While the DOW and Nasdaq took a dump on Thursday and Friday, following the Federal Reserve’s decision to raise interest rates by 75 points again, the price of gold held up well, actually rising on Friday. This out performance of gold relative to the stock market is nothing new, as you can see from the gold/SPX relative strength ratio on the bottom of this chart.
The price of gold has been outperforming the S&P 500 all year. That’s why the ratio on the bottom of this chart has been rising. The exciting thing for next year is that this ratio is actually in a position to breakout, which would strengthen this trend in 2023.
That should be no shock, as gold tends to trade opposite to the US dollar index, and the dollar has been slipping for several weeks now. As the Federal Reserve approaches the end of the its current tightening cycle, it sets the stage for a bearish year for the US dollar next year.
When gold goes up, mining stocks tend to go up more than gold and the top small cap junior mining and exploration stocks tend to go up the most.
The buying in the stock has caused the on balance volume indicator on the bottom of this chart to jump up. After almost doubling in price in November, the stock has been trading in a range with current resistance at 30 cents and support around 22 cents. I’m looking for it to consolidate in this range here and then hopefully breakout to the upside and run hard with gold. It has a lot of good things going for it.
The company is an emerging junior gold development company, which owns the Moss Lake Gold Project located in Ontario. Wesdome Gold Mines Ltd. is currently a strategic shareholder of Goldshore with an approximate 30% equity position in the Company. Goldshore is working to advance the Moss Lake Gold Project through its next stages of exploration and development. That means drill programs to prove up reserves.
The company took a big step in that direction in November when it released an inferred estimate of 4.17 million ounces of gold for open-pit leach mining. In a press release it stated:
- “There is significant and clear expansion potential through strike and dip extensions to known shears, as well as parallel shears. The Company has included 48 holes from its 2021 and 2022 drilling campaign in the new MRE and has drilled an additional 52 holes that are not included in the MRE because assays have not been received to date.”
- “The current MRE represents a significant expansion over the 2013 historical estimate for the Project with 35% more tonnes and 33% more contained gold ounces.”
- “The Moss Lake Gold Project is host to 29 additional targets over a 35 km trend, which the Company continues to evaluate.”
The details of the estimate are going to be put into a formal National Instrument 43-101 (“NI 43-101”), which will be filed under the Company’s SEDAR profile.
Soon after the release the CEO of GoldShore did a presentation at the Deutsche Goldmesse conference in Germany you can view here.
Typically when a company like this continues its drill program it can generate positive news flow for a company.
Look for a great 20223 for the company and the stock.
You can find the company’s PDF corporate presentation here.
Disclosure: Because GoldShore Resources is a small cap stock with a market cap of less than $100 million Mike Swanson has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post (12/18/2022). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for GoldShore Resources. This third party paid Timingwallstreet Inc., $3,500 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days from 12/18/2022. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.