When the Stars Align (Gold)

When the Stars Align (Gold Stocks)

Don’t look now, but gold is on track today to notch its highest weekly close ever.

Yes, gold topped $3,500 for a nanosecond about a month ago… but the weekly closes are a better indication of the long-term trend. The bid is up $64 this morning to $3,358.

That’s meaningful, especially going into the proverbial “long holiday weekend.”

Gold-mining stocks are rising in sympathy, the HUI index of mining stocks up to 396 as we write. Better yet, the gold stocks are defying a downdraft in the broad stock market. (More about that later.) By next week the HUI might be approaching levels last seen in 2013.

“Are gold-mining stocks set to take off for the foreseeable future due to the gold bull market?” a reader recently wrote our Jim Rickards.

In his weekly Q&A email for Strategic Intelligence readers, Jim answers with a definitive yes.

“The opportunity to purchase high-quality mining assets at such a steep discount to the gold price that is making significant gains is a great investment strategy.

“I believe U.S. equities are due for a rough ride for the remainder of 2025. With gold setting all-time highs, I expect generalist investors to gravitate to the safety of hard assets and the earnings leverage of gold.”

We’ll interrupt Jim long enough to mention that simple “reversion to the mean” suggests gold miners have enormous upside.

The market cap of the 50 biggest gold-mining companies combined is a mere $370 billion — smaller than Procter & Gamble, half the size of Walmart, a pitiful fraction of Nvidia.

In fact, the mining industry now makes up the smallest portion of global stocks ever.

Within the gold-mining sector there are three broad categories — the majors, the midtiers and the juniors.

The juniors are the smallest and most speculative. Also the most potentially lucrative.

Frequently they’re exploring or developing mine sites, not necessarily pulling gold out of the ground. Often when they’re about to reach the production stage, they’ll be bought out by the majors at a huge premium.

“Junior mining stocks have much more upside potential than established, gold-producing mining companies,” says Jim, “because they are priced at extreme discounts relative to their gold resources in the ground.

“Of course, the big guys will take care of themselves. That’s one virtue of being big. But for higher returns, you want plays that are smaller than giants like Barrick or Newmont. Smaller guys often offer more upside when the price of their metal moves.

“And yes, those kinds of companies are out there. But to be totally upfront, I won’t say that there are a lot of great, small companies because it takes quite a bit to make a giant move with even a great company.”

But when the stars do align for a junior miner? The gains can be spectacular.

Jim believes he and his team have identified just such an opportunity. But before recommending it to his Situation Report readers, he had to see the mine site for himself.

“You won’t believe what I just discovered in Nevada,” he tells us. “I wasn’t sure we’d ever see this in our lifetimes. But it’s here — an opportunity to make 50x gains over the next year.”

He’s put his own money into this venture, and he’s inviting you to come along for the ride. Check out his latest presentation at this link.

Tariff Man Is Back

If you thought market-moving tariff headlines were over and done with, Donald Trump begs to differ.

The president went on a tariff tweetstorm this morning. (Yeah, I know, he posts on his own Truth Social site these days. Couldn’t resist the expression.)

First, he threatened 25% tariffs on Apple iPhones sold in the United States unless they’re made in the United States. (Evidently, Apple’s shift out of China toward India isn’t good enough.)

Then he floated the notion of 50% tariffs on imports from the European Union effective June 1 — a week from Sunday — unless trade talks start making progress.

With that, Apple is down 2.6% at last check. And all the major U.S. stock indexes are solidly in the red — the Dow by three-quarters of a percent, the Nasdaq by nearly 1.25% and the S&P 500 by close to 1%.

At 5,787 the S&P is down nearly 3% since Monday.

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Alan Knuckman, our eyes and ears at the Chicago options exchanges, won’t rule out the S&P retreating another 5% to 5,500 in the days ahead.

As noted earlier, gold is rallying hard into the end of the week. Alas, silver’s rally is lagging, up only 22 cents to $33.22. Crude is up 47 cents to $61.67.

Bitcoin nearly crested a record $112,000 overnight but now it’s pulled back to $109,282.

There’s Big Money in Cargo Theft

Headlines you don’t see every day: “Armenian Organized Crime Rings Charged With Stealing $83 Million in Amazon Cargo,” says CNBC.

To be clear, the theft is taking place in the United States.

In these digital pages we’ve chronicled periodic episodes of cargo theft in recent years — for instance, a 15% spike in such incidents between 2021 and 2022. Figures we mentioned last year suggest the theft of merchandise from warehouses reached a 10-year high, according to the Travelers insurance company.

Oftentimes the thieves simply show up with 18-wheelers and phony papers — making off with a literal truckload of household goods and electronics.

But the latest developments take it to a whole new level: This week the feds charged 13 people with an array of counts including not only cargo theft but bank fraud and even attempted murder.

That’s because it seems there are rival Armenian organized crime rings feuding for territory around Los Angeles.

“Among the defendants,” according to the trade site FreightWaves, “are Ara Artuni, 41, of Los Angeles, who is charged with attempted murder in aid of racketeering, and Robert Amiryan, 46, of Hollywood, who is charged with kidnapping…

“Artuni and his organization allegedly targeted e-commerce giant Amazon by enrolling as carriers for the online retailer. Artuni and his men would contract trucking routes with Amazon, and while transporting the goods, diverge from the route and steal all or part of the shipments.”

Amazon believes Artuni’s organization alone made off with more than $83 million in goods.

Other defendants were picked up in South Florida. If convicted on all charges, they could get anywhere between 10 years and life.

A steep penalty, but the thieves must figure it’s worth the risk: CNBC says the number of reported cargo theft incidents grew another 26% between 2023 and 2024, with total losses exceeding $455 million.

When Coffee Gets Political

You think politics has infested every aspect of life in this country? Try ordering a cup of coffee in South Korea these days.

As we chronicled at the time, South Korea’s president Yoon Suk Yeol imposed martial law last December. It lasted all of six hours as parliament met in defiance of his orders and voted to lift the clampdown. Yoon was subsequently impeached and removed from office.

But as you might expect, South Korea’s politics have been topsy-turvy ever since. A new presidential election is coming early next month. And people are expressing their passions in all sorts of ways — even when ordering coffee.

According to the BBC, Starbucks “has seen an increasing number of customers ordering drinks through their app and keying in phrases such as ‘arrest Yoon Suk Yeol’ or ‘[opposition leader] Lee Jae-myung is a spy’ as their nicknames. Starbucks baristas had little choice but to yell out these names once the drinks were ready for collection.”

No more. Starbucks has put the kibosh on the practice. Customers are now banned from invoking the names of the six presidential candidates, the better to “maintain political neutrality during election season,” says a company statement. The ban will be lifted once the election takes place on June 3.

"I think people are being too sensitive,” says one customer interviewed by the Beeb. “What if your real name is the same as a candidate's?"

Others think the rule is “too trivial” even if they understand the rationale. "After [Yoon's impeachment] I don't really talk about politics anymore. It feels like the ideological divide has grown so much that conversations often turn into arguments."

Speaking of politics intruding into every aspect of life…

Mailbag: Politics, Beer

“Dave, here’s my personal 5 cents. We are more and more inundated with politics,” says a reader writing for the first time — “and it would be nice if you could focus on the market, financials and making money.”

In particular, the reader objects to yesterday’s mailbag in which one of our regulars spoke up about Joe Biden’s decrepitude.

“It is completely useless noise and zero added value.

“I enjoy your newsletter, but the politics tick me off, and I think so do many readers versus a minority that has gotten dragged into this polarisation and having the need to express their view.”

Dave responds: I hear ya.

On the other hand, as a mentor told me long ago, “Politics are the problem, and you ignore them at your peril.”

On the other-other hand, he said that at a time when politics weren’t as polarizing as they are now.

I don’t think it’s a bridge too far to suggest Biden’s cancer diagnosis — a condition that can’t possibly be brand-new, as even Democratic-aligned doctors acknowledge — helped fuel the turbulence in the bond market this week.

Yes, it was mostly the result of a weak Treasury auction and the impending passage of Trump’s “big beautiful bill” that doesn’t do a thing to meaningfully cut spending.

But the revelation of yet another Biden health cover-up has to undermine confidence among the holders of U.S. debt that U.S. leaders on either side of the divide can be trusted.

“Love your sense of humor, Emily,” a reader writes in appreciation of Wednesday’s edition.

“Loved the ‘tips, taps and roots’ comment at the end. But it certainly is true. Since I'm celiac, and allergic to most alcohol, it doesn't affect me much. 

“We have a ton of bars and taprooms in Denver and I don't see as many people at the outside venues. 

“5 Bullets are always a great review.”

Dave: Emily appreciates the shout-out — and thank you for your on-the-ground observation of the local economy. I lived in Denver for a grand total of nine months — and a very long time ago — but I still remember it fondly!

Have a good weekend,

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets