OCM Top Charts – IGWT Report
Incrementum published its annual in-depth “In Gold We Trust” report. This report is a fantastic overview of the precious metals sector and a good macroeconomic perspective.
We read the 443 page report and selected our favorite charts, below.
OCM Perspective: Despite efforts of “DOGE”, US federal spending does not appear to be slowing anytime soon. Gold priced in USD historically has a 90% correlation to total federal debt outstanding.
OCM Perspective: Net Interest costs on federal debt reached an inflection point over the past year overtaking defense spending as a percentage of GDP. Expectations are for continued increases in Federal debt going forward with net interest expense continuing to grow, especially in light of growing nationalism turning foreigners away from U.S. debt contributing to higher long-term rates.
OCM Perspective: Cost of servicing U.S. debt increasing dramatically as lower cost debt maturing is being replaced at higher interest rates.
OCM Perspective: While the China/US trade war has been the hottest topic of the 2025 financial world, China has slowly been decoupling their reliance on the USD for international payments for over a decade.
OCM Perspective: Central Banks are underpinning the gold market as confidence in US policy continues to erode, especially after the confiscation of Russian assets following the Ukraine invasion.
OCM Perspective: Performance of hard assets versus the S&P showing capital is starting to flow out of financial assets.
OCM Perspective: Gold assets tend to be inversely correlated to Nasdaq as the tech heavy Nasdaq represents confidence in growth whereas strength in gold assets represents concern about economic and financial conditions weakening.
OCM Perspective: Scotiabank chart showing gold shares trading at discount to past cycles as capital rotation into gold miners has yet to gain widespread traction.
OCM Perspective: Another chart showing the gold shares have a ways to go to get back to historic trading levels.
OCM Perspective: A common complaint of the early 2000s bull market was undisciplined capital allocation by precious metals producers. We believe we are in the early innings of the market appreciating the earnings leverage of the precious metals sector in a $3,000+ gold price environment. The chart above exemplifies that producers are better positioned to take full advantage of gold’s lift to reward shareholders with capital returns rather than having to service large debt loads.
Important Disclosures
Investors should carefully consider the investment objectives, risks, charges, and expenses of the OCM Gold Fund. This and other important information about a Fund are contained in a Fund’s Prospectus, which can be obtained by calling 1-800-779-4681.The Prospectus should be read carefully before investing.
The Fund invests in gold and other precious metals, which involves additional risks, such as the possibility for substantial price fluctuations over a short period of time and may be affected by unpredictable international monetary and political developments such as currency devaluations or revaluations, economic and social conditions within a country, trade imbalances, or trade or currency restrictions between countries. The prices of gold and other precious metals may decline versus the dollar, which would adversely affect the market prices of the securities of gold and precious metals producers. The Fund may also invest in foreign securities which involve greater volatility and political, economic, and currency risks and differences in accounting methods. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. Prospective investors who are uncomfortable with an investment that will fluctuate in value should not invest in the Fund.
Funds are distributed by Northern Lights, LLC, FINRA/SIPC. Orrell Capital Management, Inc. and Northern Lights Distributors, LLC are not affiliated.