Gold’s Magic Number
Gold just hit its “magic number.”
It’s not something you’ll read about from mainstream pundits – many of which are skeptical of gold’s value.
But it’s a pretty big deal.
The last time this happened was 2008. You probably remember the amazing bull market that followed. Indeed, when gold hit its magic number nine years ago, the metal shot up to more than $1,800 per ounce – a return of roughly 125%.
If that’s not thrilling enough, consider one tiny niche sector of the gold market exploded for multiple 1,000%+ gains
And that’s NOT an exaggeration.
See for yourself. Look at these gains…
Well, just as in 2008, a major shift in the gold market is underway, and nobody seems to realize it.
Basically, gold hits its “magic number” when three things happen:
1) There’s A Major Pullback in the Gold Price – When gold bullion falls to a certain price-per-ounce, it becomes affordable for investors relative to an over-priced stock market and they start to pile in. We’ve seen that. After peaking above $1,900 per ounce back in 2012, gold retrenched sinking to its current level around $1,200.
2) There’s A Stock Market Exodus – When there’s uncertainty in the world, people flee stocks and turn to safe haven assets such as gold. That is occurring as we speak. The Trump stock honeymoon is over and things are about to get very bloody in the market.
3) Gold Prices MUST Rise... Or None Will Be Mined – When the price of gold falls below what it costs to actually get out of the ground, prices MUST rise, or mining activity will grind to a halt. Again, this has already happened. So much surface-level gold has been extracted, all the low hanging fruit is gone. What’s left is expensive to extract, and prices are not conducive to the process.
When these three factors line up, gold hits the magic number – the ideal price to enter the market.
That’s where we’re at right now.
Like I said, it’s a big deal. We’re going to see some massive gains racked up in the years ahead.
However, I do need to warn you that not every gold stock will profit as a result. You can’t just throw a bunch of darts the board. They have to be targeted.
We’ve noted in the past that gold stocks are notoriously tricky.
Altogether there are over 1,000 differently publicly listed gold stocks, and the majority of them are exploration companies. That means they don’t have any real holdings. They make their money by prospecting for gold, just hoping to hit the jackpot.
The gains I listed earlier come from junior miners, which are especially difficult to predict. (Though we’ve detailed some in the past.)
We’ve also got a bona fide expert on hand in Gerardo Del Real – a veteran in the business who’s doing big work over at Resource Stock Digest.
I’d advise investors to check that out now, and we’ll circle back with more on gold’s magic number (and some stock picks) when our research is complete.
Jason Simpkins is a seven-year veteran of the financial publishing industry, where he's served as a reporter, analyst, investment strategist and prognosticator. He's written more than 1,000 articles pertaining to personal finance and macroeconomics. Simpkins also served as the chief investment analyst for a trading service that focused exclusively on high-flying energy stocks. For more on Jason, check out his editor's page.
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