Loading ...The Quintessential Bull Market: 1979-1980
The granddaddy of gold bull cycles occurred during the 1970s, culminating in an unabashed mania in 1979 and 1980. Gold peaked at $850 an ounce on January 21, 1980, a rise of 276% from the beginning of 1979. (Yes, the price of gold on the last trading day of 1978 was a mere $226 an ounce.)
Here’s a sampling of gold producer stock prices from this era. What you’ll notice in addition to the amazing returns is that gold stocks didn’t peak until nine months after gold did
Today, GDX is selling for $26.05 (as of February 26, 2014); if it mimicked the average 289.5% return, the price would reach $101.46.
Keep in mind, though, that our data measures the exact top of each company’s price. Most investors, of course, don’t sell at the very peak. If we were to able to grab, say, 80% of the climb, that’s still a return of 231.6%.
Here’s a sampling of how some successful junior gold stocks performed in the same period, along with the month each of them peaked.
| Returns of Juniors in 1979-1980 Mania | ||||
| Company | Price on 12/29/1978 |
Price Peak |
Date of Peak |
Return |
| Carolin Mines | $3.10 | $57.00 | Oct. 80 | 1,738.7% |
| Mosquito Creek Gold | $0.70 | $7.50 | Oct. 80 | 971.4% |
| Northair Mines | $3.00 | $10.00 | Oct. 80 | 233.3% |
| Silver Standard | $0.58 | $2.51 | Mar. 80 | 332.8% |
| Lincoln Resources | $0.78 | $20.00 | Oct. 80 | 2,464.1% |
| Lornex | $15.00 | $85.00 | Oct. 80 | 466.7% |
| Imperial Metals | $0.36 | $1.95 | Mar. 80 | 441.7% |
| Anglo-Bomarc Mines | $1.80 | $6.85 | Oct. 80 | 280.6% |
| Avino Mines | 0.33 | 5.5 | Dec. 80 | 1,566.7% |
| Copper Lake | $0.08 | $10.50 | Sep. 80 | 13,025.0% |
| David Minerals | $1.15 | $21.00 | Oct. 80 | 1,726.1% |
| Eagle River Mines | $0.19 | $6.80 | Dec. 80 | 3,478.9% |
| Meston Lake Resources | $0.80 | $10.50 | Oct. 80 | 1,212.5% |
| Silverado Mines | $0.26 | $10.63 | Oct. 80 | 3,988.5% |
| Wharf Resources | $0.33 | $9.50 | Nov. 80 | 2,778.8% |
| AVERAGE | 2,313.7% | |||
If you had bought a reasonably diversified portfolio of top-performing gold juniors prior to 1979, your initial investment could have grown 23 times in just two years. If you had managed to grab 80% of that move, your gains would still have been over 1,850%.