Outperform Apple, Google And Microsoft

Gold and gold stocks are blasting higher, possibly indicating a belief among those buying that inflation is more of a lasting concern than the Fed’s ability to tame it. The price of the yellow metal — and the equities of a few companies that mine for it — is outperforming tech favorites like Microsoft
MSFT
, Google
GOOG
and Apple
AAPL
.

The precious metals and some related securities just
just
hit new 52-week highs, something the well-known NASDAQ
NDAQ
leaders have been unable to do.

Take a look at the weekly price chart for the SPDR Gold Shares:

The most recent closing high makes it above that early 2022 close even though the metal had spiked higher intraweek. It hasn’t been up to this level since mid-2020 as the world recovered from the initial Covid pandemic of March, 2020.

Note that the 200-week moving average (the red line) is moving upward relentlessly despite the many weekly ups and downs.

Compare the SPDR Gold Shares to the weekly chart of the NASDAQ-100:

This index, home to the big tech and big social media names, is coming off the late 2022 lows but remains well below the late 2021 peak.

Some of the gold mining stocks are displaying unusually strong upward patterns unseen among the Silicon Valley favorites.

Here’s the weekly price chart for Alamos Gold, for example:

Alamos is Toronto-based with a market capitalization of $6.87 billion. The company operates mines in Canada, in the Unites States, in Mexico and in Turkey. Although the past 5 years earnings record is -13.89%, this year’s EPS shows growth of 155%. The mining company has no long-term debt and pays a dividend of 1.06%.

From $3.50 at the March, 2020 low to its current $12.97 is somewhere between a triple and a quadruple, but the main thing is the ability to establish and sustain new highs.

Here’s the weekly chart for Anglogold Ashanti:

This miner is headquartered in Johannesburg, South Africa, has a market capitalization of $11.17 billion and operates in Africa, in North and South America and in Australia. Earnings per share over past 5 years show a gain of 28.70% and over the most recently reported 12-months of -52.30%.

The chart shows how it’s broken above the February, March, 2022 high and the March, 2021 high.

Silver is tending to verify the validity of the upward-ness by climbing above a significant downtrend line — the weekly iShares Silver Trust chart is here:

Not as strong as the gold move to new highs but significant in the way it generally confirms the power of the buying in the precious metals sector.

Here’s the weekly price chart for Hecla Mining
HL
, the leading silver producer in the United States:

Other factors are certainly at work here but the most likely candidate for cause is a belief that rate of inflation is more troubling than many are willing to admit. The Fed’s determination to reduce it to 2% may be tough work — that’s the message these precious metals stocks are sending.