STP up $31,000, LTP down $25,000 – all is well.

GILD/Stock – Still reasonably priced at 17.5 x earnings and that's prior earnings – this year they are on-track for $9Bn against $89.5Bn market cap.    We have GILD in the LTP but only 10 of the 2023 $50/65 bull call spreads with 5 short $50 puts which, of course, is all in the money now.  

As a new trade for GILD, I'd go for:

• Sell 10 GILD 2024 $60 puts for $7 ($7,000) 
• Buy 15 GILD 2024 $60 calls for $16 ($24,000) 
• Sell 15 GILD 2024 $75 calls for $8.50 ($12,750)
• Sell 5 GILD Jan $72.50 calls for $3.65 ($1,825)

That's net $2,425 on the $22,500 spread, so there's $20,075 (827%) upside potential but we only used 123 out of 851 days to raise $1,825 so we'll get the basis down below $0 as time goes on.  GILD is not likely to pop 10% ($77.50) but, if it did, you'd owe back $2,500 so not a very risky short call strategy and, of course, at $77.50, you'd be on the way to a $20,075 gain anyway.  

Silver/Stock – Well we have WPM in the LTP, still good for a new entry as it's a $30,000 spread at net $5,500 so "only" $24,500 (445%) left to gain if all goes well – even if you missed out on our net $500 initial entry.  Silver streaming is only 1/3 of their revenues with Gold being pretty much all the rest (Palladium is the end of it).  

PAAS is a good miner and didn't lose money last year, so I like them but $5Bn at $24.26 vs not even $200M in earnings in their best year (projected to go to $400M+ next year) means you have to really buy into the expansion story.  Last Q, they revised production guidance lower by 12% for gold and 17% for Silver.  Yes, the put sale is reasonable if you are a believer but how can I put metals money into PAAS when GOLD is at $18.50, which is $32.5Bn and they made $2.3Bn last year so 14x against a terrible year and likely to get much better.  

That's a nice chart if you are a long-term investor!   Also this:

One important aspect of Barrick's financial outlook is its gold reserves. The latest, as of the end of last year is that it is sitting on 68 million ounces that are considered to be economically viable to produce, given an assumed price of gold of $1,200/ounce. At current gold prices, reserves would probably increase. It should be worth noting that the value of the 68 million ounces of gold at current prices is $122 billion. Its current market cap is $34.5 billion. It should be noted that as per Barrick's less conservative estimate given an assumed price for gold of $1,500 its reserves more than double to 160 million ounces. There are also 13 billion pounds in copper reserves. Taking the less conservative reserve estimate as well as the copper reserve value, Barrick is currently trading at 10 times less than its reserve values. 

A sustained stagflationary environment is also likely to create a great deal of mistrust in holding large piles of central bank reserves denominated in currencies that are seeing a massive amount on supply expansion. There are many central banks around the world that have been increasing their gold holdings substantially for many years now. Russia & China are well-known gold bugs. More recently Hungary & Poland have been going down the same path as well. Hungary increased its gold reserves from just 3.1 tons a few years ago, to 94.5 tons currently. Poland went from just over 100 tons a few years ago to almost 229 tons currently. Many other countries around the world are increasing their gold reserves and I expect that the trend will continue as the world's main reserve currencies are seeing massive growth in supplies.

 

Central banks around the world seem to be doing what many investors are also doing, namely making sure to have some gold reserves in case that something goes horribly wrong with the fiat currency system, at the national level, or perhaps internationally, in the event that one or more of the main fiat reserve currencies will falter. There is also the increasingly credible threat of inflation taking off globally, with few tools available to stop it, given the debt trap dilemma. There are many reasons to expect gold prices to rally throughout this decade.

As a new play on GOLD, I'd go with:  

• Sell 10 GOLD 2024 $20 puts for $5.20 ($5,200)
• Buy 20 GOLD 2024 $17 calls for $4.40 ($8,800) 
• Sell 10 GOLD 2024 $25 calls for $2.20 ($2,200) 

That's net $1,400 on the $5,000 spread that's 1/2 uncovered so we have the flexibility to let it make gains or sell short calls over 851 days to make up that $1,400 – that's why I get so excited when the new options come out – so much time to make money, so much flexibility!