Gold Hits Key Price Level for Rapid Gains

Written by Nick Hodge
Posted January 24, 2018 at 12:43PM

Gold just hit a crucial milestone: $1,350.

This is a very important level for the yellow metal to hold.

I’m not a technical analyst, but I respect what they do and I listen when they have a strong opinion. And most technicians I talk to say that holding $1,350 is the crucial first step that can send gold much higher.

Check out this chart:

1350 Gold Support
(Click to Enlarge)

The last time gold hit this level was back in July of 2016.

As you can see, the gold price then failed to hold that key $1,350 level in a meaningful way.

And it tested that level again in August 2016 but failed to hold. From there it was lower highs all the way down to ~$1,100.

Gold feels stronger now than it did in 2016. We’ve had more rate raises. The bull market in equities is longer in the tooth.

Firmly holding at $1,350 is the force that will slingshot gold to $1,400.

And from there it’s game on.

The last time gold broke through $1,400 it was a steep ascent to $1,900.

1400 Gold Support(Click to Enlarge)

When that happens, gold stocks will go absolutely ballistic because of the leverage they offer.

You see, it costs a certain amount to get gold out of the ground.

Industrywide, that cost is about $800-$850 per pound.

So when gold is at $1,100 or $1,200 there isn’t much room for error.

But as gold hits $1,300 and then $1,400, gold projects become exponentially more profitable.

Check out this example. It’s a gold stock I’ve been urging people to take a look at.

Gold Stock LeverageWhen gold is at $1,200 per ounce, the project has a net asset value per share (NAVPS) of $1.75.

That would make the stock an incredible buy right now because it trades at only $0.75 and as we know gold is at $1,350.

At $1,350 gold it should have a NAVPS of $2.75.

And if gold hits $1,500 the stock should be worth $3.69.

So if gold goes up just 11%… this stock should go up 294%.

That is the kind of leverage quality gold stocks offer.

And it could be right around the corner if gold holds these levels.

Call it like you see it,

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Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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