Are You Profiting From This Repeating Pattern?

Written by Jason Simpkins
Posted July 19, 2019

Have you heard the news?

Gold prices are at their highest level in six years and gold stocks are outpacing a record-setting stock market.

Who would have thought?

It seems like just yesterday we were all talking about rate hikes and bear markets. But now, here we are.

Who possibly could have predicted this?

Well, me.

Twice.

Twice now, I have called the Fed’s bluff and encouraged you to do the same.

And twice now, I’ve been right.

The first time was back in October 2016. That was the first time I laid out the case that the Federal Reserve over-promises and under-delivers on monetary policy.

Here’s what I wrote:

“For the past couple of years, and even the past month, gold has been bludgeoned by the Fed.

More precisely, it's been bludgeoned by fears that the Fed would raise rates higher.

But now, more and more analysts are coming to realize that the Fed can't really do that — not in any meaningful way. The U.S. economy is simply too weak. Furthermore, every other major economy in the world is going in the opposite direction.”

But that’s not all.

I even went a step further and predicted EXACTLY what would happen in 2017.

“Gold saw a nice rebound early in [2016]… Only when the calendar year began to draw to a close did it falter,” I wrote. “I'd expect a similar pattern in 2017. Gold will languish through December until the Fed finally decides to raise rates. Then, it'll be another year of rising gold prices as the Fed plays “wait-and-see” with any further interest rate bumps.”

And what happened?

Gold did indeed struggle towards the end of 2016, falling to $1,158 per ounce. And in 2017, it rebounded just like I said it would — rising 12.5% to close the year at $1,302 an ounce.

Miraculous, right?

Okay, maybe not.

Maybe I just got lucky.

Except, it happened again in 2018…

Again, I pointed to the exact same rationale that I did before — that the Fed was full of shit.

Here’s the quote:

“So what’s probably going to happen is the same thing that happened last year, and the year before. The Fed and some of the more bearish analysts will talk up rate hikes, causing a shift from gold to the dollar. That’s what we’re seeing now...

This trend will likely crescendo early in the year, when the FOMC finally acts and boosts interest rates to 1.5-1.75%. But then, in the weeks and months after, the market will realize it overreacted. We’ll be in line for just one, possibly two, more hikes by the end of 2018, and set to finish a shade over or under 2%. By then, the impetus for more rate hikes will have abated.

And finally, as that reality sets in, gold will rebound, and the dollar will retreat just like it did in 2017.”

What happened?

Well, I got one thing wrong — the Fed raised rates three more times that year, not two like I thought.

But everything else was right.

Reality did set in. Gold did rebound. And the dollar did retreat.

Gold was trading at $1,322 per ounce when I wrote that follow-up piece in March 2018. And now, it’s sitting pretty at $1,418 per ounce.

Are you seeing the pattern?

It’s pretty obvious.

The market continually, repeatedly overreacts to Fed rate increases.

The central bank simply isn’t as hawkish as the market believes.

And it’s certainly not hawkish now that President Trump is threatening to fire Chairman Jerome Powell if he gets too aggressive. Trump is also attempting to pack the FOMC with lackeys.

So you can expect gold to shoot even higher from here.

We all know the U.S. debt burden is unmanageable. We all know that Congress can’t effectively govern. We can all hear the President when he talks. We can all read the tea leaves.

It’s not just me.

I’m not a genius. I’m just a guy who caught on to a very obvious pattern.

I’ll tell you who is a genius, though — Gerardo Del Real.

Gerardo is our in-house mining expert and editor of Junior Mining Monthly — an investment advisory that’s focused on little-known, hugely profitable mining plays.

He knows everything there is to know not just about gold, but silver, platinum, nickel, cobalt… you name it.

And he has found what’s almost certainly the best way to play this latest surge in gold prices.

It’s a secret gold database that has minted new millionaires on no less than three separate occasions.

And it’s poised to do it again in short order.

If you want to play gold, this is how you want to do it.

All you have to do is check out Gerardo’s free report right here.

Fight on,

Jason Simpkins Signature

Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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