Geopolitical Events - Potential Escalation Appears ImminentIn my view, the mutlitude of geopolitical events currently in play and those perculating on the back burner are going to continue to support the recent rise in the price of gold and very likely drive it higher yet in 2024 and 2025. The ongoing war between Russia and Ukraine doesn't appear to be nearing an end anytime soon, especially with new funding about to be approved by US Congress. The situation in the Middle East is a powder keg and China is rapidly gearing up their military and navy and will likely try to take advantage of the US forces being spread thin to take a run at Taiwan (sooner than the expected 2027 timeline). The unstable US political landscape and a US election later this year only adds more uncertainty to the US' historical role of being the democratic leader of the free world. US inflation is still heated and US debt levels are ramping up at about $168 billion every 60 days.
So in light of all this, where do you think the price of gold is going? Well go have a look at a 3 year chart of Newmont and you will notice that despite Newmont's recent share price run up, it is still a lot closer to its 3 year lows than its 3 year highs and with $1,000 US plus margins and estimated 2024 production of 6.9 million ounces, it won't take much good news to drive their share price much higher than it is today.
What I find interesting right now is that for a $62B CAD Market Cap, there are no real large blocks of shares on the Newmont (NGT) buy or sell side these past few days and that tells me that investors (including the market makers) are in a wait and see mode awaiting next weeks earnings announcement. I think what most Newmont investors are missing right now is that although the Q1 results are expected to come in at about .36 US per share, the Q4 earnings are project to be .72 US cents per share (yes double Q1 earnings). Yet it seems Newmont investors aren't all that convinced that Newmont can get a handle on its costs and debt. But that will change shortly.
Unfortunately for those who are sitting on the sidelines awaiting next week's results, if there is any positive news whatsoever (and I believe there will be), I expect we will see another sharp increase in the price of Newmont shares, likely back to first re-test its recent high of $56.72 and then to $60 shortly thereafter. Newmont shares are currently trading at a 24% discount to fair value. I've got my shares already because even if Newmont stays flat or goes a bit lower from here, I'm quite certain by year end, Newmont's current $54 CAD / $39 US share price is going to look like a Walmart clearance sale. Are you Ready?
My opinion only, please DYODD.
HB77
China on brink of Taiwan invasion as NATO braces for World War 3 (msn.com)
Israeli sources to Post: 'An eye for an eye'; not clear why Pentagon leaked info on attack (msn.com) Newmont Stock: Redemption Has Finally Arrived (NYSE:NEM) | Seeking Alpha