It didn’t take much to spark the metals today — and that’s evidence that both the fundamental and technical tides have turned back in favor of gold and silver.

May 3, 2021

Dear Fellow Investor,

Gold and silver spent the last couple of weeks in a holding pattern, after posting a very nice rally off the March 30th bottom.

That holding pattern was enough to get gold bugs despondent once again, but they are in a much better mood today.

As I write, gold is up $25 and silver is up about a full dollar.

It would be easy to place credit, at least for silver, to the coordinated silver-buying campaign executed over the weekend and organized by the WallStreetSilver crowd.

While I applaud those efforts, the precipitating factor for today’s move seems to have been the April ISM manufacturing index report, which came in at 60.7. That was not only well below the expectation of 65, but also four points lower than last month’s number.

Importantly, prices paid surged. As Peter Boockvar notes, “prices paid accelerated by another 4 pts to 89.6 (ranges from 0 to 100), the highest level since July ’08 when it was above 90 when a barrel of crude oil was near $150. All 18 industries surveyed saw higher prices.”

It was a great recipe for today’s lower Dollar Index, falling bond yields and higher metals prices. But, as I discuss in this month’s May edition of Gold Newsletter, both the fundamental and technical pictures have dramatically improved for gold.

Fundamentally Powerful

You’ll remember that my case for considerably higher gold and silver prices over the coming years rests upon the foundation of out-of-control debt.

That case has been bolstered in recent days, thanks to the apparent abandonment of any sense of fiscal prudence in Washington.

Yes, I know, there never was much in the first place. But now whatever there was has vanished.

I talked about this in last Monday’s Golden Opportunities, so I won’t rehash the details. Suffice to say that multi-trillion-dollar spending ideas are flowing out of Washington like the Mississippi River flows past my home.

The Biden administration is now not only very comfortable with the trillion-dollar level, they’ve embraced it as a necessary benchmark to prove their seriousness. They’re not even waiting for their proposals to pass or even get debated before running another multi-trillion-dollar scheme up the flagpole.

In short, it’s an improving fundamental environment for gold. From a monetary standpoint, it’s about as good as one could possibly imagine.

Now let’s look at the technical picture….

Technically Speaking

In this month’s issue of Gold Newsletter, I feature two very important charts of gold.

The first is a long-term price chart that shows a powerful “cup-and-handle” formation for gold extending back to the 2011 highs.

Gold seems to have been drawing the “handle” part of this formation over the past few months, portending an imminent break-out to the upside.

Our second chart, of gold’s 14-week stochastic, shows that this break-out may be happening at this very moment. The momentum indicator has turned upward again, from a double-bottom, and has just generated a “buy” signal.

Importantly, I note that the previous instances of such a formation, dating back two decades, always marked a major, years-long rally in gold.

You get the gist: This could be the turning point we’ve been waiting for.

In another example of perfect timing, I also unveiled no less than three exciting new mining stock recommendations in our May issue:

• A company that has secured a mine, a gold resource and two exploration projects in one of the most prospective regions of Mexico.

Better yet: By this time next year, the company plans to be producing gold at a rate that will generate free cash flow worth about the same as its current total market value! The case for a dramatic re-rating, very soon, is undeniable.

• Another company on the fast-track to production…at a rate that will produce free cash flow worth more than its entire market cap! But get this: the company boasts an incredible 60-year mine life, and a 30-kilometer exploration trend, so its growth curve looks to be nearly exponential.

Again, the market has completely overlooked this gem…but our Gold Newsletter readers are snapping it up right now.

• And finally, this over-looked bargain: A company that boasts nearly three million ounces of gold resources, C$18 million being spent on exploration, a new gold project with hundreds of historic drill holes…

…And dozens of high-potential drill-hole results on the way. This is yet another opportunity the broader market is currently missing.

Save

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With gold and silver taking off at this very moment, I doubt that it will be long before the market catches up to all of these over-looked junior mining plays.

If this rally keeps up, there is no doubt that many companies could double or more in value over just the next few days.

I strongly urge you to act now to make sure you’re positioned.

All the best,

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

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