Gold Breaks Out (Again)

Gold had been trading in a tight band since April. Bouncing back and forth between (roughly speaking) $3,200 and $3,400 per ounce. That trading range ceased to exist as of last week with the precious metal breaking out on the upside again, trading through $3,600 per ounce.

I have written frequently about my concerns regarding dollar printing by the US government. It continues unabated. But, we are not the worst offender here as Europe seems to want to drive their balance sheets off a cliff; in relative terms, when adjusted for the size of their economies, Europe represents the bigger issue.

If you’re concerned about money printing, the two easiest ways to protect yourself are gold and bitcoin. I’ve avoided bitcoin, personally, as I’m not a believer in the long-term value here. That said, it has been the better performer by far over almost any time period since it’s formation.

One time period where it has underperformed is 2025. Could this be the start of a reversal of fortune for gold?

The latest driver for Bitcoin has certainly been the financial arbitrage plays. You buy a shares in a company like Master (MSTR) which then uses the funds to buy Bitcoin. Master’s book value being much lower than the current share price, it supports issuing as many shares as possible for this trade. This in turn creates a large demand for bitcoing.

That trade seems to be winding down. Per Grok, “The premium for MSTR over its book value, as measured by the P/B ratio, has been decreasing significantly in recent years. From a high of 18.25x in November 2024, it dropped to 1.98 by August–September 2025, near a 10-year low. This decline is driven by a massive increase in BVPS (1036.50% from June 2024 to June 2025) outpacing stock price growth, alongside a possible market correction in 2025. The trend is clear for 2024–2025, and historical data suggests the current P/B is unusually low compared to the 13-year median of 4.39.”

Master will continue to issue shares and buy Bitcoin as long as the book value is below the share price. If that changes, however, the trade is off. This would eliminate the largest buyer of Bitcoin in the market.

Meanwhile, there is a massive buyer of gold in the market. For three consecutive years, central banks have bought over 1,000 metric tons of gold annually, marking the most aggressive and sustained gold accumulation since the 1970s. This buying spree is a strategic shift driven by geopolitical tensions, economic uncertainty, and a deliberate diversification away from the US dollar.

In short, you have buyers with basically unlimited firepower purchasing gold to hedge against macro-economic trends. These trends are quite possibly in the early innings of what could be a very long game. They aren’t going away any time soon.

How am I playing gold? It’s a multi-pronged approach.

I own gold outright. This really comes in two forms. I own some physical gold and also the gold ETF GLD. They are going to trade very similarly, and GLD is easier to buy for sure, but the Armageddon play is to have some physical gold in your safe, so there’s that.

The other leg of the strategy is buying gold miners. This is a leveraged play on gold; as the price moves higher, their margins increase as the difference between sales price and cost grows faster (percentage-wise) than the increase in the value of gold.

Gold miners had significantly underperformed physical gold for a long stretch but that trend started to change in 2024. This year has seen the miners do better as the gold bull market gains momentum. I think it will continue for a while.

What miners do you play? In a bull market, the more leveraged (i.e. riskier, early stage) plays stand the chance of the best performance. They also have more execution risk.

I recommend owning more GLD and using miners selectively to add some beta to trade. There are several gold miner ETFs out there. Google can show them to you. On top of that, I own two actual mining stocks

Equinox Gold (EQX) is mid-sized producer that represents a potentially undervalued opportunity as well. They currently produce 500,000 ounces per year and with key projects like the Greenstone and Valentine mines now in operation or ramping up, Equinox aims to double production and generate substantial cash flow in the coming years. This should cause a re-rating as it trades at a lower multiple than other million ounce producers.

On the riskier side, I’ve added some shares of Lion One Metals Limited (TSXV: LIO, LOMLF). Lion One presents an interesting investment opportunity due to its 100% ownership of the fully permitted Tuvatu Alkaline Gold Project in Fiji, which is transitioning from exploration to high-grade gold production. The company has demonstrated significant progress with recent high-grade drill results, including 54.16 g/t gold over 1.9 meters, and is in the process of doubling their mill size while increasing recovery rates. In short, they are about to start generating real cash flow, moving from an exploration company to a producer.

Aeluma (ALMU) will be having their first ever earnings call on Tuesday afternoon at 5pm ET. You can access the call by clicking here. In advance of the call, the company has put out a new slide deck, available here.

Ondas (ONDS) continues to trade higher. We had a call with the company just two short months ago. Since then, the stock has gone from $1.80 to a recent high of over $6.

Driving the strength here is their drone business, which was a very strategic shift for the company a couple years back. They still have their railroad communications equipment division but let’s be honest; drones are by far the sexier part of the business right now.

Has the stock gotten ahead of itself? The market cap is $1.5B and revenues are projected at $25M. Clearly it is expensive.

However, companies in high-growth industries are always expensive. Especially in the early days for an industry. The future is certainly one that has the sky filled with drones, both or commercial and governmental purposes. Ondas is well positioned for that future. Could the stock take a breather from here? Most definitely. And, if it does, that’s likely the chance for those who missed this boat to get on board.