| Gold’s jumping higher again today, up about 1.5% as I write, with silver doing a bit better than that.
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| The result is this: On the continuous contract basis that most analysts use, gold has...seemingly out of the blue...achieved the eye-popping $2,500 benchmark.
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| It’s a surprising move and analysts searching for catalysts are being left scratching their heads. The U.S. stock market is mixed, the Dollar Index is flat and Treasury yields, while lower, haven’t moved much.
The PPI and CPI are coming out over the next couple of days, but who’s to say these days how the markets will interpret those data?
Well, I’d bet that — regardless of where the numbers come in — they’ll be interpreted as bullish for gold.
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| My late, great friend Jim Dines often offered the above admonition from a podium, as he gestured emphatically toward a chart showing a powerful uptrend.
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| His point: Don’t try arguing with the market. Listen to what it’s telling you.
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| Right now, gold is telling us it wants to go higher. And it’s doing so regardless of what the other markets or factors are doing.
Importantly, as you can see below, gold simply keeps making higher highs and higher lows.
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| Since mid-April, after a torrid six-week run that ignored gravity, gold has been trading in a “normal” bull-market fashion. It has had digestive corrections after every big move, and has moved beyond those declines to reach new, higher levels.
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| It has done this during periods when the U.S. dollar was weak and when it was strong. It has forged higher when U.S. Treasury yields were falling and when they were rising. During stock market weakness and strength.
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| The lesson, again, is to listen to what gold is telling us. And then...find the best ways to leverage the trend.
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| The Big Opportunity That $2,500 Gold Has Created
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| One of the strategies that gold and silver bugs have used to leverage a metals bull market has been “optionality plays.”
These are companies with a business model of acquiring large resources of gold or silver in the ground while prices are too low to make those projects economic to develop...and to then enjoy the re-rating of those resources as metals prices rose above the line of economic viability.
My mentor and business partner Jim Blanchard pioneered this approach in the early 1990s. I vividly remember meeting with Jim and a young upstart named Rick Rule in 1993 as we strategized this reorganization and financing of Silver Standard.
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| Gold Newsletter subscribers at the time were naturally among the first to discover this new opportunity...and they reaped gains as high as 40x as a result.
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| Now it seems like there are similar opportunities afoot in the current market.
You see, the $500 rise in the gold price this year has quietly transformed some gold projects that had been considered “out of the money optionality plays” into “in the money” plays.
And in some cases, not just in the money, but well in the money...and achievable.
Yet the market has, generally, not repriced these plays accordingly. I’ve been looking at a few of these companies in recent weeks and pulled the trigger on one of the higher-profile ones in our current issue of Gold Newsletter.
The key to these opportunities is not only their upside potential (in my opinion, they could be 10x or more winners as gold keeps rising), but also their relative risk.
Because they’ve already found massive gold and/or silver deposits, and advanced them past a number of development risk points, their downside potential is much less than earlier-stage plays.
In short, you can get the upside potential of a discovery play for much less risk.
As I noted, I’ve just recommended one of the best of these plays in the current issue of Gold Newsletter.
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| The cost to subscribe for a full year of Gold Newsletter is so far less than the potential gain from this one recommendation that...well, I can’t imagine why a serious investor wouldn’t seize the opportunity.
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| With gold surging higher, I urge you subscribe now to discover this remarkable opportunity now.
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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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| CLICK HERE to watch interviews by Brien Lundin and Kai Hoffmann with many of today's most exciting junior mining companies on the
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