Regarding Powell going from hawk to dove during that window where Biden was, or Harris, I should say, was trying to win the election and then back to hawk. Now that Trump has won. It’s pretty egregious what they did. Anyway, and then the main discussion, the premium discussion, will be the RBC Gold Equity Analysis. A founder shared that with us, and we’re going to run through it and give you a quick take on the importance of it. All right. Thank you very much to that founder, who shall remain anonymous. Starting with the markets themselves, we have the 10-year yields.

10-year yields are down $4,465. The dollar is $109.15, not $14. Dollar strength is, in large part, continuing concern about Great Britain, which is an extension of Great Britain a couple years ago, which is an extension of everything that’s going on in Europe to begin with, and yada, yada, yada. It’s a shit show financially as the world deleverages. S&P 500 is $59.05, down five. The VIX is $17.69, down 14. Gold is $26.73, up 12 and change. Silver is $30.37, up 30. These two markets are on their highs. Copper, $4.28, up doing pretty well. Up over a percent at five cents, up five cents and change.

WTI, $73.87, up 41. Natural gas, $3.64, down six Bitcoin, down 1,793. $3,300. News is the Department of Justice is going to be selling more Belt and Road Bitcoin into the market. This is bearish to get the market down, in my opinion, so BlackRock can buy more. This is kind of like spoofing gold lower, but the government is doing it. Ethereum, $32.91, marked down in sympathy. Palladium, $9.27. Platinum, $9.56, both up between $0.50 and $4 depending. Soybean, corn and wheat, down three, up one, down one, $9.86, $1.45 and change and $5.40 spot 70. Okay, so there’s our topics as previously mentioned.

Here’s the front page. China Central Bank adds over 11 tons to gold reserves in December. You know, that’s twice as much as they added in November, number one. Number two, in November, they bought 10 times more over the counter than they did publicly. So if they bought 11 tons, if that ratio holds true, they’re going to buy 111 tons over the counter or they already have. And that would very nicely explain why gold has not crapped out and why silver will probably go higher. At least that’s my contention. Monitoring dollar dominance, that’s a report done by the Atlantic Council, which is very pro-dollar, pro-American empire culturally.

And so they would be pro-bullish, they’d be pro-dollar. But the report we used, we cited it for, we used it for something we were writing up on dollar, de-dollarization. And there’s a lot of very, it’s a very good report, despite their bias, because at least it tells you what every country is going to do in nice, neat form. Goldman’s price, gold price forecast, what to watch. All right, here we go. Global precious metals, equity outlook, same old story. That title there says it all, but the report is not boring. Our view, RBC’s very professional report, it’s about 70 or 80, 75 to 80 slides.

All very good slides says what the slide’s going to tell you, and then the slide tells you. It’s not like obtuse. Our view, shifting monetary policy and election volatility presented a turbulent finale for gold prices in 2024. Nonetheless, we forecast positive gold performance to emerge again in 2025 as demand remains supported by central banks and investment. We maintain a positive view on the outlook for the gold equity sector, although this is now anchored by our valuation views rather than our commodity outlook previously. Gold is at a good price. It doesn’t have to go up for them to go up.

It has to do with they think that these miners are by because now this year, now they believe mining miners are really undervalued on a basis of cash flow. We’ll get into that. 2024 was a solid year for gold, despite the turbulent final. And I’m not going to read all that, but let’s just put it this way. The bottom lines there are. Their target for gold is here. It’s this paragraph, actually, their target for gold is 2823 for the year, modest increase. And that’s predicated on their previous rate cuts and error for the U.S. If there are no more rate cuts in 2025, that’s where they’re working for.

And one, maybe two, if there are no more rate cuts in 2025, they believe that the price will be 2600. So that’s pretty damn good, in my opinion, because if the Fed doesn’t cut at all, 2600 is where we are right now. All right. Here we go. Now we get into the gold equity part, which is the tough discussion, but not without not without insight. Gold equities had a challenging 2024 versus gold. We see valuation is supportive today as opposed to commodity price. Despite gold’s positive performance in 2024, gold equities increased by a lackluster 9 percent underperforming gold as equities were challenged by multiple compression and increasing costs versus expectations.

If you’re a gold miner owner, you know what that means. And, you know, costs are going up, even when energy costs aren’t going up. Today, we think equity valuation is attractive with large, it’s our bold, with large cap gold producers at spot trading at 7 percent of free cash flow to expected value, 4.9 times EBITDA and one time price to net asset value of 8 percent. We view valuation and the sector’s growing emphasis on return of capital as a potential opportunity to kickstart returns. So and they go through it. What’s return of capital if you’re not that familiar, right? Higher dividends, right? Share buybacks or just prices going up.

I think you’re going to see the bigger you’re going to see, I believe, pursuant to their concepts, you’re going to see the bigger miners throw off bigger dividends. I mean, look, for the last last 15 years, gold mine since the 90s, gold miners have been poorly run for one reason or another. And then the financial aspect has been impoverishing them. And then the cost aspect over the last two years has been keeping them down. But all the while this is going, the equity world has been dissuading investment in them by giving them something flashier to look at.

And with the return of dividends and the excess cash flow, well, they’re just going to pay you out. I might be buying some of these for for dividend purposes. I think dividends are going to go up for these guys, even if price goes down and energy costs will probably be factored. Anyway, we’ll see. And that’s there. And that’s a summary of their thesis, I believe. Our top ideas include this is a separate report. We also have that. Our top ideas include Agnico Eagle, Anglo Gold Ashanti, Goldfields, Cisco Gold, Royalty, G Mining Ventures, Torex Gold, Core Mining, Adriatic Metals, Hochschild Mining, I’m not sure I’m saying that right, West Gold Resources and Bellevue Gold.

All right. Let’s take a look at some of the let’s take a look at some of the slides. First of all, here’s your table of contents. Key takeaways and gold price outlook. Twenty twenty four year review. Very good macroeconomic and gold investment themes. Very good. But if you’re a golf expert, nothing new there, but there’s some nice charts. Gold equity themes is what interested us the most. And we gave you a little idea of what we’re looking at there. Gold supply demand overview. We haven’t looked at that yet, but nevertheless, that’s included. They have twenty twenty pages per.

Here’s a couple of slides, some slides you think that I wish they were bigger. All right. So here we go. This is their gold price target. The gold price target is the gray area is their range of inaccuracy, you know. And so the light blue line going up, that’s their twenty thirty three. And then the line down here, that’s their margin of error. Next slide. A little bigger. This is for me as a bullion person. I pay attention to this. High demand in China supported gold gains in the first half and premiums have reemerged as of year end, consistent with China buying more gold.

When the retail buys gold in China, that’s because they’ve been told to by the government. That’s my opinion. Next, leverage to gold, cash flow generation execution were key drivers of individual equity success. So what happened last year, those companies that did do well was based on leverage to gold, cash flow generation and execution. And when you put those things together, leverage to gold could be financial leverage. But no, with cash flow generation and execution, that means operating leverage. Right. You’ve got to be able to scale and you’ve got to be well run. And hopefully you haven’t over hedged your book.

So there’s some really, you know, each company’s at the bottom there showing where they rank in the pecking order. Gold producers are generating windfall free cash flow today. And we forecast this to continue at RBC’s gold deck. That’s it. That’s the basis for the return of capital. Right. Or maybe they’ll buy it. Maybe they’ll maybe they’ll vertically consolidate. But that’s not at the senior level. That’s the junior level. High FCF has enabled deleveraging. That’s one. That’s music to my ears as a fundamental analyst. They don’t need the money, thereby enabling greater return of capital. And they’re going to start returning that capital.

Maybe there’ll be some capex if they have some new findings. But why spend money on digging for gold when there’s someone else digging for it out there and you just buy them if you need to increase your supply. Gold producer costs rise over time, although we forecast lower inflation in 2025 versus recent years. And plus, you know, I know that there’s been a lot of I didn’t report a write up on this. There’s been a lot of increasing bureaucratic bullshit costs, you know, associated with associated with. I don’t know. I mean, DEI is not the right word for it, but, you know, environmental, environmental and ecological concerns that were above and beyond necessary.

Those are going to back off with Trump in office. And as long as oil doesn’t get too expensive, well, you’re set. You’re the table set for the gap to close between miners and bullion. Twenty twenty twenty four review. High returns were achieved with an average entry year price correction post U.S. elections. OK, this is something I’m looking at now. Basically, the bars are what the return was at the the dots below. That’s how low it can go. This is a pictorial graph of a sharp and or sortino ratio. And I love seeing those and I’ll show you why I think I have that chart here.

And this is why I have been saying for the last two years that the I’ve been saying that the roof is probably higher. But the floor in gold has been raised and the floor in gold is represented by those red lines. So between 2000 and 2000 and say 13, the floor was there with two rectangles underneath two big outliers. So no matter how high gold went, that was the floor. Now, after 2014, the the floor is being raised. There’s less production going into the market, hitting the bid. There’s less gold being hedged because they’re buying it directly from producers.

They’re buying Dore bars. They’re buying, you know, concentrate in Silver’s terms. And so the floor has been raised. I like this a lot. It’s like saying, hey, how much did you make last year? Well, my fund returned 18 percent. OK, well, what was your worst day? Well, I lost 25 percent on Monday. Well, that’s not good. How much did you make last year? Well, I made 18 percent. What was your worst drawdown day? Three percent. And that’s what you want to hear in a valid market to attract longstanding money. Anyway, that’s my thing. Back to miners.

Twenty twenty four review gold equity beta to gold prices has declined following weaker gold equity performance. There you go. I mean, that’s that’s the story of the last, you know, last two years. Right. Is that all the charts? I think that’s all the charts that I’m showing. There are 70 of them. Very good. We did that. We did that. Here we go. Data on deck unemployment rate. Oh, the the the Fed. Yesterday’s Fed minutes came out. And the reason, as pointed out by zero, why these were important is because these were the Fed minutes where the discussion about inflation versus potential recession were coinciding with the election coming up.

So remember, two percent, two percent, two percent were worried about inflation. And then at this meeting, the meeting after Powell had cut up, all the people, all the other members, board members, were really pushing back, worried about inflation. And well, this is where you can see that the flip flop happened. So Powell’s worried about inflation. September 18th comes and he says, you know, I think I’m going to cut it 75 basis points. And then in the next meeting, there’s all this talk about inflation again. It’s almost like putting your tin foil hat on here. It’s almost like they all wanted to go on the record as being worried about inflation.

Now, after cutting it, 75 basis points. And this sounds paranoid. But when I give it in the context of something that zero has noted, is that is that they’re actually they actually talk in the meeting minutes about. Trump’s policies will be inflationary. Meanwhile, they lived through inflationary policies and did dick about it. Right. And then they lowered in the midst of those inflationary policies during the election cycle. I’m not I don’t hate power yet, but I’m getting there. You know, I’m getting there. And, you know, he’s not mushroom head yelling, but they’re very ideologically driven and it’s scary.

OK, so unemployment rate on Friday. That’s it. That’s the that’s the pelvic. Right. So premium global precious metals, equity outlook, same old story and global precious metals, equity outlook in this forecast, estimate changes, lots of grids. This is what they do best. And it’s the kind of coverage you want to see. All right. So quick look at the markets. Oh, silver. I wanted to talk about silver. I wanted to talk about silver in this context. Yesterday, I noticed these three weeks. And they’re very compelling. You look at them and you say, oh, the markets, a normal technician would say that’s bearish.

Right. Right. A bull would say, oh, it’s being manipulated. But here’s here’s the reality. Here’s the reality check for everyone. Right. This is a market that’s capped because someone is selling it. Who’s selling it? Well, somebody who wanted to sell it here didn’t get enough done or or someone who wants to buy it. Now, if you’re running a market maker, I’ll go speaking for personal experience. You’re buying one and offering 500 buying one and offering 500. You ladder it up, but you keep a lid on it because no one really cares about silver relative to gold.

And, you know, they’re not going to bully it. And then you when you accumulate as much as you can, then you let it breathe. Now, I would expect I would have expected this market to come in above the wick to be bullish, working its way up in the wick. As we open as we come to the open is a little concerning. So, for example, we’re in the we’re in the we’re in the fix, right? We’re basically in the silver and gold fits or what used to be the silver and gold fix out of London. So the market’s not getting hit right now.

I want to be bullish basically above this above these three weeks. You’re long below these three weeks. You’re short. Be aware that the market could spike higher and then close back into these three weeks. Then you want to look out in the mean. That’s a reverse fish up. In the meantime, if this is where the selling is, it’s off to the races above here. It’s off to the races. We’ll say I hope I’m right. I certainly my position reflects that I’m Vince. Have a great day. Well, thanks for watching this morning’s markets and metals with Vince.

Lancy, I sure hope you enjoyed the show and that it was a great start to your day. So thanks for being here. And before you wrap up, would also like to thank Fortuna Mining, who kindly brought us today’s show and twenty twenty four. Really a great year for Fortuna because they had a lot of progress. Now that they’re mine at Seguila has been fully online in the fourth quarter. They announced that their share repurchase program had repurchase six point four million shares. They also had drill results where they extended mineralization at their kingfisher deposit at that Seguila mine.

They also had a mineral reserve and resource update that they put out on December 10th. And of course, this was following record attributable earnings of fifty point five million dollars in the third quarter, which leaves them as a company that has new mines coming online and an active exploration budget, as well as the elevated gold price still well over twenty six hundred dollars. So a great twenty twenty four for Fortuna and a lot to look forward to in twenty twenty five, especially as they have costs coming down as their leach pad expansion program at their Lynn Darrow mine is now nearing completion.

So definitely a company that you will want to be aware of this year. And congratulations to Fortuna on their success. And thank you for watching. And we will see you again tomorrow. Please note that this video is not intended as legal license financial trading advice and is to be used for informational purposes only. Please contact your financial advisor before making any decisions. And thanks for watching. Thank you. [tr:trw].

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