Pembleton’s Points on Gold, 2019-2024

AUTHOR: DAN PEMBLETON

Introduction: June 2025

Gold Price (USD/oz): $3,340

Gold is quietly becoming the most important asset class in the world again. It’s been rising from high to high for two big reasons that I (and others) have been hammering on for years: the deepening pits of government debt and monetary debasement.

The United States is the 800-pound gorilla, but all of the world’s big economies and their currencies are getting weaker. Gold is at or near a record high relative to the U.S. dollar, Canadian dollar, euro, yen, yuan, British pound, Swiss franc, ... More accurately, the governments of those countries have witnessed their currencies devalue to record lows against gold.

Precious metals, especially gold, are reasserting themselves as true safe havens and protectors of purchasing power. We’re also beginning to see the price gains filter down to junior mining companies — the kind we hold in the Pavilion Resource Fund.

“I haven’t been this optimistic for gold and gold stocks in a long time…”

The climbing gold price isn’t a blip. It is a trend. I believe it continues to signal a major trend, the commodity supercycle I’ve been talking about for years. Central banks were early buyers. Now generalist investors are waking up and piling in. (In case you want evidence of my analysis and outlook on these points, we’ve included snippets of my letters to investors since 2019.)

I haven’t been this optimistic for gold and gold stocks in a long time, and I think we’re about to see the kind of advance in the junior miners that I’ve only read about and heard about from the “old timers” in the market who were there. And no, we’re nowhere near the top yet. And yes, there will be bumps, pullbacks, and downdrafts along the way. Gold is a commodity that works hard to get investors to jump off the bull market; to avoid this you have to look at the fundamental and psychological drivers of the market, and that is what we do.

The Pavilion Resource Fund is positioned exactly where we want it to be. I’m the first to admit that we were a few years early, but maybe not that early if you look at the 5-year charts of gold vs. several of the major currencies. We truly believe the best is yet to come.

Dan’s Gold Snippets, 2019-2024

Excerpts From Dan’s Letters To Investors On Gold’s Rise

Note: Prices shown are the World Gold Council’s “Gold Reference Prices” for the month. https://www.gold.org/goldhub/data/gold-prices

August 2019

Gold Price (USD/oz): $1,505

“While it takes time for higher gold prices to filter down to the junior markets, it does happen eventually.”

“Keep in mind that this is our expectation of what may happen based on past experiences, but things can certainly be different than we expect, and certainly no bull market moves in a straight line.”

“As gold makes a new high against each remaining major currency, it will add more reinforcement to the currently quiet but growing commentary around the strength of gold and the weakness of currencies.

“Gold’s appreciation relative to currencies is not really a new phenomenon, currencies have been steadily depreciating against hard assets like gold since fiat currencies were invented. However, it is these periods of rapid depreciation that provide the best returns to gold and gold miners.”

September 2019

Gold Price (USD/oz): $1,499

“While nothing in this note is provided as an explicit prediction of what will unfold, I think it does illustrate the point that everyone should perhaps think a little defensively in their economic decisions. This defensive posture should also include considering what your exposure to the gold market and gold stocks is in your portfolio.”

July 2020

Gold Price (USD/oz): $1,985

“This price appreciation is unlikely to end soon. Yes, the pure pace may slow as economies open back up. However, the economic damage will take years to repair.”

“A lot of money will be printed between now and when that happens, and gold will go a lot higher. It is about as favourable an environment now for precious metals as you can

possibly get. We should all get ready for a long, and strong, bull market in gold.”

“Capital flows are just starting to turn toward gold as an asset class. These take a long time (several years) to fully actualize.”

“I will give a word of caution. Gold bull markets do their very best to dump investors off as often as possible. These markets are characterized by rapid upswings and equally rapid downdrafts, all to shake investor confidence. You need to stay focused on fundamentals, and ignore the market, to remain onboard and invested.”

September 2021

Gold Price (USD/oz): $1,776

“The huge expansion of central bank balance sheets and printing of money has the effect of reducing the value of those currencies, particularly against hard assets. Commodities are all considered hard assets (real things) and gold and precious metals are also considered monetary assets. The more money is printed, the higher the prices of hard assets will move.”

October 2023

Gold Price (USD/oz): $1,995

“For this reason, in our view, the current economy is masking underlying vulnerabilities. When these vulnerabilities surface, the central banks will have no choice but to react by lowering rates. This is when Gold and precious metals will show exceptional returns. Gold has already started to show signs of being ready to move much higher. Central banks have been significant buyers as they recognize the need to improve the resiliency of their own balance sheets.”

“We feel that our positioning will pay off for our investors through the coming years.”

March 2024

Gold Price (USD/oz): $2,335

“Gold as a commodity has, after four years of a very sideways trade, finally been attaining all-time high prices as we write this letter at the beginning of March. We believe, as we have stated many times in the past few years, that gold is due to continue its significant bullish run which started in the early 2000s. That will be good for large portions of our portfolio which we will allow to increase in price before we start to nibble at taking profit on those stocks too.”

 July 2024

Gold Price (USD/oz): $2,453

“Now is gold's time to really perform, and it has. What is driving it as the base demand right now is, I believe, a rebalancing of portfolios by the central banks; mostly Eastern Europe, Middle East and the Asian banks.”

“To rebalance then, or at least get a little bit closer to the allocation they held before, many are buying gold.”

November 2024

Gold Price (USD/oz): $2,639

“Gold has exhibited remarkable price appreciation over the past three years and has accelerated this year, reflecting a confluence of global economic, geopolitical, and market-specific factors.”

“In modern financial markets, gold is often viewed as a safe-haven asset, providing protection against economic and geopolitical risks. During periods of financial turmoil, such as the 2008 global financial crisis, gold prices have typically surged as investors seek refuge from volatile equity markets and uncertain economic conditions. The current environment is no different, with gold once again playing a central role in investors' portfolios.”

Gold Price Charts (Past 10 Years)

Source: World Gold Council