| As wars go, that was either the shortest or longest in U.S. history.
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| The U.S. involvement in World War II lasted just short of four years; its war with Iran has officially lasted just short of four months.
That sounds like a much better war...although some may argue the conflict with Iran has been ongoing for 47 years and remains in effect.
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| I’ll leave the geopolitical analysis to others. Because as I noted here on Monday, the one thing that is unarguably true is that a resolution — apparently any resolution — is what the risk asset markets have been waiting for.
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| And as you may have noticed, gold is now lumped in with risk assets as far as Western traders are concerned.
So...putting aside all the death and destruction...peace is also good for the markets.
After jumping about $100 on Monday, gold gained another $22 yesterday and is up a similar degree today. Silver has rallied from last week’s decline to the low $60s and has now peaked back above $70. The gold stocks have leveraged the gains in the metal and seem well along the road to recovery.
As you can see from the accompanying chart, the gains this week were sorely needed after last week’s big sell off that took gold below its 200-day moving average and through the bottom of the trading channel that had maintained for months.
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| So with gold now firmly back in the channel, is the bottom behind us?
That would depend on whether this latest deal is in fact real. From what I’ve seen of the terms, it seems that it certainly isn’t the last deal, with more to be negotiated over the next few months...and perhaps years.
Regardless, it’s a much-needed respite for now. And while I remain very confident in the long-term prospects for metals and miners, driven by the irresistible pressures of mountainous debt loads, the near-term is as uncertain as ever.
We are presently mired in the worst seasonality for the metals, although I’ve found that gold often bottoms sometime between mid-July and mid-August. So if this peace deal goes through, and absent any other adverse events, my feeling is that we’ve reached the nadir, but may have another month or two before the next rally begins in earnest.
Today’s Fed meeting result should support the rally in risk assets. Newly installed Chairman Kevin Warsh won’t raise rates as he should given the inflationary pressures, so his rhetoric will be all-important.
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| Add it all up, and this is the time to position ourselves for the next leg up in metals and miner.
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| For the juniors that we focus on in Gold Newsletter, the exploration season is now in full swing, drills are turning and results are starting to come in.
One of our top picks was up 55% yesterday alone!
I can’t stress it more highly: If you want to participate in the historic wealth-building gains of this bull market, you need to be an active Gold Newsletter subscriber.
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| To make the decision easier for you, I’m going to institute one of our rare sales — if you subscribe within the next two days, you’ll enjoy a 30% discount.
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| So click on the link below to join our family of happy subscribers now, while this opportunity lasts.
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| Brien Lundin
Publisher, Gold Newsletter
CEO, the New Orleans Investment Conference
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| CLICK HERE
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