Most readers know by now, that we are very optimistic about the future prospects of the gold arena, and gold stocks in particular.

But they still are scratching their heads what this would possibly mean, or how high these stocks could rise. Well, let history be your guide, we would argue. As we already experienced a comparable set-up to today’s price evolution.

Right after the turn of the century, gold stocks were completely bombed-out, while the traditional stock markets were at record levels. In the beginning of last year, the gold sector again was at totally depressed levels, with the Gold Bugs index (HUI) losing more than 80% from its highs, and the general stock markets touching new records.

But now, gold stocks are experiencing a fierce U-turn, having a blow-out 2016, and a jump-start in 2017. Just like we saw in the period of 2001 – 2002.

On the chart above, you can see the ratio between the S&P 500 and the HUI.

Everytime the gold stocks started shooting higher, this ratio would crater. This happened in the 2001 – 2002, and it is happening again. Even more so, the current downturn has successfully tested, as you can see on the chart.

We now expect the ratio to drop towards 2.5x, and maybe even lower.

Of course, back at the turn of the century, not only did gold stocks start a phenomenal run, also the S&P 500 came crashing down. This time around, we don’t expect the general stock markets to crash. We more or less think stocks can go through a milder correction.

So this leaves gold stocks exploding, once again, in the coming years. If the S&P 500 index could hover around the 2k level, the HUI-index could run-up towards 800.

That’s a fourfold from the current price.

We are forecasting the ratio could even drop below 2.5x, with the HUI jumping over the 1.000 mark. That’s why we are so positive on gold stocks. Especially, the darlings of this sector, which we have combined in the selection List of the Gold & Silver Report.