Gold & AI (Copper & Uranium) Update- Feb 8th 2025
Gold (and silver) is making headlines, fueled by rumors that U.S. Treasury Secretary Scott Bessent is stockpiling gold for the U.S. Treasury. Reports of gold shipments from the London Metal Exchange to New York have surfaced, causing delays in the withdrawal of this precious metal from the Bank of England. Could the Bank of England be on the verge of default? Additionally, China’s Central Bank has resumed buying gold, and on Friday, February 7th, China announced a pilot program allowing top insurance companies to gain exposure to gold products. Meanwhile, the cost to borrow gold (and silver) has skyrocketed. What’s going on? In uncertain times, especially with the unpredictability of Trump’s second term and high U.S. equity valuations, investing in gold might not be a bad idea—in fact, it could be a smart move.
In January, Deepseek issued a cautionary note on the overvaluation of AI stocks, while semiconductor and "Magnificent Seven" stocks are beginning to show signs of retreat (a stance I share, being bearish on these). I don't believe AI itself is a bubble, but certain accounting practices involving round-tripping within some of these companies definitely hint at potential Ponzi schemes waiting to be uncovered (I have no investments in these stocks, despite being bullish on AI's future). For safer AI-related investments, I recommend focusing on copper (essential for electrification and new DC grids) and uranium (for nuclear-powered data centers).
Zijing $ZIJIN MINING(02899)$ is my favorite pick, as it is one of the largest Gold and Copper Miners in the world, and I believe China itself is a huge market to Gold and Copper consumption. The stock is starting to breakout, as it often move after Gold and Copper prices breakout.
As for Uranium, the $Sprott Uranium Miners ETF(URNM)$ chart is also starting to look promising and I have placed a limit order of $37.97 as first enrty buy. Less volatile $CGN POWER(01816)$ is a good defensive play.
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