M&A Wave: The Gold Developer Ready for the Moment

With new supply scarce, major mining companies are paying billions for gold developers. This month’s recommendation fits their target profile and offers a crucial opportunity.

Gold just had its worst quarter since 2013. As we enter July, gold has now risen from its quarter lows to trade near $4,055 an ounce. This is still about 28% below the record of roughly $5,600 it set in late January, but the recent decline was largely due to paper market selling, while demand for physical gold kept rising.

That’s the setup behind this month’s recommendation.

As we detailed in last week’s analysis, the fall came from futures and ETF investors unwinding long positions on an inflation scare. Two things drove that movement, and both have since faded. First, oil jumped in the spring on Middle East tension, energy prices ran more than 23% above a year earlier, and that one input drove over 60% of May’s inflation number. The hot May jobs report added fuel to that fire, pushing the odds of another Fed hike toward 70% and the dollar to a one-year high. Since then, oil has fallen back to near where it traded before the conflict, while the U.S. and Iran peace talks have taken acute supply fears out of the market, and the inflationary fears behind the hike bets have receded.

In other words, the headlines and AI algorithms that sparked the selling have already turned. As we detail in full below, that spells opportunity for a company that has positioned itself properly.

Here’s why.