Hello to copiers and followers,
Commodities markets such as oil and gold have fallen from favour as investors took profits and chased returns in AI related stocks.
I don't believe it will be long before investors rotate back into non USA stocks, particularly Chinese technology stocks, gold and oil
The oil market is the most interesting market currently. I believe that the oil market is in an unstable equilibrium. Traders are still pricing in just enough supply based on visible storage levels, but that perception can shift rapidly. Storage could quickly come to be viewed as dangerously low, triggering a sharp repricing.
So far, the Trump administration has successfully talked the oil market down. Traders have learned not to push prices higher, knowing that a single news release — an end to hostilities or a similar de-escalation signal — could send prices plunging 10% or more in a single move. While tactically smart in the short term, this has suppressed the true signal from the market. Economic theory suggests that when volatility has been artificially contained for this long, its eventual release tends to produce dramatic price action. I believe we are close to a major tipping point in oil prices.
On the other side of the ledger, the pullback in gold mining stocks is approaching an attractive buying zone. Many high-quality names are down around 50%, while gold itself has given back nearly 30%. This correction after a strong initial surge carries clear parallels to the epic 1970s bull market. Back then, gold rose from $35 to $190 per ounce in the early years of the decade, then dropped almost 50%. Given that our first leg up in the current cycle was more modest than that 1970s advance, the current 30% pullback is now reaching levels where the risk/reward becomes compelling.
All the major structural drivers supporting gold — ballooning debt, geopolitical conflict, and persistent inflation — have only grown stronger. In the 1970s, after the initial correction down to around $105, the bull market reignited and ultimately took gold to $850 per ounce.
Based on this risk/reward setup, the current pullback looks genuinely attractive. Over the next 6-12 weeks, I plan to add to gold mining positions if attractive opportunities arise. I see no reason to believe this current price decline marks the end of the bull market. Given the powerful fundamentals still firmly in place, this is almost certainly the classic initial dip that follows the first leg higher in major gold bull markets.
I see good reason to be optimistic that excellent buying opportunities will arise over the next 12 weeks and I'm looking to get fully invested during the current pullback. All of the factors favouring major price moves higher in non-USA assets are growing stronger, but markets don't go higher in a straight line and the current dip provides interesting opportunities to catch the next major move higher.
Regards,
Jim... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Given your 2026 stats, you seem too overconfident. What will you do to turn the ship around? June has been disastrous. ... Show More
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