Some top-quality junior mining stocks are on sale...but the opportunity might not last much longer.

December 22, 2021

Dear Fellow Investor,

If you’re like me, you’re distracted right now with all the holiday hoopla combined with a great desire to just relax with the family after another strange and hectic year.

However, this is the time we need to focus — at least for a little while — on the junior resource market.

That’s because the typical tax-loss season is coming to a close (in fact, it looks like it’s already ended as some of our favorite companies are already beginning to move higher).

The bottom line is that there are still lots of great junior mining plays selling for what seem to be bargain-basement prices.

History tells us that often (although not always), those who buy at the depressed levels usually in effect around this time of the year can get a head start on a strong new-year market. In some cases, quality companies bought at late-December prices can double by late January.

Again, there’s no guarantee this will happen this year. And in fact, it didn’t work last year. But if you subscribe to the long-term bullish view on the metals that I do, then buying quality companies at current levels should pay off handsomely at some point.

Of course, this strategy is based on a seasonality pattern that ignores the current market environment, which is still mixed.

As you can see, gold stabilized after the sell-off on Jerome Powell’s renomination, bouncing off of the support around $1,765. It then retested that support successfully last week after the Fed’s December meeting confirmed expectations of about three rate hikes next year, leading to another quick decline.

The latest Omicron-spawned market shudder on Monday gave the metal a little boost, but there’s no clear short-term trend evident in either direction.

Whether gold breaks out of the range it’s been trading in, roughly between $1,765 and $1,835, anytime soon remains to be seen. That will depend upon the market’s acceptance of the upcoming Fed rate hikes, and I believe that shift in sentiment is underway.

Regardless, if the Fed is able to begin raising rates sometime in the second quarter of next year as expected, then that should serve as a launching point for the metals (again, if past form holds true).

Taking everything into consideration, I think the best bet for a market catalyst right now is the typical rally that begins in late December and extends into the new year. Again, we didn’t get it last year, but we got a nice early-year rally in 2020, just before Covid hit.

Personally, I’m going to bet on it happening this year, with the view that my downside is that I’m still getting some good companies at decent prices even if the short-term rally doesn’t materialize.

If things play out as I expect (and hope), then we’ll see most of these companies trading at higher levels a month or two down the road. But I also expect them to trade at much, much higher prices a year or two from now, so that’s a good longer-term speculation even if this short-term bet doesn’t work.

If you want to see our top buys in the junior mining sector, along with my views on the current market along with extensive excerpts from our recent New Orleans Conference, you need to read our special year-end issue of Gold Newsletter.

If you aren’t already a subscriber, you can get this special issue — which alone is worth the entire price of a year’s subscription — by CLICKING HERE.

All the best,

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