first majestic silver

Gold Stocks Versus Gold: It's Rocket Time

President of Graceland Investment Management
June 2, 2020

A year ago, gold stock investors had to choose their stocks carefully.  In contrast, now it’s hard to find a gold stock that isn’t roaring higher!

The awesome GDX breakout chart.

Momentum-oriented rallies and major breakouts tend to occur with oscillators at or near overbought levels.  That’s what’s happening right now.  Also, price reactions tend to be brief and are great buying opportunities.

When ETFs like GDX, GDXJ, SIL, and SILJ stage major breakouts, hundreds of off-the-radar miners stage mindboggling rallies.

For junior miners, rather than the exception to the rule, “ten bagger” gains quickly become the norm.

ETF and option traders can expect to get in on major runs with limited drawdowns.

My swing trade service has caught all three of the major moves in 2019 and 2020.  Drawdowns are tightly controlled, and the great news is that we may be at the dawn of another mighty blast to the upside for the ETFs and the miners!

In 2008, gold hit about $1000 and GDX hit $53.  Given the fabulous job miners have done in cutting costs after increasing them from 2008-2012, I believe a “normalization” price for GDX would be about $90.

Gold is up about 70% from the 2008 high, and a 70% move above the 2008 high for GDX would put it about $90.  The bottom line:

If the Fed drops support for the US stock market “poster boy”, and I think it will do that in 2021, institutional money will pour into gold stocks, making my $90 normalization price for GDX likely to happen… even if gold doesn’t rise above $1800.

The stunning HUI versus gold chart.

In my professional opinion, the mining stock dilution and general sloppiness in management actually began in 2004, and that year marked the peak in the HUI’s rise against gold.

Given the lean and mean management at many mining companies now, which is comparable to the 2002-2004 period, GDX could conceivably rise far beyond my $50 and $90 targets, to many hundreds of dollars per share.

Again, that’s with the assumption that gold trades no higher than the $1800 level.  For some insight on where gold might actually trade. 

If gold trades near my $3000 target price while the directors of the gold stocks continue to run a tight ship, the sky is the limit for senior miners.  I believe many juniors would quickly move into “hundred bagger” mode.

I don’t engage in price chasing in the market.  In October 2010 I issued a massive “loss of sanity” call for investors racing to buy gold stocks, while company managers ran shoddy operations at best, and pillaged at worst.

Buying a major breakout from the base patterns that exist on gold stocks now, while the US empire sinks into a permanently setting sun…

Somehow that just doesn’t feel like a price chase, especially given the spectacular shareholder-oriented decisions being made at hundreds of mining companies.

It’s not a price chase, and the time is now for new investors in the gold market to take buy-side action!

This is likely the most important chart in the juniors market, the CDNX index.  I’ve highlighted what could be my first “green light” signal in two years. 

I believe this buy signal will be the most important since 2004.  A Friday close over 600 “seals the green light deal”.  I don’t think it happens this week, but it appears to be imminent.

GDXJ is called a junior miners ETF, but most component stocks are intermediate producers, and there are even some seniors in it.  In contrast, the CDNX is a true juniors index that includes hundreds of small but great companies.

A CDNX ETF was attempted years ago, but there apparently wasn’t enough interest and it failed.  Maybe a new one is tried and finds success, but for now, even senior mine stock investors should take note of the CDNX price action. 

That’s because the CDNX is a key indicator for overall heath of the gold sector, and for imminent upside price action of most of the world’s miners… junior, intermediate, and senior!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “Juniors To Pluto” report.  I highlight key junior miners, both silver and gold, trading under $2/share that seem ready for ten bagger action on a CDNX breakout!  I include key tactics for action on each stock. 

Note: We are privacy oriented.  We accept cheques, credit card, and if needed, PayPal.

Written between 4am-7am.  5-6 issues per week.  Emailed at aprox 9am daily.  


[email protected]  

[email protected] 

[email protected]  

Rate Sheet (us funds):

Lifetime: $999

2yr:  $299     (over 500 issues)

1yr:  $199     (over 250 issues)

6 mths: $129 (over 125 issues)

To pay by credit card/paypal, please click this link:

To pay by cheque, make cheque payable to “Stewart Thomson”

Mail to:

Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:  

Are You Prepared?


Stewart Thomson is president of Graceland Investment Management (Cayman) Ltd. Stewart was a very good English literature student, which helped him develop a unique way of communicating his investment ideas.  He developed the “PGEN”, which is a unique capital allocation program. It is designed to allow investors of any size to mimic the action of the banks.  Stewart owns GU Trader, which is a unique gold futures/ETF trading service, which closes out all trades by 5pm each day. High net worth individuals around the world follow Stewart on a daily basis.  Website:

10 karat gold is 41.7% pure gold.
Top 5 Best Gold IRA Companies

Gold Eagle twitter                Like Gold Eagle on Facebook