The Stage is Set for Mining Stocks to Take Off: Stöferle

Gold equities remain unloved but are ready to run

The time is now for performance gold, according to Incrementum managing director, partner and fund manager Ronnie Stöferle.

Stöferle, delivering the opening keynote address on day one of the Mining Forum Americas 2025 in Colorado Springs, said the old investment playbook was breaking down.

“Why? Because the classic 60:40 portfolio rested on the assumption that bonds would always offset equity risk,” he said.

“But in today's inflationary reality, bonds are no longer a stabiliser. They've become a dead weight. They are dragging portfolios lower, while inflation risks still remain underpriced.”

Incrementum’s 2025 In Gold We Trust report introduced a new portfolio, comprising 45% stocks, 15% bonds, 15% safe haven or physical gold, 10% performance gold, comprising silver and gold and silver equities, 10% commodities and 5% bitcoin.

“Performance gold has to be actively timed, because volatility is high and leverage cuts both ways, so safe haven gold provides stability and balance, while performance gold adds momentum and adds leverage,” Stöferle said.

“Together, they can be transformational for any portfolio.”

Incrementum has compared the current gold bull market to the previous two bull markets in the 1970s and 2000s.

“Because in every golden decade, gold goes first, but then it slows and the real fireworks usually come in the second half of the decade,” Stöferle said.

“Now, gold was up 73% in the first half of this bull market, more than in the 2000s but behind the 1970s.

“Silver, the restless little brother, tends to go wild late in the cycle.

“And as we all know, the miners, they have lagged badly, but that's typical – weak starts often precede spectacular catch-ups.

“So the message is clear, now it's the time for performance gold, and if we compare the performance in this bull market compared to the previous two bull markets, we can see that actually this development is still fairly muted.”

Gold still underowned

Stöferle said there were three factors driving the golden decade: monetary excess, geopolitical shifts and systemic distrust.

“As we know, gold has broken out of this long-term cup and handle formation that we've experienced from 2020 to 2024 and all those pullbacks since then, they've been pretty shallow,” he said.

“They were quickly absorbed. What does it mean if a pullback is only very short? It means that there's plenty of cash, plenty of interest, waiting on the sidelines, people that have missed the gold party, that have missed the gold trade, they now eagerly want to get in.”

However, Stöferle said institutional allocations remained “strikingly low” at just 2%.

“That's not a hedge. That's pocket change,” he said.

Some of Incrementum’s clients have been wondering if now is the time to sell.

“They would like to take profits. That's not the usual behaviour we see at the end of a secular bull market,” Stöferle said.

“People keep telling me that gold is already too expensive. I tend to disagree. Sure, gold isn't dirt cheap anymore, like a couple of years ago.

“But if we have a look at, for example, the market cap of gold compared to the market cap of US equities, you can see that the valuation of gold is currently 38% of the valuation of US equities, which is exactly the long-term median value, a far cry from the 160% reached at the peak in the 1970s or even the 70% that we saw in 2011.

“Now I ask you, do secular bull markets usually end at median values at long term averages? No, they end at extreme values.”

Euphoric inflows coming?

The spot gold price remained above US$3600 an ounce as the conference kicked off.

But Stöferle said miners remained unloved.

“At the end of the bull market, miners usually drown in euphoric inflows. Today: silence,” he said.

For the second year in a row, the GDX has seen outflows.

“This scepticism is precisely what fuels a durable bull market, because at some point, the generalists will come back,” Stöferle said.

“And I think, as we're seeing here at the conference, over the next couple of days, there will be much more generalists in this industry, finally.

“In other words, while Wall Street is still playing video games with semiconductors, the gold mining sector is still waiting for its well-deserved spotlight.

“Let's capitalise on this bull market, this generational opportunity that we've got. Let's enjoy the momentum in performance gold. Let's ride the bull. Let's make some money. But don't get carried away. Don't be greedy. You don't have to hold forever. Try to recognise the final stage just before the music stops, and when that moment comes, we'll be here to help you with the timing.”