Rest, Recovery And Rebound

Unlike the post-quarantine global economy, the future for gold and mining stocks appears positive and certain.

Dear Fellow Investor,

Gold’s up today, after being down yesterday, down the session before that and up big the session before that.

You get the idea — gold has been trading sideways since about mid-April, digesting that amazing rally in the first two weeks of the month. It’s been a typical consolidation over recent trading sessions, and milder than what I would’ve expected.

From a fundamental standpoint, it’s been impossible to get a handle on what’s driving the market lately, especially as the moves in the gold price have generally been mild, albeit punctuated by occasional bursts higher or lower..

Last Friday, the nonfarm payrolls report for April put a number on the massive job losses that we’ve been expecting, showing a decrease of 20.5 million jobs. While that was bad, and especially bad for those who were directly affected, it fell short of the consensus expectation of 22 million..

So gold sold off (interestingly, silver rose)..

As I write, gold’s up about $4 today, rallying because...well, no one really knows, to be frank. And anyone who tells you they’re certain why is either deluded or untruthful..

Yes, the CPI number came in this morning showing that prices were down by 0.8% in April, with the core rate (minus food and energy, which have been especially volatile recently) was down 0.4%. The headline number was right at consensus, but the core rate was double the expectations, which is why the gold price dipped into the mid-$1,690s..

But it’s rallied since then, as I mentioned. And for no apparent reason..

Which is good. Because it indicates that gold’s natural bias right now is to the upside..

Perhaps investors in the paper gold market are finally beginning to assess the inescapable repercussions of the current unprecedented monetary stimulus..

As I noted in a Gold Newsletter Alert last week, the Fed has dialed back its balance-sheet purchases to between $60-$80 billion a week and, compared with the weekly purchases of over $500 billion in the early days of the crisis, it might seem that they’ve taken their collective foot off the gas pedal..

But then you realize that the initial three rounds of post-2008 QE — which took gold to over $1,900/ounce — were comprised of monthly securities purchases equivalent to what the Fed’s now buying each and every week.

And just today, the Fed is beginning to buy $750 billion in corporate debt, initially via ETFs, but then direct purchases of corporate debt, including some junk debt..

Last week I detailed the massive spending and stimulus response so far, and how that’s projected to take this year’s budget over $3.5 trillion. And again, this is just the first wave of stimulus. There’s plenty more to come.

So while gold is resting for now, its eventual rebound — and rise to new record heights — seems inevitable.

And I’m going to tell you all about it this Thursday, when I’m going to get into more detail on how quickly all of this stimulus has come about, how much more is in the pipeline and what it all means for gold, silver and mining stocks.

Save

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Join Me In The Virtual Metals Investor Forum

I’ve been pleased to participate in the Metals Investor Forums put on four or five times a year by a few of my long-time friends in the junior mining sector. As with many other live events, this post-Covid world has forced them to go on-line only.

I’m participating in their second Virtual Metals Investor Forum this Thursday, and it’s going to be an exciting opportunity for you to hear not only my latest market views, but also those of my friends Gwen Preston and Jay Taylor.

Not only that, you’ll get information-packed presentations from many of our recommended junior mining companies.

It’s a one-stop shop for the junior mining speculator.

This virtual MIF is being held this Thursday, from 9:30 to 4:30 Pacific time. That may seem like a long day, but the beauty of a virtual event is that you can check in and out as you wish.

My scheduled presentation time is 2:30 Pacific. After my presentation I’ll introduce representatives from Chakana Copper Corp, Blackrock Gold Corp, Group Ten Metals and Gold Terra Resource Corp to give their updates, and then we’ll have a lively Q&A session.

It’s going to be lots of fun, but immensely valuable too as this new metals bull market gains steam.

And since it’s free of charge, there’s no excuse not to register for it now. Just click on the link below, and I’ll see you Thursday!

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference

CLICK HERE
To Register For
The Virtual Metals Investor Forum
Featuring Gwen Preston, Jay Taylor and Brien Lundin

May 14th, 2020 – 9:30 - 4:30 Pacific