The markets are telling the Fed to lay off, and it’s only a matter of time before it listens.

October 4, 2021

Dear Fellow Investor,

It seems like gold bulls have been caught in a crossfire.

On one side are investors believing that the Fed actually can taper QE and is going to start doing so soon.

On the other side are those who don’t believe the Fed’s contention that inflation is transitory, and probably also doubt the central bank can do anything about it.

History shows that both camps should be buying gold. But in today’s world where every trading decision is viewed through a prism of Fed monetary policy, investors at both ends of the spectrum have instead been sending Treasury yields higher, buying the dollar and selling gold.

Until very recently, that is, as these trends are being reversed today.

In short, we’ve received another lesson that, while the ultimate destination for the markets is as obvious as ever, the path to it will continue to have some unexpected twists and turns.

Timing Is The Hard Part

At many of our events over the years, I’ve publicly complimented my friend Rick Rule on being the “original uranium bug” long before everyone else jumped on the bandwagon in the 2000s.

To which Rick characteristically always replies to the effect of “In investing, the synonym for ‘early’ is ‘wrong.’”

I’m reminded of this when I look back at our September issue of Gold Newsletter in which my lead article featured the headline “Turning The Corner”...with a deck claiming “The only thing uncertain about gold’s next rally is the timing.”

I guess I wasn’t technically wrong, which is of course an important goal of investment punditry. But in all frankness, I didn’t expect the kind of performance we’ve seen from gold over the last month.

To be fair, when I was writing that issue of Gold Newsletter, gold had begun another halting recovery, and the markets were trying to digest the data showing yet another month of around 5.4% annual inflation. So perhaps I can be forgiven for believing that evidence of higher, un-transitory inflation would prompt investors to buy gold.

That would be the reaction in a more normal, or sane, market environment. But in today’s world, hot inflation numbers lead traders to contemplate Fed tightening...and in their algorithms Fed tightening translates as “sell gold.”

Never mind that, by virtue of the simple mathematics surrounding such a monstrously large federal debt, the Fed can’t tighten monetary policy much at all, if at all. And never mind that a depreciation of the dollar — which is what inflation is — means gold should trade higher, not lower.

Because today’s investors, or at least those betting on the futures exchanges, don’t care about value, common sense or reality. They only care about the trade that’s going to work over the next few days, hours or even minutes.

I could go on for pages analyzing the psychology of today’s investors and the dysfunction of the futures exchanges. But I’ll suffice with the observation that these paper markets are merely bets on where the referenced markets are heading in the very near term, and have no relation whatsoever to the supply/demand dynamics of those markets, whether they be commodities, stocks or bonds.

Yet...and this is the important point...these futures exchanges with no connection to the realities of their referenced markets set the prices for those markets.

So they create their own realities.

It would be like the Vegas betting odds on a football game determining the score of that game. No need to even play the game; we’ll just book the profits and losses and all the fanfare.

Anyway, rant over. The reality is that gold, silver and our beloved and benighted mining stocks slipped even deeper into the dumps over the past month.

...Until last Thursday, when gold leaped $30 as the stock market delivered another message to the Fed to lay off any plans to tighten.

The stock market has continued to deliver that message, notably today, and gold has continued to gain ground.

All of this brings me back to my original point: I remain convinced that gold is going to rebound — it’s the precise timing that’s the hard part.

In our just-issued October edition of Gold Newsletter, I examine the factors that drove gold during September...and those that are now presenting the promise of a turn-around.

But here’s what may be the most interesting part of this month’s issue: I detailed an extraordinary gold miner that just concluded a transformational new deal.

In short, this aggressive company has emerged as the next big gold producer in Nevada...and I think it’s on a track to become a major gold miner over the months ahead.

Its share price has begun to take off since we first recommended it in Gold Newsletter.

But the good news is that this is a multi-bagger in the making if the company achieves even a fraction of what I expect it will.

I reveal all the details on this exciting opportunity in the October edition of Gold Newsletter.

Get It All Now...

You can learn all about this red-hot gold mining play by subscribing to Gold Newsletter now.

To get a full year of Gold Newsletter…and get immediate access to our exciting October issue packed with valuable investment intelligence and details on dozens of exciting junior mining plays…simply CLICK HERE or on the link below.

I strongly urge you to act now to discover this new recommendation and get positioned.

All the best,

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

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October Issue Of Gold Newsletter