Flipping The Script

Only a few weeks ago, every factor seemed stacked against gold. After only a matter of days, it seems they’ve all shifted in favor of the metal.

Dear Fellow Investor,

As gold bugs, it seemed everything was working against us. Think back to just a few weeks ago.

• The Fed was dead-set on at least three rate hikes next year, as interest rates were still a “long way” below neutral.

• The stock market was rebounding strongly from the tumultuous sell-offs of October and early November.

• The U.S.-China trade war was at an impasse. In fact, President Trump was raising the stakes with crushing new tariffs.

• On that back of these developments, the U.S. dollar had powered to 18-month highs and seemed poised to go higher.

Given all of this, there was no surprise when, in mid-November, gold’s rally came to a screeching halt and the price dove back toward support around $1,200.

There was no joy in Mudville. In fact, it seemed as if the typical December price slide had begun early. And my prediction that the Fed’s rate hike campaign would end by mid-year 2019 seemed foolish.

But fast forward to today, and every one of those factors has done a 180º turn in favor of gold....

• The Fed has signaled that we may be just one more hike away from a neutral interest rate...leading many to doubt whether we’ll have any rate hikes next year at all!

• The stock market is once again showing persistent weakness. The one-day sugar high of a seemingly positive Trump-Xi meeting over the weekend has already faded, with stocks renewing their slide today.

• Although there’s plenty of well-founded skepticism regarding the real impact of the U.S.-China trade “cease-fire” agreed to over the weekend, there’s no question that tensions have eased.

• And while the story remains to be told, the U.S. dollar rally has paused. The greenback still cannot build upward momentum.

Golden Opportunities continues below...

And of course, there’s the most important development: The gold price is rallying.

While the sugar high of easing U.S.-China tensions has faded for the stock market, gold continues to build upon yesterday’s gains. It’s added about $15 so far this week and is now challenging persistent resistance around the $1,335 level on a spot basis.

If this keeps up, my prediction that gold would weaken going into the Fed’s December 19 meeting, and then begin rallying immediately in its wake, will be wrong.

...Because gold would have begun the rally as of yesterday.

The good news is that the best junior gold stocks are still caught up in the tax-loss selling downdraft. There are bargains galore still to be had.

As I’ve been saying, there’s a consistent pattern in place since 2015 wherein the gold price slides going into a December Fed rate hike, and then begins a strong rebound shortly thereafter.

In 2016 and 2017, the rallies that followed those year-end rate hikes multiplied the prices of high-quality junior gold stocks. I’m talking about junior explorers/developers with large gold resources already identified.

These companies offer the greatest and most immediate leverage to a quick rally in gold.

Whether we’ll see another big move like in early 2016 and early 2017 remains to be seen. The early-2018 rally lasted only about a month, providing gains that were still very good, but nowhere near like what we saw the previous two years.

So we eagerly await what the market will serve up this time. If past form holds true, it’s going to be better than a stick in the eye...and could be spectacularly profitable.

In the next issue of Gold Newsletter, our big year-ending double issue that will feature extensive coverage of the recent New Orleans Investment Conference, I’m going to feature a list of my top recommendations to take advantage of this powerful year-end pattern in gold.

That issue will be published next week. If you’re not already a subscriber and want to get it, CLICK HERE.

But whatever you do, act now to get positioned for the next big move in gold. Time’s a wasting...because it may be happening at this very moment.

All the best,

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

P.S. As I said, our faculty of world-renowned experts at the 2018 New Orleans Investment Conference predicted this continued stock market weakness, along with other startling predictions for the markets just ahead.

Better yet, they gave up their top picks in junior resource stocks — not only in gold, but silver, copper, uranium and more. You can get all the exciting details in our New Orleans 2018 audio and video recordings.

To get yours, CLICK HERE.