The metals and mining sector is rife with rampant despair these days. History tells us this is when we should consider buying — but is this time different?

June 29, 2022

Dear Fellow Investor,

I’ve had a busy few weeks of conferences and webinars, during which I’ve been asked by hundreds of investors for some ray of hope for gold...some cogent commentary on why the metal isn’t hundreds of dollars higher given the current red-hot inflation rates.

As you can imagine, my response — essentially, “It could be worse” — hasn’t been well received.

But the point remains, gold has outperformed virtually every other asset class by simply not dropping through the floor in recent weeks. Albert Einstein said it best when he said that “everything’s relative”...although I believe his words were received better than mine.

As to why gold isn’t trading a couple hundred dollars higher than today’s levels, I do believe the Ukraine crisis inserted a lot of noise into the signal and essentially neutralized a gold rally that was already underway as the Fed was beginning to hike rates.

And on top of that, the Fed’s level of hawkishness and determination to tighten was, more credit to them, surprisingly strong. That took not only the metals but every other financial market aback.

As to where we stand now, I have noted that gold has been hurt progressively less, even to the point of benefiting, as the big sell-offs in equities have paraded through since early spring.

On that note, I’ve also had lots of investors and interviewers ask me if this is the bottom. My reply is that it feels like a bottom, but maybe not the bottom. Generally speaking, it’s a great time to invest in quality companies with staying power (read: cash), although I haven’t been advising anyone to jump in head-first just yet.

That time may be coming, however.

You see, right now an investor can buy companies with large, identified resources, even some with economics applied, for small fractions of what they would normally sell for. In other words, many of these companies would justifiably sell for three, four or even five times their current levels if the junior mining market would return to only normal levels of valuation.

So, for far less risk, you have the potential for drill-hole discovery types of returns from much more establish, conservative companies. You are, in effect, betting on a return to normalcy in the junior mining market, but that’s usually a better bet than a big hit on a drill hole.

You’ll find lots of these types of companies in our Gold Newsletter portfolio, and I’m adding another one in our July issue, which will be dispatched to subscribers tomorrow.

This new recommendation, one of two exciting additions in tomorrow’s issue, is a company that is outlining close to a million ounces of ultra-high-grade gold, and the market correction has brought it down to clearance-sale levels. I’m talking about drill hits like over 6 meters of 577 g/t gold — and the drills are about to turn at this very moment to find more results like this.

These are the types of opportunities that we historically find at the lows of a metals and mining cycle. Whether this is the very bottom or not, it’s hard to imagine going wrong over the long term by buying companies like these at current levels.

So look out for tomorrow’s issue of Gold Newsletter to get the details on these exciting new recommendations.

And if you’re not already a subscriber, just CLICK HERE to make sure you get our July issue tomorrow.

All the best,

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