Don’t try to figure out the daily swings of these markets — especially gold and silver. Just keep your eyes on the horizon.

February 24, 2021

Dear Fellow Investor,

You’re going to go crazy trying to figure out where the markets are headed over the next few days.

And you’re likely to get very rich betting on where they’re going to head over the next few years.

That’s really the crux of the matter facing us right now. Consider the strange goings-on in the U.S. stock market over the last week of trading, as the Dow and the S&P 500 trendlines have resembled an EKG…while the Nasdaq posted a string of losses and looked like it was about to code.

Gold, on the other hand, had been doing fairly well, in recovery mode as the dollar had been weakening and 10-year Treasury rates took a break from their rapid ascent.

That changed this morning as, unsurprisingly, gold took a swan dive just as U.S. trading opened.

That move, and especially the timing, certainly didn’t surprise gold bugs. It’s a long-established pattern, after all. At least this time there were some drivers to quell the conspiratorial speculation, as the dollar and Treasury rates were rallying.

Still, that was little comfort as gold was sold off by nearly $25 in a flash.

What was really surprising, though, is what happened next…

A Big Rebound

Simply put, gold bounced as quickly as it had fallen, and nearly as much.

As I write, the yellow metal is only down about $5.00. And silver, which has been out-performing gold, made an even more-dramatic move into the green.

Especially worthy of note is that copper has continued its torrid run higher. As you might remember, we called a new bull market in copper last July. The price is up about 30% since then and shows no signs of stopping.

The good news is that the junior copper plays have yet to respond to this move and now represent tremendous values. (We’re covering this sector in Gold Newsletter, so subscribe here if you want to get positioned.)

But here’s the most important point I want to make: Ignore all these daily swings.

If you want to profit from the mega-trends at work in these markets, and protect your wealth from the inevitable forces that will eat away at assets over the coming years, you need to keep focused on the horizon.

Don’t worry about where gold, silver and mining stocks will be trading tomorrow or the next day. Instead consider where they’ll be trading next year and the year or two after that.

Pulling out just a bit from today’s action, we need to remember that gold (as I noted on Monday) bounced off of that key 300-day moving average. As you’ll remember, this level served as strong support throughout the long and very profitable bull market of the 2000s.

Looking out further, we can see that the trends of massive money and debt creation are not only continuing, but accelerating.

With about $5 trillion already spent, the $1.9 billion stimulus package about to clear Congress is taking everything to another level.

Over the weekend, the details in the 600-page bill were finally revealed and, as a report out this morning from the Foundation for Economic Education shows, the goals of this bill have little to do with the pandemic recovery.

Instead, the spending spree is aimed directly toward the social and economic wish list of the new administration. And as such, you can bet that the appetite for more spending will not abate if and when we see an economic recovery.

Unrestrained spending is the new normal…as will be the repercussions.

And those repercussions, of course, will include a very significant depreciation of the U.S. dollar with a corresponding increase in the prices of gold and silver.

So you simply must own the metals to protect your assets as this inevitable currency depreciation progresses. And you should own high-quality mining stocks if you want to build your wealth by leveraging these trends.

All the best,

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