Gold Is Primed To Set A Series Of Record Highs In 2025 That Will Be Very Bullish For The Underloved Gold Stocks

There has never been a better time to bullish on gold stocks. No matter which valuation metric one uses, gold in the ground has never been valued cheaper than it is now. Even cheaper than prior to the 2001 to 2011 gold bull market.

Gold made a series of record highs in 2024, and is set up perfectly to do the same in 2025, yet the gold stocks are being ignored by generalist investors. The best in breed gold miners significantly outperformed gold in 2024, but it is important to note that until around the middle of February, they had been in a multiple year bear market.

Even though Agnico Eagle and Alamos Gold stock performance soundly beat gold’s gains in 2024, they are still only trading like value stocks on Wall Street. Not like companies that are making records in free cash flow. While Wall Street stocks are priced for perfection, the gold stocks aren’t even close to pricing in the current price of gold and certainly not pricing in gold making a new series of record highs in 2025.

Going down the food chain to the higher cost gold miners, they are making serious money at the current price of gold and seeing dramatic improvements to their bottom lines. Yet, they are being priced as if we are still in a gold stock bear market. Sure, it is like the late days of a bear market on the cusp of a better market, but certainly not a gold stock bull market anything like the gold bull market.

The gold mine developers are being priced like explorers leaving a bear market. It is pretty shocking considering how some of the miners are struggling to increase production and replace their old mines with new mines.

Take for example Barrick, they are producing around half of their record highs. They, and other gold miners would love to be producing more gold with gold at record highs. But, they aren’t because they just can’t as they don’t have the projects in their own pipelines to pull it off.

Gold explorers with important discoveries are being priced like they are explorers in a bear market with a project that has a good chance of making a discovery. The gold explorers are the least loved segment of the gold stocks, but due to the miners struggling to increase production and replace their old mines with new mines, and the developers in short supply, they are extremely important now and will be well into the future.

There are big differences between now and the 2001 to 2011 gold market. Back then there were more major gold miners. There were plenty of takeovers which significantly reduced the amount of gold miners so now there are much fewer.

The takeovers back then left the gold mining business with fewer mid-tiers and junior gold miners. This is a significant issue because in the past, companies of this size played a crucial role in being the buyers of development projects and explorers with important discoveries that wouldn’t move the needle for major gold miners. It helped them grow into bigger miners. They also made strategic investments into the developers and explorers that needed funding help and assistance on the technical front.

This time around, there are much fewer gold development projects, which the industry needs in a big way. As mentioned earlier, the gold miners need projects that can help them increase production and replace their old mines with new mines. But, the high-quality development project cupboard is pretty bare.

When it comes to exploration, juniors with important discoveries are also in short supply, there just isn’t enough in the pipeline. Evidence of this issue can not only be seen in the menu of explorers with important discoveries to choose from, one can also see that this has been a long-term issue due to the dearth of high-quality development projects currently in the pipeline.

If one wants to really understand the strength of the gold supply chain, it all starts at the exploration side of the industry. Exploration success leads to projects in the development stages that then become mines. A chain is only as strong as its weakest link and the exploration link in the gold mining supply chain is broken, as are the bigger links.

The process of making an important discovery that then gets developed into a new mine takes several years, a decade or two. Due to the long-term issues mentioned above, means that the entire supply chain is broken and will stay challenged for well over a decade.

This makes for an extremely bullish scenario for the price of gold when considering the demand that is already here and what is coming. A big driver of the demand is due to the Death Spiral of Debt in America and worldwide.

Adding to the problem is that the level of debt is so high, and with the interest rates on the debt, that now just servicing the debt is becoming the straw that will break the debt camel’s back.

Another contributing factor for the strong demand in gold is that the fiat currency system is broken. No matter what fiat currency you compare gold to, the price of gold is at record prices in those currencies, from the US dollar right across the board.

The central bankers in the BRICS nation and others are seeing these issues. Over the past decade or so, the US dollar has dropped in percentage terms (by around 10%) as the world’s reserve currency and in 2024 gold surpassed the Euro to become the second highest reserve currency.

An important bullish indicator for gold, and silver, is that America is already in a stagflationary trend that is likely to get worse. This is happening in other major economies of the world as well. The bond vigilantes didn’t buy into the pitch that the Fed made in their September meeting, when they declared victory over inflation.

They actually went on a buyer’s strike as they have to be worried about the unprecedented supply of debt instruments, plus they also have to be concerned about economic growth being weak and inflation higher. Now it looks like there is around a percent higher inflation than economic growth, even using fictitious government statistics, it is likely much worse than they are reporting.

Stagflation was very bullish for gold and silver in the 1970s and will be again as more folks on Wall Street, the Fed, and financial media, recognize it and start talking about it. If the same methods of calculating economic data were used today as in the 1970s, the stagflation would be clearer to many and much higher than current statistics suggest.

The Wall Street crowd, Fed and financial media aren’t mentioning the word stagflation yet, it is just sitting there like the gorilla in the room. But, I don’t think it will be too much longer before more people start seeing that gorilla is getting scarier.

Both supply and demand sides of gold are extremely bullish. Which is why I see 2025 shaping up to outperform 2024 which was a spectacular year for gold. In 2024 we saw gold go from the lower left of the chart to the top right. Along the way it set multiple new record highs. I’m seeing the same thing happening in 2025 with another series of record highs that takes the price from the lower left of the chart to the upper right.

It is a fantastic time to be a gold bull.

In Closing

When it comes to gold, I see a powerful list of bullish indicators for above ground gold as mentioned earlier. But, where I see the biggest potential gains for investors are in the gold stocks with gold in the ground.

Best in breed gold miners had a great year in 2024 and are ready to do the same in 2025. The fourth quarter of 2024 had the highest average price of gold for the quarter, and future quarters will help them continue being free cash flow machines. They are ideal for investors that want extra torque to the price of gold.

For investors that want to take on more risk and added potential for gains, the gold mine developers with high-quality projects are fantastic opportunities. One of the reasons is that there is a small menu for investors that want to invest in this part of the gold food chain to choose from. Plus, I see their valuations at historically low levels, which makes them coiled springs ready to go much higher.

Investors interested in swinging for the fences, the explorers with important discoveries are the place to be. They also have historically low valuations and really haven’t joined the gold bull market. In 2025, I expect to see more than just outliers getting their dancing shoes on and joining the gold bull market party.

There are tremendous value propositions all along the food chain of the gold mining sector. The generalist investors haven’t joined the bull market yet, but they are likely to start soon.

They are running out of options, the Wall Street stocks have insanely high valuations. The tech stocks even loftier valuations. While our current version of the Dotcom stocks are Bitcoin and other other crypto currencies that are priced like the Dotcom stocks just before they imploded.

The time is now for the gold stock executives to get out on the digital marketing airwaves. They have fantastically bullish stories to tell when it comes to gold and their projects. The generalist investors are on social media sites, and listening to podcasts, and watching videos on YouTube.

Not only has there never been a better time to be bullish on gold and the gold stocks, there has also never been a better time to capture generalist investors' attention using digital marketing tools.

All the best,

Allan Barry Laboucan