Could the timing of gold’s next bull run be perfect right now?
Gold has long been a safe haven stock. But as the market turned toward tech, precious metal stocks took a back seat…until now.
Open a newspaper or read any headline right now and you’ll likely see global unrest, geopolitical strain, currency turmoil & financial market disruption. These are all huge catalysts that historically drive gold prices higher. The cherry on this golden sundae is that none of these things can be remedied overnight. What that means is that the bull market for gold could just be getting started.
But timing is important and technical levels for gold are beginning to show an eerily similar trend that they haven’t truly shown in nearly a decade:
The last time gold prices were at these levels, the entire sector exploded! And it wasn’t just “any” breakout. Gold prices ran to all-time highs on a rally that lasted for months. Are we looking at gold’s next bull run?
We have compiled a time-sensitive report of the Top 5 Bullish Cases for Gold so investors can take advantage of this potential breakout in gold stocks…and we’re offering it for free. Thank you for your interest and we hope you enjoy this and all of our articles on GoldStocks.com!
Bullish Case For Gold Stocks #1:
Junior Gold Stocks Provide Investors With Huge Windfalls
The key to scoring big with gold stocks is to be ready before the big move comes and to be in front of the right gold opportunities. And historically speaking, some of the biggest returns have come from junior gold stocks:
- Roxgold investors who played the last big gold boom saw shares skyrocket from $0.38 to nearly $2.30… 497%
- Investors who bought shares of gold company New Gold Inc. prior to the big gold market move, saw the stock trade below C$1.50 and road a wave to highs of more than C$14… 1,167%
- Victoria Gold Corp moved from just $0.11 to highs of $1.55 during the last gold rush… 1,309%
- Guyana Goldfields traded under $0.70 just as the last gold rush hit, with early investors that could have ridden that momentum to highs of $11.79… 1,609%
- Early buyers of Wesdome Gold saw the stock at levels UNDER C$0.50 and had a chance to ride that to highs of nearly $6… 1,722%
And there are countless other examples of just how massive a gold price breakout can be for junior gold stocks and one junior gold mining stock may be on the verge of striking a major payload!
Bullish Case For Gold Stocks #2:
M&A Climate Is RED HOT
And it isn’t just because the fundamental economics are pointing at a move in the precious metal. The price of gold bullion has now cracked a new 6-year high! All of this could be creating the perfect storm for another big move for gold stocks.
To some extent, all mining companies are worth the value of the gold in the ground that they own. The problem is that as they mine that metal they need to replenish it or risk having no resources left.
The gold mining industry is set for a “wave of mergers and acquisitions” as smaller miners seek to consolidate to capitalize on higher prices. Smaller companies may be able to prospect for new ore deposits but larger ones will tend to have a hard time discovering large enough deposits to make a difference. Hence you could see larger companies deciding to buy smaller ones.
The world’s largest gold companies have been busy acquiring rivals this year, with Barrick Gold buying Randgold Resources in January and Newmont Mining acquiring Goldcorp in April.
“There will be numerous stocks…that will be bought by big companies”Don Coxe chairman, Coxe Advisors
With gold prices on the rise, larger gold companies could run into higher production costs simply based on the size of the company and its overhead. As is typical with most industries of scale, smaller companies could stand to reap the rewards of having strong asset classes and prime location while also holding lower operating costs.
Bullish Case For Gold Stocks #3:
Billionaires Are Already Starting To Pour Money Into Gold Stocks
When it comes to gold and gold stocks, most novices will hear about big money flowing from “Main Street.” But this usually comes well after Wall Street hedge funds have already piled in. So it’s important to read between the lines and sniff out early institutional bulls.
In recent months, some of the most elite investors have turned to precious metals like gold as a part of their overall investment strategies. Whether you like Trump or not you’ll most likely agree on one thing: he’s thrown a wrench into the U.S. political climate. It remains to be seen what comes of that, but the president’s actions so far have some billionaires expecting his disruptive political influence to spill over into the investing world even more.
That “pile in” we talked about may have quietly, already begun. Billionaire hedge fund manager and DoubleLine Capital founder, Jeffrey Gundlach said in an interview, “I am certainly long gold… Gold and commodities broadly should benefit this year.”
More Than Just A Handful Of Billionaires
But he’s not alone either. Legendary investor Paul Tudor Jones said that gold is his favorite trade for the next year or two, “I think one of the best trades is gonna be gold. If I had to pick my favorite [bet] for the next 12 to 24 months, it’d probably be gold.” The yellow metal “has everything going for it,” he said, adding that if it can reach $1,400 an ounce, it will push to $1,700 “rather quickly.”
Other hedge fund managers, including Ray Dalio, David Einhorn, and John Paulson, have also started building gold positions. If billionaires like these own gold, this could be the sign that retail investors have been waiting for. With all of them citing market uncertainty driven by global economics, gold could be starting to sound like a really good idea.
As financial unrest continues across the globe, currency valuations sinking and major support from some of the world’s foremost billionaires prompting a gold play, the writing could already be on the walls.
Bullish Case For Gold Stocks #4:
Is This Perfect Timing For Junior Gold Stocks – Charts Don’t Lie
One of the best-known indexes of small resource stocks in the world is the TSX Venture Exchange. It doesn’t take a technical wiz to see patterns on a chart or what’s happened each time this index has hit a certain level…here we are, Now:
What will happen next? Well, as we said above, it comes down to timing. Let’s take this one step further and look at the price of gold over the years:
The precious metal has seen a cyclical trend over the last 20 years. The first 10 years saw the last long term bull market for gold. As it stands today, the market has been in a downtrend, into a sideways trend for almost 10 years thereafter. That means investors aren’t “gifted” with “golden opportunities” regularly.
Being that this could be nearing the end of the latest 10-year cycle, the timing might be playing a big role considering the economic environment! Remember the last mini bull run during the broader 10-year uptrend?
That began at the tail end of 2008 and didn’t stop until well into 2011 & 2012. Junior metals stocks exploded. The examples mentioned earlier were only a handful and those moves were in the thousands of percentage points.
Bullish Case For Gold Stocks #5:
China’s Trade War: A Perfect Storm For Gold?
Let’s look at things that have historically helped gold prices skyrocket in the past:
- Geopolitical stress
- Declining interest rates
- A weaker dollar
- Global economic slowdowns
Maybe you’ve heard of something in the news lately called the U.S. / China trade war. Since 2018, the markets have speculated on when a deal would be announced. Amid numerous head fakes and false promises, there are still no signs of this coming to an end either.
That has not only led to geopolitical stress but also declining exchange values, lower interest rates with more decreases anticipated in 2020, and slower economies across the globe. What’s more, is that this issue doesn’t look like it will have a quick fix anytime soon.
Tepid global economic data continues to suggest a bullish case for gold in the meantime. Non-farm jobs figures, China PMI and the business climate for countries like Germany lean in support of a slowing economy. This would help the stance on safe-haven investments with gold stocks front and center.
Gold Stocks Could Benefit As More Fed Rate Cuts Are Expected
If the Fed sticks to a plan that would involve more rate cuts, there could be even brighter days ahead for the yellow metal.
“Growth still remains weak globally and we have geopolitical tension between the US and Iran. Additionally, $1,400 is a pretty strong support level for gold. We are still in a rate easing cycle right now. Overall factors are still supportive of higher gold prices.”Howie Lee, an economist at OCBC Bank in Singapore, to Reuters
Others like Josh Shapiro, chief U.S. economist at MFR Inc, think the economy will slow in 2020. He also expects the Fed to slash rates to as close to zero as they’re comfortable with. Shapiro said MFR thinks that any U.S./China trade deal prior to the election would insignificant. He said it “now it looks like we might not even get that.”
“The Fed has invested too much time saying the economy is in a good place for them to backtrack quickly on that. It would make them look awfully foolish,” Shapiro told MarketWatch.
The Secret’s Out: Now It’s Time To Capitalize
This isn’t a secret anymore. With continued global financial uncertainty, a push for further decentralization of currencies, and the clear demand by the world’s biggest billionaires to shift investment into gold, what better time is there to find the next “undiscovered” junior gold companies poised for huge growth?
With the pending gold boom heading into 2020, most would argue that now is the time to have a gold stocks watch list put together. Furthermore, there’s resounding support in favor of junior gold mining stocks. Ready to start your research?
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