14 Pro, which cost $1,499 at its launch in September 2022.
2/

3. Despite US equities becoming more undervalued in the last year (Shiller P/E ratio 38.3 in 2021 vs 2022’s figure of 28.3), gold is still historically undervalued compared to US equities. The Gold/S&P 500 ratio of 0.49 is significantly lower than the long term average of 1.66
3/

Read 11 tweets

In Gold We Trust

@IGWTreport

Jan 30, 2023

Gold as International Reserves: A Barbarous Relic No More?

This is the title of a working paper released by the IMF on the 27th of Jan 2023.

We summarized their findings for you below:
1/

In the past, the IMF considered gold to be a "barbarous relic" and advocated for its replacement with a more modern and flexible reserve asset, such as its own Special Drawing Rights (SDRs). However, in recent years, the IMF has changed its stance on gold.
2/

They now recognise the importance of gold in a diversified international reserve portfolio and the organisation now allows its member countries to hold gold as part of their official foreign exchange reserves.
3/

Read 13 tweets

In Gold We Trust

@IGWTreport

Jan 23, 2023

The Terrible Top 5.

We list the top 5 worst cases of hyperinflation in history!

Let the countdown begin!👇
1/

#5 The Greek Hyperinflation of 1941-1944: Greece experienced a severe episode of hyperinflation during the German occupation in World War II. The inflation rate reached an estimated 50% per month, causing widespread poverty and social unrest.

2/

#4 The Zimbabwean Hyperinflation of 2007-2008: Zimbabwe experienced severe hyperinflation in the late 2000s. The inflation rate reached an estimated 79.6b percent per year, causing the country's currency to become worthless and leading to widespread poverty and social unrest.
3/

Read 6 tweets

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