I can only repeat and endorse Plungers message. I began to realise what had happened yesterday. The price of gold and silver isn’t being ‘smashed down’ (‘paper’ price has). Not only that, there’s been a massive surge in demand. So much so that all of my usual suppliers have messages like this on their websites…

Does that sound like usual ‘bear market’ behaviour ? Of course not. In my view, Plunger is 100% correct. That being the case, quality names are (temporarily) available at deep discount and should be bought.

Ask yourself this… just how many big companies/organisations are going to be in financial difficulty because of Covid-19 ? How many profit warnings will result ? How many bankrupcies are likely ? Let’s face it, our governments can’t step in and save them all. They might try, but it just isn’t possible. Then ask yourself how much profit a well run gold mining company must be generating at these prices (just go online and check out the ‘all in sustaining cost’ required by some of these companies). The short answer is that they must be doing exceedingly well, and we’ll know more once they release their most recent accounts. This tiny sector will suddenly look very attractive to hedge fund managers and investors. It doesn’t take much of a shift in the allocation of ‘big money’ to set these shares alight.

In summary, my advice is to position into these quality producers (Plunger mentions a few) and not get shaken out of the market. Maybe we could have a discussion about the best names. Plunger mentions Franco Nevada Gold Corp, Newmont, Pan American Silver Corp (I’m not sure who ‘Gold and AU AGI are). I would add Sibanye, Yamana, Sandstorm, Kinross, and maybe (I know many don’t trust them) Barrick.