Gold's Perfect Storm
Contributed Opinion

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I have heard all kinds of reasons why gold has gone down. I have even heard of some bulls turning bearish. I think a big issue is, just like many did not understand why gold went up, they don't get why it went down.

• First off, before it went down, it went up too high;
• Despite the hoopla of gold's decline, it only gave up January's increase;
• The S&P 500 gave up 6 months of increase;
• BoA reported Fund Managers cash position in January was lowest in history at 3.2%;
• If Funds wanted cash for margin, to buy oil stocks, gold had the liquidity while stocks and bonds were going south;
• Some gulf countries with no oil revenue had to sell some gold;
• Margin debt was at record levels so when the calls came in, some sold gold;
• There is still lots of short positions by the Casino owners so they helped push gold down to cover lower. That is why the big declines at 1 and 2AM;
• Weak and jittery hands added to the selling.

The chart gave us a perfect technical bottom and reversal. It was a retest of the late January bottom and at a support area. We also got the strongest reversal pattern I know, a morning doji star reversal. We had several down red candles, the doji (indecision) yesterday, and this morning, the up green candle. The bottom a close hammer candle stick was also on high volume.

Remember, this was a sell-off in paper markets, Comex, and ETFs. The retail investors that piled in at the top in ETFs, panicked and sold.

Veteran gold expert Von Greyerz said it nicely — the physical whales were gobbling up the retail minnows. Also, be sure to check out the PlayStocks gold pages. They are getting attention.

Many argued that if gold is a safe-haven asset, it should have gone up. As I pointed out, it went down when the Ukraine war started before reversing months later to record highs. The market is pricing in a short war, a quick U.S. victory, so what is the need for a safe-haven asset? This war is just a short-term blip. As you know, I believe otherwise and when the market finally realizes what is going on and stops being fooled by propaganda, the scramble for gold will be on.

The main thing driving the gold bull market is a loss of faith in the US$ and fiat currencies. This extra wartime spending is only going to add to the debt and the U.S.'s inability to cover the deficit. When the money printing taps get opened up, and they will have no choice, it will be more scrambling for gold.

With renewed Central Bank interest and higher price, gold has become the most liquid market by leaps and bounds,significantly beating out U.S. Treasuries. This data at Dec., 31, 2025

Funds have no cash cushion and had to sell gold to raise cash.

Margin debt was at record levels, setting up retail investors for the slaughterhouse.

Canadians also went on a margin party with the steepest rise in history.

The bearish narrative in the gold market was about as bad as it gets, but most of it was inaccurate analysis. We should not focus on where gold is, but where it is going. That is a lot higher as the long-term bull trend is intact, and I maintain my $6,600 target for 2026.

Wayne Gretzky was perhaps the greatest hockey player of all time. It was not because he knew what was happening on the ice; it was because he knew what was going to happen! If Gretzky were a gold investor, he would be buying gold now. Central Banks see this for what it is, the best buying opportunity in a year.

I believe one of the best junior gold producers to buy in this correction is Heliostar. They have a unique and very lucrative business model in the current gold environment.

Heliostar Metals 

Recent Price – CA$2.16

Entry Price -CA$2.86

Opinion – Buy, average down to $2.50

We first bought Heliostar Metals Ltd. (HSTR:TSX.V; HSTXF:OTC; RGG1:FRA) in late February after gold corrected, but the correction went on longer for the gold stocks that fell further. Heliostar broke through a support level around $2.50, and the stock corrected further than most. From its $3.30 peak, it dropped about -50% before a recovery started. This is a great buying opportunity.

Heliostar has bought past-producing low-grade mines and restarted production. A few years back, gold was under $2,000, and costs rose with inflation, so mining companies stopped putting investment in some low-grade mines, let reserves dwindle out, and production stopped. There was just not enough margin at $2,000 and lower gold prices from some low-grade mines.

Heliostar first bought the old Argonaut Gold Mexican mine portfolio for a measly US$5 million in 2024 before the gold price lifted off. You will never get a deal like that again in this gold market. You can read our original report for the details.

They are producing at La Colorado, Mexico, and have extended the mine life for another 6 years. The 2^nd producer is their San Agustin Mine, Mexico, and recent drilling looks certain to extend mine life with similar grades they are currently mining. Those results were highlighted in our March 18^th update

The 3^rd mine is the Ana Paula, scheduled to start production in 2028

They now have incredible margins at over $4.000 gold and current gold prices. They have 9 drill rigs running across their projects, so there will be lots of drill news. Production was 34,098 ounces in 2025 and should increase by about 60% in 2026. They are using cash flow from production to expand, and currently have about $40 million in cash.

Now, on March 23, they announced their latest acquisition, Goldstrike in Utah. It has almost 1 million indicated ounces, so they are acquiring this for about US$75 an ounce for an advanced project. A good deal in today's gold market.

Highlights

• Goldstrike contains an indicated mineral resource of 975,000 ounces of gold grading 0.46 grams per tonne;
• Initial purchase price of $10-million (U.S.) in cash plus $2.5-million (U.S.) in Heliostar shares on closing, plus additional milestone payments totalling $60-million (U.S.) in cash over a maximum of five years;
• Historic past producer with infrastructure including road access, proximity to a population centre, and a power line within eight kilometres of the property;
• Outcropping, undrilled, high-grade antimony samples and historic antimony production provide critical mineral potential.

Project details

The Goldstrike is located in the Bull Valley Mountains in Washington County, approximately 50 kilometres northwest of St. George in southwestern Utah. The property area totals 5,173 hectares and is accessible year-round via paved and all-weather roads.

Open-pit mining and cyanide heap-leach processing took place on site from 1988 to 1996. A total of approximately 209,000 ounces of gold and 198,000 ounces of silver were produced during these operations from approximately eight million tons (7.26 million tonnes) of ore mined from 11 open pits.

Drilling at the project includes 1,389 holes (87,020 metres) drilled by historical operators and 2,375 holes for 217,394 m drilled by Liberty from late 2015 through 2022. The data includes 77 core holes and 23 sonic holes, with the remainder being reverse circulation (RC) holes.

This project will take some work to move to production with more drilling and a feasibility study. It could come into production after Ana Paula.

You can get much more detail about how the company has done and their plans with this recent management webinar.