Member Info for dictumdedicto

I’m always suspicious of significant moves on AIM, up or down. On the face of it the price moving down suggests the volume is on the selling side. However, I’m also aware that, to quote an ex AIM CEO a few years ago, that there are ‘methods of moving prices that allow a large investor a way in’. I’ve no evidence, at least not yet, to come to a conclusion that this is one of those occasions, or whether it’s simply traders taking a bit of profit. Price moves are probably the only way we will know which view to take. Even then it’s a guess. In the meantime I’m taking the view that I was looking for 15p by Christmas, so nothing really lost. As Jesse Livermore once intimated, the way to make real money is by doing nothing (vs. trading). So far so good on that front.

I'm getting a sense that the large block buying is relentless, and I just don't see enough selling coming on stream to settle it. It looks like the 5%+ up days are with us for a while yet, albeit we are all going to go through the whole process again at 20p. In other words, should I wait for 25p, 35p, 50p, or just sit it out until dividends start to flow? In all honesty it's only at that point that we get a valuation that's based on what the company can generate, rather than what it 'could' generate...

I'm holding tight.

My view on it.

Whoever picked up 6m shares today would almost certainly have bought the same at 15p. But therein lies the problem. The price had been moving up too quickly costing more money than necessary. They wanted the shares but did not need to buy them instantly, and it was probably the case that more than a few momentum traders had moved in, reducing liquidity and availability. A move might have been to sit tight for a day, or maybe only a few hours. Let the buy momentum switch to sell momentum; let the switch start bringing the price down by stoking the fear trade. There was no need to sell. All that was needed was to appear to have stopped buying. Et voila. Our market makers started slicing a little bit off the price. Upward movement has stalled, allowing a more measured purchase at a price a penny below what it would have been had the 6m trade taken place last Friday rather than today.

I'm sure I've seen this movie before.

In the meantime, those selling at 13p, 14p + have been replaced by those large tranche operators, buying in the millions. And it's pretty obvious that they will want a chunky return on their 14p investments. And I doubt that will be a penny or two.

Whether we will see a repeat of today, tomorrow, is anyone's guess, but I can't help thinking that the time between today's slight drop and a resumption of steady increases will not be far away. I'm not expecting, or hoping, for 10% up days; small but steady increases are much preferred.

I think it will probably close at 14p. It's been wild the last few days. My last expectation was 15p by Christmas which has obviously been blow out of the water. While a re-rate was needed its speed had surprised me.

There are obviously some larger buyers at the moment, and it has crossed my mind that there may be some stakebuilding taking place. After all Calibre was acquired a few weeks ago; why not MTL? It's probably low on the list of outcomes at the moment, but I still don't feel I can entirely can't dismiss it. Whoever has been loading up, it will become clear in due course.

I was tempted to sell a few today but can't help the feeling that MTL has a lot further to go. The SP may have got a bit ahead of itself recently but I also think that a billion plus marcap is coming. Without any requirement for an equity raise that means a far higher SP than today. Again, I'm sticking.

Although I do hold some gold I go for more of a balanced portfolio approach these days. Having said that, the two speculative shares I have, MTL and RKH, have had a good run this year and have distorted everything. The problem is that over the next 18 months I think they both have a long way to go so I'm staying put. Suggesting I'm a gold bug is like suggesting I'm an oil bug because I have a full tank of central heating oil.

As for central banks replacing US debt with gold, I know that China has bought over 16 tons of gold this year, as of June 2025. Russia is a war economy, and otherwise would buy more gold. Still, with around $220b of gold in its vaults it remains the world's 5th largest holder. Western central banks will still pivot towards US debt, until the time they can't; non-Western central banks have already moved on.

It's true that there is no direct evidence of bond vigilantes circling, but then again they don't give a lot of warning. It just happens - it did not take long for the markets to react after the Liz Truss episode. So long as people are happy seeing the US spend 40% more per year than it actually generates then all will be well. Unfortunately, I'm in the camp that thinks we a moving closer to that damascene moment when bond holders start asking for a lot more return for the risks they are taking. Sure, the US will not default, but the purchasing power of what they eventually get back will be a lot lower than they originally expected. I think the big wake-up is coming. Could be this year, next, or some time in the next few years, but I don't think it will be that long. It will probably be debt levels that catalyse the moment rather than a specific timeline.

I'm admittedly guessing on the December PoG outurn at $3850. No one can say for sure what it will be but I reckon the fundamentals will continue to push the price up rather than drag it down; though I won't lose a lot of sleep if it's still in the $3200 - $3500 zone. As for MTL, I thought that we would slowly move towards 10p over the next few months. I've been wrong on that one. It now looks like 15p by the year end is quite doable.

My reasons:

1. The US debt is heading for $40t, and pretty quickly. The bond vigilantes are circling and in my view it's only a matter of time before they sweep in. This will likely push up US bond yields and put further pressure on the USD, while reducing demand for US debt. Time is limited for how long the US can continue with $2t annual deficits. It already spends $7t while the tax take is $5t, and interest payments on existing debt is 23% of that tax take. And don't forget something like 30% of US debt is due to be rolled over from low coupon rates to current levels.

2. Virtually all non-Western banks have been buying gold. I can't see anything that would persuade them to get back into U.S. treasuries. Sanctions on Russia (freezing assets) has had a psychological effect on all central banks.

3. Gold supplies continue to be constrained. Recovery rates are in structural decline. Nothing new here but it acts as a backdrop. Mining permissions across the commodity spectrum is now forecast to average 28 years from inception of a potential mine to production. In other words supply issues are likely to be exacerbated in the future.

4. General investor demand remains healthy, notwithstanding the occasional retrenchment. The hot money trades on immediate technicals and on a derivative basis, and not in the physical asset; PoG will always go up and down on a short term basis so long as non-physical trading dominates.

5. In the short term seasonality plays a role in PM pricing (e.g. India\China gold buying habits). The summer months have always been low.

Thus, in my view we are in the slow months, hence the pullback. However, a combination of structural issues and buyers returning later in the year will push prices up. And I've not even mentioned geopolitical facts which can suddenly appear at any time.

For the sake of a number I'm crossing my fingers on $3850 by year end. I'm guessing like the banks, although I do see the arguments helping the price move.

From what I can see most banks are in the $3700 - $4000 range, with the odd one going for $4500.

https://goldwire.io/4500-an-ounce-banks-revise-gold-price-targets/

I should say that these targets are regularly revised. My own instinct is $3800 - $4000. I don’t see the current pullback as anything more than a combo of technical and summer doldrums.

Apparently, the line is ‘Goldman On Gold: Tactical Downside Protection Before Structural Upside’. I’ll see if I can get more detail.

At least according to Goldman Sachs’s, JP Morgan and UBS.

Now that would make Q4 interesting…

I'm inclined to agree. It's starting to look like the missile attack was telegraphed to the affected parties beforehand. 'A great big nothingburger' as someone once said. I also think that Trump probably authorised release of the SPR to manage prices. Unfortunately, the GPS jamming currently taking place in the strait will likely push up ship insurance. In a nutshell markets have seen through the theatre of it, despite the excitement in some media sources. Oil is down on the day and gold's rise is not outside of a normal day's trading range.

So long as Trump writes it off as missile target practice we should see normal service resume (i.e. Israel vs. Iran but excluding the rest of us).

So far the market reaction has been muted to say the least. It feels like we are on a knife edge waiting to see what Iran does next. I doubt it will take much for chaos to ensue, but at the moment investors seem to want to sit on their hands (as am I). Nonetheless, if I was buying it would be gold and oil. We are all waiting for Iran to make a move.

I’m guessing China is leaning on Iran to leave Hormuz alone. Markets are sanguine about the situation so probably don’t think it will happen. Nonetheless, it will only take a single trigger to start some chaotic trading. Everything feels like it’s on a knife edge.

Oil and gold could be the only (relatively) safe places tomorrow. I'm expecting high volatility across the board as investors resort to cash and safe havens. As a producer MTL may be safer than most. It's a difficult call. Whatever the case I'm going to ride the turbulence rather than panic. Who knows, we may even see it benefit from what is potentially a period of chaotic uncertainty.

Oil and gold are likely to go up when the markets open later tonight. Hormuz transits 20% of the world's oil which is not exactly marginal. The problem is a lot of it goes to China, who may well veto the action tomorrow. Quite honestly what is of greater concern is that a rogue state like N. Korea 'gift' a nuclear weapon, or that Iran resorts to a dirty bomb. Neither option takes us down a road down anywhere near peace. I'm thinking Pandora and the box at the moment...

If, probably when, oil increases in price tonight/tomorrow it could blast through $100 very quickly. In which case the whole oil sector lights up. Saudi/OPEC may talk about turning the taps on but there is no way that 20% of global oil can be replaced very quickly. Markets will be all over the place tomorrow.

Between 30% and 40% of U.S. treasuries are rolling over in the next 18 months. The problem is that these were marketed at coupon rates of 2 - 2.5%. The ten year is already at 4.5%. My guess is that this avalanche of debt will push yields beyond 5%, possibly up the 7 - 8% area. In essence this is a slow burn crisis in the making, and with the BBB the U.S. seems incapable of reducing debt. And all this is happening just at the time MTL is shifting into gold production mode with a new mine. The USD will take a hit over the next couple of years, with obvious implications for the PoG. The only question you need to ask yourself is how much gold you should hold as a % of your portfolio. 100% is too much, but the days of 10% max seems far too low given the tailwinds for all things gold.

Thanks for that Crofty. You saved me the trouble.

Today's news on the OM situation is pretty transient. As of tomorrow it's irrelevant to anything, other than the insurance payout. Indeed, I would expect an uptick when RKH announce receipt of the cash, which I fully expect announced via RNS. What we've probably seen is a whole bunch of stop losses triggered as the MMs tried to figure out where to place the SP. Sales were likely amplified by nervous sellers and day traders, both of whom may well reconsider the situation as the SP shows signs of life again - possibly even before the end of today.

The real news is the release of the independent report pretty much lost in the noise of the OM news. And on the back of that the FID announcement which is the real game changer. The FID is probably not June or July, which will impact on the fast buck traders, but it could come any time after that. That's what I'm waiting for, and that's why I've just watched the SP bounce around rather than bailing out.

It makes us all feel better watching the SP go up, but if you are not ready to sell and are waiting for the bigger payday why get too excited. Barring some sort of major natural disaster, conflict or political idiocy (probably the biggest risk), much of the bad news is already behind us. Who knows, maybe three months from now we will be laughing about how immaterial the who OM story actually was.

Still holding strong.

Trump has literally just threatened the EU with 50% tariffs from June 1st. Gold up; US bond yields up. A classic example of how much the US is in a bind.

Anyone who thinks in 'gold bubble' terms really needs to build an argument for an increased USD value (vs gold) given the context:

1) U.S. debt heading for $40t already, potentially 50t by the early 2030s. Annual deficits are increasing not falling.

2) U.S. policy is to reduce the value of the USD against other currencies (incl gold).

3) U.S. economy likely heading for stagflation.

I just don't see a case for a higher value USD against gold.

I'm looking for MTL 15p by the end of 2026/early 2027, with most of the increase arriving with newsflow next year. However, while PoG and MTL don't seem to correlate as much as you might expect (likely due to no divis and cash directed at mine development), I do think a $4000 price could help pull MTL close to 10p later this year. It's a guess rather than a probability though I don't think it's beyond the realms of possibility.

My take is that there is a slightly greater than 50% chance that gold in USD will hit $4000 in the last quarter of 2025. If it does $6000 is a fairly modest 'increase' by 2029.

Many sovereign bond yields have been rising, reflecting the increasingly nervous U.S. market. The U.S., with its $2t + annual deficits is heading for $40t over the next couple of years (or less). Investors are getting jumpy. This is not cyclical, as some like to think, but structural. The U.S. is in a hole. It's simply incapable of spending less. With the tax take stuck at $5t there isn't much more income to go for. Tariffs are already a failure. Trump broadly dropped them because the bond markets increased yields thus increasing interest payments. He's still looking for a balance but with long end yields above 4% the future doesn't look rosy. Higher yields in these circumstances, unlike the past, will not attract investors away from gold. The yields are increasing because of the risk, the real risk of inflationary default.

Gold will fluctuate with sentiment and news on a day by day, week by week basis. However, if you strip away the noise it's pretty obvious that the value of the USD will fall as debt increases (indeed, encouraged by US policy) and gold will 'go up' accordingly. As you know I see gold as the constant; it's the fiat currencies that fall in value against it.