Gold Stocks: Up, Up, And Away
Stewart Thomson | Aug 27, 2019 02:06PM ET
A year ago, I predicted that any US stock market sell-off would be accompanied by a dramatic surge in the price of VanEck Vectors Gold Miners ETF (NYSE:GDX) an VanEck Vectors Junior Gold Miners (NYSE:GDXJ).
That’s exactly what happened; the stock market tanked and key gold stocks soared.
Get The News You Want
Get The News You Want
This year, I’m predicting that any major US stock market crash will again be accompanied by the soaring price of the gold producers…
Get The News You Want
But I’m also predicting that most CDNX-listed junior explorers are set to soar too!
America’s top money printing cheerleader (President Trump) brags that his government essentially has the Chinese government cowering in a corner. He claims they are ready to throw in the white towel in the trade war. Reality check:
Get The News You Want
It’s obvious that major money managers are becoming very concerned about these tariff taxes.
This is the horrifying US stock market chart.
Get The News You Want
On the one hand, private enterprise must be respected. Great companies exist and prosper in the socialist nations of Europe and in China. They will continue to prosper.
Get The News You Want
The drive of entrepreneurs must never be underestimated, even in the harshest conditions.
Get The News You Want
On the other hand, when governments unveil growth-negative policies like tariff taxes and money printing, stock markets can experience dramatic declines. These declines are usually temporary, but they are very painful.
This is the important gold stocks versus Gold chart.
Get The News You Want
I call it the “Just buy” chart, because there really isn’t much else to do here except buy, buy, and buy!
Get The News You Want
That’s especially true for core position enthusiasts. Gold stocks are incredibly cheap compared to gold bullion.
Also, I believe investors can make the most money in the market buying when their analysis has gone awry. The “Golden Beeline” chart.
Get The News You Want
Many gold analysts have tried to “top call” gold since the rally from about $1167 began. This has been a mistake and I believe it will continue to be a mistake in the months ahead.
Get The News You Want
A gargantuan bull continuation pattern is forming on the weekly gold chart. It’s an inverse H&S pattern with a potential neckline in the $2000 area.
Get The News You Want
This is not a time to sell gold or top call it. It’s a time to buy, sit back, and watch those positions fly! Here’s why:
Get The News You Want
Institutional money managers are adding gold to their portfolios. These are not highly leveraged hedge funds gambling on the COMEX.
Get The News You Want
They are unleveraged institutions. They are serious players who understand the destructive nature of the Trump tariff taxes. These taxes are being implemented as the business cycle peaks and with relentless ramp-up of US government spending and debt.
Get The News You Want
This horrifying scenario has superstar managers like Ray Dalio predicting serious inflation and potential rioting in the streets.
Get The News You Want
Please click here now: Top money managers are concerned that stagflation is emerging as the Fed is forced to print money and cut rates to offset the taxes. They are not buying gold, silver, and the miners for a “quick flip”. This is long-term allocation.
This is the fabulous GDX chart.
Get The News You Want
Profit-lock enthusiasts can buy a breakout over $30 and place a stoploss at $27.50. A move above $30 opens the door for a violent surge to $37-$39.
Get The News You Want
From there, core positions can be added on a pullback to about $30. Nervous investors can buy put options to manage their emotions, but everyone else should be in “Buy & Fly!” mode alongside the institutional money managers. Today’s Superman is a man of gold and looking at GDX (NYSE:GDX) today, I believe he would say… Up, up, and away!
Get The News You Want
Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.