Fear And Greed

Gold rocketed to $1,600 today. Almost everyone thinks it’s due to safe-haven buying as fears spread as quickly as the coronavirus itself.

But no, the real reason for gold’s surge has more to do with greed than fear.

Dear Fellow Investor,

I want to let you in on a little secret that I shared with my exclusive Gold Newsletter Alert readers last week.

But first, a quick market update: Gold soared today — up over $20 to poke above the key level of $1,600.

Importantly, silver and the gold mining stocks are outperforming gold itself, indicating that this is a move with some legs to it.

Frankly, I think the next stage of this year’s big rally has begun, and I’m targeting significantly higher levels. My friend Ron of TheChartStore.com is pointing to an inverted head-and-shoulders pattern that projects to $1,665 as the next target for gold.

We could get there very quickly...and the prices of our recommended junior mining stocks could catapult higher in reaction.

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Now Here’s The Secret...

Everywhere you look in today’s market commentary, you’ll see today’s big spike in gold explained as safe-haven buying due to fears over the spread of the coronavirus.

I’m not here to belittle the potential impact of this epidemic. It’s serious. The implications for lives around the world are frightening, and it’s anyone’s guess at this point as to what the ultimate effects will be.

But the economic effects are already severe. Some Asian nations, and very likely China foremost among them, will be forced into recession. The U.S. will undoubtedly suffer as well.

And this is the source of the “secret” that I shared with my Gold Newsletter Alert readers last week: What’s driving gold right now isn’t fear. It’s greed.

You see, investors aren’t buying gold hand-over-fist today because they’re worried about a greater economic fallout from the coronavirus. No, they’re buying in anticipation of the flood of central bank stimulus that is all but guaranteed by the effects to date.

Yes, further bad news from the spread of the virus will help boost gold. But I think investors should remember that the U.S. markets were already searching for some excuse to demand “more cowbell” from the Fed, and this epidemic is providing the perfect justification.

Have no fear, the Fed is going to obey the markets and provide the rate cuts and QE that they’ll demand. They have no choice, because after over a decade of stimulus, they’ve transformed the U.S. economy into the stock market.

The bottom line is that money is going to get even easier, and cheaper, in the weeks and months just ahead. And that’s going to light a rocket under gold, silver and junior mining stocks.

If you’re not positioned for this big move, it’s not too late to get on board.

All the best,

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

P.S. If you’d like to join our family of Gold Newsletter Alert subscribers and get my weekly insights on the metals and mining markets — including my late-breaking specific stock picks — CLICK HERE to get all the details on subscribing.