Gold Old Fashioned Greed

Written by Nick Hodge
Posted December 4, 2019

Gold continues to show its strength and prove the doubters wrong. 

After finishing October above $1,500, gold prices dropped like a pet rock in November down below $1,450, giving bulls yet another reason to doubt themselves. 

Technically, it needed to hold ~$1,460 at the end of November or risk falling even further. And hold it did, rallying on the last day of the month to hold that level, and surging the first few days of December to nearly $1,490. 

Gold Price November 2019 Close

The bull market remains firmly intact as far as the gold price.

Elsewhere, there are signs the gold market is heating up as well. 

The past week has seen three separate billion-dollar deals in the space. 

1. Kirkland Lake is buying Detour Gold for C$4.01 billion.
2. Endeavour Mining offered US$1.9 billion for Centamin.
3. Zijin Mining is buying Continental Gold for C$1.3 billion. 

With the gold price breaking out of a six-year base to a new gold market, producers have enjoyed good returns this year as the widget they produce suddenly costs more. 

But the fact remains that new gold discoveries have been scant in recent years and producers need to buy quality projects to replenish their reserves. 

Gold Discoveries

All this is happening against the backdrop of a record-high stock market that has made lots of people rich(er) over the past decade. Investors have been content to buy stocks with little need for safe havens. 

But it may not be fear that sends investors into gold. It could end up being good old fashioned greed as those typically agnostic to the metals start seeing the deals going down and the fundamentals reveal it to be a must-own sector. 

More and more investors are going to start realizing there is a bull market going on in precious metals despite commodities being grossly undervalued compared to stocks. 

Stocks vs Commodities 2019

Forget global debt and negative interest rates (only for a second, because they will certainly help fuel this golden fire). The most basic economic forces are all but mandating gold prices remain buoyant. 

It’s largely remained under the radars of most investors… but you can only ignore billion-dollar deals happening daily for so long. 

The herd will catch wind soon. 

Click here for a full gold bull market thesis and top pick.

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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