Saturday 8th November 2025:

I found this a great listen, I think while Trump is power and he focuses on a weaker USD gold will have a tail wind. Good Aussie miners should spit out plenty of cash till the next US election at a minimum.

I listened to this and was going to ask your thoughts @Bear77 !

The ratio discussions were really interesting. The discussion was very high level in this instance and I intend to look into it deeper.

I like to listen to varying views on why gold should go higher or should fall, however I am very aware that nobody knows and they are all basing their guestimates on various presumptions or factors that may or may not prove to be correct or relevant.

In the case of all of the ratios that Sean Russo seems to be quite obsessed with, I don't waste too much time thinking about those. There have been plenty of times in prior years when silver bulls were calling for a massive silver run on the basis of the Silver-price-to-Gold-price ratio being so much higher than its historical average, but silver and gold have some fundamentally different demand drivers. Gold is unique in that so little of it has any actual use case in terms of it being used to manufacture stuff, like gold plated wires or gold teeth or whatever. Gold is almost entirely held as a store of value however silver has that plus silver is also used in the manufacture of a range of products, as shown below when I asked ChatGPT for the most common uses of silver in 2024:

Silver: Industrial / Technological Uses (~ 59% of total demand) Sprott+2GR Reserve+2

a) Electronics & electrical conductivity

• Silver is the best natural conductor of electricity (and very good at heat conduction). Golden State Mint+2The Silver Institute+2
• It is used in electrical contacts, switches, relays, printed circuit boards (PCBs), membrane switches, RF connectors, antennas, etc. The Silver Institute+2GR Reserve+2
• Because many modern devices (smartphones, computers, IoT devices) require compact, high-efficiency circuitry, silver’s role remains important. GR Reserve+1

b) Solar / Photovoltaic cells

• One of the fastest-growing uses: silver paste is used in PV (photovoltaic) solar cells to create the conductive gridlines that carry the generated electrons. BullionVault+1
• According to industry sources, solar‐related demand for silver reached record‐highs in 2024. The Silver Institute+1

c) Automotive / Electrification

• As vehicles become more electrified (hybrids / EVs) and incorporate more sensors, electronics, charging infrastructure, silver demand rises in the automotive sector. GR Reserve+1
• For example: silver in electrical contacts, in battery management systems, in charging infrastructure, etc.

d) Chemical catalysts

• Silver is used as a catalyst in certain chemical processes: e.g., production of ethylene oxide and formaldehyde (which are precursors for plastics, resins, adhesives) where silver is the active catalyst. Guardian Gold+1
• Even though silver in catalysts often is recycled, the demand remains because of catalyst turn‐over and new installations. Guardian Gold

e) Brazing, soldering, metal joining

• Silver‐bearing alloys are used for brazing and soldering in industrial applications where strong, reliable, corrosion‐resistant joints are required (automotive, aerospace, HVAC, etc). silverhalloffame.com+1

f) Other specialty uses (reflective coatings, mirrors, conductive inks)

• Because silver is extremely reflective and highly conductive, it finds uses in mirrors, coating of glass (e.g., low‐emissivity windows), specialty optics, conductive inks for printed electronics. Golden State Mint+1

So Silver was predominantly (59%) used in industrial or technical areas, in other words in the manufacture of products, last year. Gold was not. And I therefore find it strange that there are people who still believe that the silver/gold price ratio is like an elastic band that can be stretched but will always return to its longer term average. My thoughts are that in that analogy the rubber band has snapped. If the ratio does return to what they consider to be its long term average, I would say that is more random chance than a predetermined certainty. I'm not placing Sean Russo in that camp, but he is clearly into these various ratios, and in the case of gold at this point in time I do believe that the four most dangerous words in investing actually do apply: This time is different.

Gold and crypto currencies are being increasingly embraced by people because they are either losing faith in fiat currencies, particularly the US dollar which the current POTUS seems happy to continue to devalue, or because of its buying power over time, which I guess is the same thing. Sean discussed how people in various Asian countries were often putting all or a good percentage of their investable cash into gold each week or fortnight prior to the Asian financial crisis in 1997, and then many of them cashed out a fair chunk of that gold and switched into other assets whose values had dramatically fallen as a result of that financial crisis. This period we are living through currently is probably analogous to that, in that people are doing much the same thing - accumulating gold because of its track record of not crashing in value when everything else around it is plummeting. Except this time we have most of the world's major central banks doing it as well, and China in particular are clearly replacing their US Dollar/Treasuries reserves with gold, but doing it gradually, a little more every month, but EVERY month. Which is only going to assist in their clear aim of establishing the yuan as a legitimate alternative currency to the US Dollar.

So, yeah, I reckon we have stronger drivers today than we had in gold bull runs of the past, and furthermore the reasons behind today's gold bull run are not going to change any time soon, so the fundamental drivers of people's (and countries' central banks') flight to gold are still in place, and will be for some time.

I keep hearing the assertion that so far there has still been limited participation in terms of gold being embraced across the entire spectrum of investors, and that was alluded to once again in this podcast with Sean Russo. Some assert that once "everybody" is buying gold, that would signal the top and would be a good time to get out, however I tend to think that bull runs can go on for longer than people think, and sometimes for longer than they reasonably should. Sean made similar points at one stage.

It was interesting that Sean mentioned that there's always a catalyst, such a crisis of some sort, that prompts large sharemarket sell-offs or switches from bull to bear markets, and I'm not sure if that extends to gold because gold is really sentiment driven with very few fundamental drivers other than people deciding they want to hold more gold. And what's going to change that? Probably people becoming much more comfortable with the US Dollar and other fiat currencies. And, as I said, I can't see that occurring any time soon. If anything the pace of loss of confidence in the US Dollar is accelerating.

So, in terms of this podcast @Jarrahman I do find such discussions interesting and I usually take some bits of information away from them, but it's more about hearing different perspectives and attributing some value (or not) to those opinions that result from those perspectives. I'm not sure that having all of these ratios at hand is going to make my decision making any easier - as most of it is likely just noise - but it's still good to hear how other people think about this stuff I reckon - just to broaden my own education a little if for no other reason.

@Bear77 this podcast was full on, I had to re-watch sections to try to get my head around it. The idea of a gold 1:1 ratio (currently 11.79) really makes you think. Gold either having to go up currently to $47,300 an ounce or the Dow crashing back to 4000, or more likely somewhere in the middle, which would still make for a massive rise in gold and crash in the markets. That it was 1:1 in 1980, and 5:1 in 2008 demonstrates that it isn't entirely improbable that something could happen. I'm surprised that @Strawman hasn't chimed in with an observation that a certain product is currently sitting about 2:1 above the Dow.

Maybe you could clarify for me, but it seems like he was saying that gold is a buy and likely to appreciate whenever the ratio falls below 16 and tends to pull back whenever it gets to 16. Or did I get that back to front or completely wrong?

I'll have to watch it again to pick up on that @tomsmithidg re- the 16 threshold, I have watched the whole thing twice but I didn't write notes on those ratios because I don't personally think the future is that predictable in terms of, do this if that happens and she'll be apples.

What I took away from it is that with everything he spelled out in terms of those ratios and human behaviour, a healthy pullback as we've just had and then some sideways movement for up to 18 months, possibly as long as two years, would be healthy as part of what he feels is a longer uptrend. He clearly thinks gold is going substantially higher than where it is, but not necessarily in a straight line - i.e. it could have a few mini-falls which will shake out some people and attract others.

I did note some statements that appeared to be a little contradictory such as that gold was at a point a few weeks ago where he expected it to retrace and possibly further than it has, like 15% (it's down around 10% I think), but he still thinks we go sideways or back up from here. Perhaps that's not contradictory - it's just all about different timeframes. The first 10 to 15 minutes makes it clear that he's a gold bull, yet he sold out of his gold ETFs at Easter and put that money into Silver because the Silver:Gold ratio was 100:1. I reckon he's looking to make money trading within what he considers to be a multi-year gold bull market that has some years to run yet. I'm not that confident that I can time things with the same level of confidence myself, so I'd rather maintain my exposure to gold and just move that exposure around as some goldies look overpriced when others look oversold on temporary setbacks or negative sentiment.

For instance, in the past week Ramelius (RMS), which is my largest gold company position - both here and in real life - dropped because of the recent gold price fall and then dropped further on October 28th because people must have realised that their growth plans as outlined in their announcements on the 28th meant that their gold production will actually fall substantially from the 303,000 ounces they sold in FY25 back down to around 195 koz in FY26 (this FY) and around 210 Koz in FY27, followed by around 295 koz in FY28, being a smidge under their FY25 production in two years from now, before some decent growth in FY29 and FY30 as Never Never and Pepper are contributing high grade (low cost) ounces and Rebecca-Roe comes online and ramps up as well, as shown below:

I highlighted the lower production this and next financial years in orange.

So they're going from 300 koz (in FY25) up to over 500 koz (in FY30), but it's a five year plan, and they're going to put all of the Spartan ore through their Mt Magnet Mill - which was widely expected but not confirmed until Oct 28th. Rebecca-Roe will need their own mill however, hence the longer lead time for that gold, shown in gold/brown above from FY29 onwards.

RMS was trading at over $4 share for much of the first half of October, but then closed at $3.18 on October 28th when they released their guidance for this year and the next 5 years. I did top up my RMS positions on that pullback even though I already held plenty. Below is an excerpt from their FY25 results announcement in August:

Anybody who has been following RMS closely knew that there was a production drop-off coming as some of their ore sources ran out of gold, and that was clearly why they acquired Spartan to get their production back up to over 300 koz again, which Spartan's Never Never and Pepper deposits will achieve, but not overnight, and Rebecca-Roe is another source of new high grade ore, however they've pushed back the first gold date for Rebecca-Roe now to focus primarily on getting Never Never and Pepper into production first.

To be honest, I wouldn't be surprised if they sold Rebecca-Roe, but only if they can replace those ounces first through either M&A, new discoveries or extending their existing deposits near Mt Magnet (including in those Spartan tenements) - they are going to get to 500 Koz per annum by FY30 - or FY31 at the latest - but whether that ultimately includes Rebecca-Roe will depend on what happens over the next 2 years I reckon. There could well be further acquisitions and possibly an asset disposal in RMS' future.

Ramelius Resources' Edna May gold mill was placed on care and maintenance (C&M) in mid-April 2025 (this year) hence the drop-off in gold production between FY25 and FY26 - all of those ore sources around Edna May within that red circle have now been effectively mined out.

The focus now is on what they've got within the green oval at Mt Magnet including the Spartan assets (shown on that map as the Dalgaranga gold project; it's an old map that popped up on a google search) and Cue - with additional high grade ore being trucked up from Penny.

Rebecca Roe is on the other side of Kalgoorlie, about 350 to 400 km from Mt Magnet as the crow flies (by straight-line distance), so not within ore trucking distance of Mt Magnet which Ramelius are currently planning to use as their only gold mill until they build one at Rebecca-Roe. They also own the Spartan mill, which is called the Dalgaranga mill, but they don't plan to fire that up again at this stage - they're planning to leave it on C&M for now [because it's so close to their existing Mt Magnet Mill].

There are other high grade gold projects in the Mt Magnet area, or a lot closer to Mt Magnet than Rebecca-Roe is, but they are owned by other companies, so that's why I say the M&A might not be over yet. We shall see.

So why have I explained all of that about RMS? Because they recently got sold down -21% in a week and haven't recovered much - although today's +5.63% rise in their SP to $3.38 (up 18 cents) is a good start - and some people have clearly sold out of RMS based on their lower production guidance over the next two years - however I'm backing them because of all the reasons I've already shared here, including them now having Simon Lawson (ex-Spartan CEO & MD, and the Technical director at Gorilla Gold Mines) in their (RMS') bolstered exploration team (Simon is also RMS' deputy Chairman, so he's also on their Board), the company having a clear path to over 500 Koz p.a. of Au production within 5 years, and now being a multi-billion dollar company that entered the ASX100 Index in September so is going to attract more eyeballs.

I also really like their low costs which is mostly due to higher gold grades than their peers. Those low costs (AISC) are shown on the third image up (the 5-year guidance image) compared to their peer group which includes Northern Star, Evolution Mining, Genesis Minerals, Capricorn Metals, Greatland Gold, Regis Resources, Vault Minerals & Westgold Resources, as stated in the fine-print at the bottom of that slide.

When you consider that EVN's own AISC does drag that peer group AISC down by including a HEAP of copper byproduct credits, if you were to exlude EVN (which is a gold/copper miner rather than just a gold miner), then RMS' competitive cost advantage would be even greater than those remaining peers.

Which is all to say that my approach is a lot different to Sean Russo's. My approach is much more bottom up than top down. I'm not glued to those various ratios that Sean is all over. And I invest in gold companies only, not physical gold, and no ETFs or ETPs. So, yeah, not sure about that one @tomsmithidg but if I watch the pod for a third time I'll try to work it out.