You’re Missing the Hottest Market of 2025 (4 Stocks to Buy Now)

Key Concepts

• Gold Market Dynamics: Shift from central bank buying to increasing retail investor interest.
• Gold Price Projections: Potential for significant upside, reaching $8,000-$10,000 per ounce.
• Silver Market Opportunity: Silver's volatility and potential for higher returns than gold during boom times.
• Mining Stock Leverage: Operational leverage of mining companies to metal prices, leading to amplified profits.
• Market Cycles: Understanding historical patterns of gold booms and busts.
• Retail Mania: The late stage of a boom characterized by widespread, often irrational, investor enthusiasm.
• Global Economic Strength: Correlation between rising global stock markets and strong global growth.
• Stanbury Score: A tool for evaluating stock recommendations.

Gold Market Analysis and Future Outlook

Brett Eversol of Stanbury Research discusses the current strong market environment for metals, particularly gold, and forecasts significant future upside. He notes that while gold has risen from $1,800 to nearly $3,000 per ounce, retail investor interest has been historically low until recently. This is now changing, with retail investors beginning to enter the market in 2025.

Shift in Gold Market Drivers

• 2010s: Central banks divested gold holdings.
• 2022-2024: Central banks reversed this trend, selling Treasury bonds and buying gold, driving prices up. During this period, retail investors showed "absolutely no interest."
• 2025 Onwards: Retail investors are now starting to notice the higher prices and increased activity, leading to their entry into the market.

Evidence of Retail Investor Inflow

• GLD ETF Shares Outstanding: Eversol points to the largest gold ETF, GLD, as an indicator. Shares outstanding collapsed from 2020 to 2024, indicating selling pressure. However, they began to rally in the past year, signifying increased investor demand.
• Boom to Bubble Progression: Eversol explains that in any major boom, institutional money leads, followed by retail investors who flood in when they see profits, potentially turning a boom into a bubble. He believes the gold market is in the early stages of this transition, from boom to bubble, driven by this new retail interest.

Gold Price Projections

• Historical Cycles: Eversol references the gold boom of the 2000s (2001-2011), which lasted about 10 years and saw gold rise by approximately 600%.
• Current Cycle: The current cycle began in 2018, and gold has risen about 300% since then.
• Projected Upside: Based on historical patterns, Eversol suggests gold prices could roughly double from current levels. He anticipates gold reaching $8,000 to $10,000 per ounce by the end of this cycle.
• Recent Price Action: He notes a significant move in the last 4-6 weeks, from $3,500 to $4,400 per ounce, and expects a pullback but maintains the long-term thesis is intact. He predicts gold will rally for another two to three years.

Silver Market Opportunity

Eversol highlights silver as a "massive opportunity," describing it as gold's "wacky cousin" due to its higher volatility and tendency to "do its own thing."

• Industrial Uses: Unlike gold, silver has industrial applications, contributing to supply-demand dynamics.
• Catch-up Potential: During boom times, silver tends to "soar" and "catch up at the back end" of a rally, offering potentially higher returns than gold.
• Gold-to-Silver Ratio: Eversol suggests that based on the gold-to-silver ratio, silver could potentially "2x gold's return." If gold reaches $8,000 per ounce, silver could see a significant increase from current levels (e.g., $50 to $200).

Four Metal Stocks to Watch

Eversol presents four metal stocks with significant upside potential:

1. First Majestic Silver (AG)

• Company Profile: A Canadian company with all operations in Mexico. Primarily a silver producer, with approximately 60% of revenues from silver.
• Historical Performance: Has a history of "soaring during metals booms," with gains of 500-600% in the early 2000s and a couple of thousand percent coming out of the financial crisis.
• Investment Thesis: Expected to perform "incredibly well" due to its primary silver production and historical performance in metals booms.

2. Hecla Mining (HL)

• Company Profile: A primarily North American producer with roughly a 50/50 revenue split between gold and silver.
• Operational Leverage: Mining stocks benefit from operational leverage; fixed costs mean that as metal prices rise, profits increase disproportionately.
• Low-Cost Producer: Hecla is a "very low cost producer," with the cost to extract an ounce of silver around $13, significantly lower than the industry average in the mid-$20s.
• Investment Thesis: Strong assets in good locations and a low-cost production model position it for major growth in a rising metal price environment.

3. Equinox Gold (EQX)

• Company Profile: A gold producer that has invested heavily in growing its production over the past three to four years.
• Production Growth: Production is projected to increase from approximately 800,000 ounces this year to 1.2 million ounces by 2027.
• Cost Reduction: The company is transitioning from a growth mindset to a profitability mindset, with costs expected to fall from around $1,900 per ounce to $1,300 per ounce.
• Financial Projections: Free cash flow is expected to surge from $50-$80 million last year to approximately $1 billion next year.
• Investment Thesis: A "perfect trifecta" of falling costs, rising production, and soaring metal prices is expected to turn Equinox Gold into a "cash gushing machine" with massive profit growth.

4. Seabridge Gold (SA)

• Company Profile: Holds significant assets in Canada, with a key project called KSM (Kerr-Sulphurets-Mitchell).
• KSM Project: This project has been in development for about 20 years. The net present value of the metals in the ground is estimated at $25-$30 billion, with an estimated build cost of $6-$7 billion.
• Joint Venture (JV) Catalyst: Seabridge is actively seeking a JV partner to finance and oversee the construction of the KSM mine. Eversol believes this JV deal is "getting very close" and will be a "massive upside catalyst for the stock."
• Highest Leverage to Gold Price: As a non-producing company with only gold in the ground, Seabridge offers the "highest way to get that leveraged to the gold price." The economics of its underground assets "skyrocket" with rising metal prices, even more than for producing companies.
• Investment Thesis: The company offers a dual upside: rising metal prices and the potential JV deal. The KSM project is expected to be one of the top five largest gold-producing assets globally once operational, addressing the need for major producers to backfill reserves.

Broader Market and Economic Implications

Eversol addresses the question of what the rising metals market signifies for the overall economy and stock market.

• Not a New Phenomenon: He notes that gold has outperformed the stock market in both 2023 and 2024, indicating this trend has been ongoing for a couple of years.
• Different Asset Classes: He advises analyzing metals and equities as distinct asset classes.
• Strong Global Growth: The fact that every major sector and global stock market is at all-time highs suggests strong global growth. He contrasts this with a scenario where only the US market is rising while others are in depression, which would be a worrying sign of unsustainability.
• "Wall of Worry": Bull markets typically climb a "wall of worry," meaning there are always concerns, but these are normal.
• Market Environment: Eversol describes the current environment as a "very strong global boom" and believes the bull market is "nowhere near the end yet."

Risks and Investment Considerations

• Commodity Market Volatility: Mining stocks are directly linked to metal prices, making them inherently volatile.
• Pullbacks Expected: Eversol anticipates a "cool down" or pullback in metal prices, especially after the recent parabolic move, suggesting a potentially better buying opportunity.
• Late-Cycle Risks: In the late stages of a cycle, major companies historically make poor acquisition decisions. Eversol prefers intermediate-sized producers that are more disciplined.
• Mining as a Business: He acknowledges that mining is generally a "bad business" and difficult to profit from long-term, but emphasizes that "at the right moments with the right people, you can do really well."
• Retail Mania as a Warning Sign: The absence of "retail mania" – the overwhelming, widespread enthusiasm seen at the end of previous booms – suggests the market is not yet at its peak. He recalls the end of the 2011 gold peak where financial media was saturated with gold-related content, which is not the case now.

Stanbury Research Tools

• Stanbury Score: A tool available through Stanbury Research that provides recommendations on whether to buy or sell stocks, including the four metal stocks discussed. A QR code and link are provided for a free look at these recommendations.