What if FNV, which bottomed and launched first and best to signal the March gold stock rally is signaling a new leg up now as it failed to top out as I had incorrectly projected and has ticked a new high today, is leading again?
Royalty companies are not encumbered by the same inflationary cost burden negatives as miners (MMX was added this morning with that in mind) and with a minor mix of PGMs and Energy, FNV has that diversification to help it out as well.
But it meant something in March when it bottomed, took the sector up with it and then failed to do much more than blip as the sector took a hard pullback later in March. It meant more rally to come. Today with the new recovery high and that 2020 high an all-time high, I do wonder indeed. This is a positive signal as it appears big money is positioning in the perceived safest and highest profile stuff.
I am not buying FNV this time after a great trade off the March low, but I sure as shootin’ am using it as a sector beacon, and thus far I am liking what I see. All due caveats about inflation and gold mining still apply, although KL and its good results would beg to differ and also the inflationary 2003-2008 period would beg to differ. Miners still hold “nothing special” status in this macro backdrop, but that does not mean the bounce may not be a strong one or if 2003-2008 is a blueprint, a very strong one. FWIW.