Gold’s weakness today, despite the big sell-off in the stock market, looks like an opportunity.

September 3, 2020

Dear Fellow Investor,

Gold’s price line today looks like an EKG, as the metal has been pushed back and forth, buffeted by swirling currents of the markets.

It was sold off early, rebounded into the green, then bounced around some more before, at this writing, settling back into the red.

And of course, this has been par for the course over the last few days, as the metal has been generally weak in response to recent developments.

The list of factors impacting gold (and the markets in general) over the past few days — as well as today and tomorrow — are interesting. Let’s look at a few:

• A big sell-off in the U.S. stock market today, with the Dow down about 3% and the S&P nearing a 4% loss…

• A highly-touted rebound in the Dollar Index (which is being touted again today, although the index is essentially flat)…

• Positive buzz on the Covid-19 front, with talk of imminent vaccines and herd immunity…

• Tomorrow’s eagerly awaited nonfarm payrolls report for August, which promises to have an outsized impact on these nervous markets…

• Grid-locked negotiations in Congress for further pandemic stimulus measures…

• And, as I write, Fed president Charles Evans is coming out (I’m sure merely coincidentally with the stock market drop) with statements predicting more Fed QE and other measures in the absence of a fiscal stimulus response from Congress.

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What Does All This Mean For Gold?

So what does this mean for us and our investments in gold, silver and mining stocks?

The easy answer is, “not much.” In fact, that’s one of the themes that came out of my first Private Zoom Call with Rick Rule and Brent Cook, which registrants for this year’s New Orleans Investment Conference could listen in on. (If you register here, you can also gain access to the recording of this call and participate in our upcoming calls with other top experts.)

Rick and Brent agreed with me that these short-term fluctuations in gold and silver are not only nothing to worry about…they’re also nothing to bother even tracking.

We are in historic times — a period when the amount of monetary expansion and fiscal stimulus will overwhelm all other factors to propel gold and silver to much, much higher levels over years to come.

In light of these factors, watching these day-to-day fluctuations will, in Rick’s words, “make you crazy.”

Worse, they could convince you to abandon the sector and miss an opportunity that could create generational wealth.

Instead, we need to keep our eyes on the big picture, and how short-term brush strokes are actually contributing to that landscape.

Consider the final item in my list above — how the Fed is already rushing to assuage the markets in the fact of today’s big drop.

Do you really think Powell and Co., who have scaled back their money-printing efforts since the early big rush, will now stand idly by and allow their house of cards to come tumbling down?

The stock market is telling them right now that it needs another shot of monetary adrenaline, and you can bet the Fed will act as ordered in due course.

And this will, in turn, provide another boost to this gold market.

In short, while I continue to believe that the most likely course forward is another month or two of consolidation in gold, we could break upward at any moment.

That means weakness like we’ve seen over the past few days is a buying opportunity. And one we should take advantage of.

All the best,

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

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