The gold breakout — what’s next?

You are receiving this message because you have specifically subscribed to Golden Opportunities, have purchased a product or have registered for a conference with us or with one of our partners. If you'd rather not receive emails from us, please click the link at the bottom of this page to unsubscribe from our database. Remember your personal information will never be rented or sold and you may unsubscribe at any time.

Contact Us | Privacy Policy | View in Browser | Forward to a Friend

Gold Breaks Out

I’ve been talking about how gold needs to show a full-blown breakout before the generalist investors would flock to the market.
 

Well, we’re there now...so where are they?

I’m just back in my office after a whirlwind week in Toronto attending the Metals Investor Forum and the big PDAC mining conference, back to back.

If you’ve been watching the red-hot gold and silver market, you know I’ve got lots to talk about.
 

But first let’s set the stage....
 

As you’ll remember, one of my big themes is that markets don’t care where the price of an asset is at the time, they care where it’s going.
 

In regard to gold, until very recently this is what generalists saw when they looked at the price chart:

In other words, they saw an asset that wasn’t going anywhere soon. In fact, gold seemed to have impenetrable resistance at a $30 trading range between $2,050 and $2,080.
 

As I put it in my Golden Opportunities issue on February 21st:

“...we need to prove that gold has truly broken out before we can expect those generalist, trend-following Western investors — who have been ignoring gold so far — to jump in.
 

In my opinion, that means we need to break decisively through $2,100 to show that the current move isn’t just another top and failed breakout.

Which brings me to the second piece of good news: That $2,100 level is within spitting distance. We could get there in a day’s trading, given the right circumstances.
 

And those circumstances seem directly ahead. While the markets are now arguing over when the Fed’s first rate cut will come and how many there will be this year, the big story is that we’ve progressed from the most severe hiking cycle in Fed history to a rate-cutting cycle.
 

That means we’re about to get a tremendous tailwind for gold, silver, mining stocks and “things” in general.
 

And that’s why this is truly a generational opportunity in junior mining stocks.”

Well, it actually took two day’s trading to get there, but now we’ve gotten there and beyond.

Where Now?

I presented the chart above, and my view that $2,100 was the next key level, in my morning presentation at the Metals Investor Forum last Friday. At that time, I also hedged those views a bit, noting that maybe we needed to get to $2,150 before the generalists would take notice of gold.
 

I also stressed that gold had bottomed, and a number of factors, including a collapse in open interest on Comex, were predicting an imminent turn-around.

I didn’t know how imminent it would be — within minutes of my stepping off the stage, the gold price began to skyrocket. By that afternoon, it was up $40. (And I was trying to figure out how I could take credit. 😉)

Still, the many investors and junior mining execs that I talked to that day refused to let themselves get caught up in the moment. Wait until Monday, they rightly noted, and let’s see if Mr. Slammy has his way with the gold price.
 

It didn’t happen. Gold took off again on Monday, gaining another $30. And it added more yesterday and is taking off again today as I write. Let’s update that chart now and analyze what the generalists are seeing now....

Granted, I’m biased...but that looks like a clear breakout to me.
 

Also, take note that the chart above tracks the continuous active contract price, not the spot price that I typically use. That said, gold’s up about $14 to $2,144 as I write, while the active April contract is at $2,153.
 

In other words, we’re essentially now at the $2,150 level that I was hoping for.
 

So where are the generalist investors?

It seems like they’re on the way. Open interest on Comex has jumped over the past few days and the GLD ETF has added to its holdings. These are the best proxies we have for U.S./Western gold demand.

If Western investors — who are typically trend-following — join the central banks and Chinese buyers, this new bull run in gold could be the most explosive we’ve seen since the late 1970s.
 

The good news is that it’s not too late to get on board.

Some Take-Aways From The Big Mining Conferences...

As you can imagine, during and after my week at the big Toronto events, I was peppered with questions about my impressions and any new opportunities I might have uncovered.
 

Mostly, I got even more excited about some of the recommendations already in our Gold Newsletter portfolio. I’m going to be writing about four in particular that I want to buy more of, personally, immediately.

And then I made one amazing new discovery: A company that I believe will soon show the market a high-grade, multi-million-ounce gold deposit. And it’s in Nevada!

It’s got an ultra-tight share structure, which means it could soar on good news...and I think the news it’s going to deliver is going to be nothing short of extraordinary.

Looking at the bigger picture, we’re seeing some of the big miners jump higher in response to the tremendous rally in gold and silver, but the juniors are still on the launching pad.

I can’t urge you strongly enough to get positioned in the best of these plays while you still can. To do that, you absolutely need to subscribe to Gold Newsletter if you’re not already. (Just click on the link below.)
 

This is what we’ve been waiting for — and we’re preparing to make a lot of money as gold keeps going further into uncharted territory.

All the best,

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

CLICK HERE
To Subscribe To
Gold Newsletter Now