Brief Summary
In this interview, Omar Aalis shares his insights on the gold market, offering a more skeptical outlook compared to the generally bullish sentiment at the New Orleans Investment Conference. He discusses the potential for gold to enter a period of consolidation, influenced by factors such as the strength of the U.S. dollar and historical price cycles. Aalis also touches on opportunities in other commodities like copper and uranium, suggesting a rotation towards undervalued assets in the energy and industrial sectors.
- Gold may enter a period of consolidation due to a stronger dollar and historical price cycles.
- Opportunities exist in undervalued assets like copper, energy, and uranium.
- Diversification and due diligence are crucial in the current market environment.
Intro
Charlotte Mloud from investingnews.com interviews Omar Aalis, author of the Gold Charts RS newsletter, at the New Orleans Investment Conference. They discuss the overall sentiment at the conference, which is largely positive regarding gold and silver, and Aalis shares his perspectives on the precious metals market and other investment opportunities.
Will gold keep rising?
Omar Aalis expresses a more skeptical view on gold's continued rise compared to the prevailing bullish sentiment. He notes that gold has nearly doubled in price over the past year and suggests that a period of consolidation is likely. Aalis points out that the U.S. dollar index has not fallen to new lows despite gold's recent surge, indicating potential strength in the dollar that could pressure gold prices. He also references gold's historical 11-year cycles, suggesting a potential peak and subsequent decline between now and next year, though he acknowledges that strong fundamentals could lead to a different outcome this time.
Key gold price signals
Aalis mentions that the price of gold is very high relative to other commodities. Historically, such ratios between gold and other commodities like copper, silver, and crude oil have indicated potential reversals. He believes gold may have risen too much, necessitating other metals to catch up before gold can continue to appreciate. Aalis suggests that if gold falls to around $3,600, it would find strong support, and whether it breaks below that level will depend on the continuation of the bull market's fundamentals.
Taking profits in gold
Aalis discusses repositioning his portfolio by consolidating holdings in larger, more established gold producers with strong balance sheets and cutting back on more speculative junior miners. He has reduced his gold holdings by about a third and is reallocating capital into undervalued areas like copper and energy, including major companies like Chevron and ExxonMobil, which offer good dividends. He suggests rotating out of precious metals and into industrial resources, including silver, while still maintaining some exposure to precious metals.
Bullish on copper, oil
Aalis expresses a bullish outlook on copper, viewing it as a key transition metal essential for electrification. He notes that while larger copper miners have been underperforming, junior miners in the industrial resources sector have shown strong performance. For oil, currently around $60, Aalis sees potential for prices to rise to $76 if they break above $63, which could significantly benefit even senior energy companies.
Stock market outlook
Aalis believes that while some sectors of the stock market, like industrials and energy, will perform well, the AI hype may take a toll. He suggests that an AI pullback could initially affect uranium and transitional metals, though he doesn't expect it to derail their bull market entirely. Aalis draws parallels to the internet boom, where many companies that laid the groundwork went bankrupt, cautioning that the billions being invested in AI may not necessarily yield easy returns.
Uranium stock to watch
Aalis identifies the energy space, particularly uranium, as a sector with significant potential. He believes uranium and nuclear energy have considerable room to grow as viable energy sources. He favors smaller uranium producers in North America due to geopolitical factors and a push for energy independence. Aalis mentions NextG Energy, a Canadian company, as a well-managed and profitable uranium company.
Critical minerals ETF
Aalis expresses interest in critical minerals, also referred to as transition minerals, as part of the energy boom. He recommends the SEM ETF, which includes about 10 different companies involved in the energy transition with critical minerals. The ETF offers exposure to nickel, silver, copper, and uranium producers within North America, providing diversification across various subsectors.
Best asset of 2026
Aalis predicts that something in the industrial metal space, specifically copper, will be the top-performing asset in 2026. He notes that copper typically follows gold in market cycles, driven by a rotation from safety to industrial assets. While energy also has great potential, U.S. policies aimed at keeping energy prices low may delay its peak performance.
Outro
Aalis encourages investors to attend the New Orleans Investment Conference for valuable insights and to conduct thorough due diligence by getting to know the people behind the companies. He advises taking a diversified approach, acknowledging concerns about a potential "everything bubble" and urging investors to take recommendations with a grain of salt and do their homework.
