A mini gold boom that just delivered stealth doubles and triples to some investors was barely noticed.
Since gold’s spectacular run last summer, it has surged even higher to nearly $1,600/oz. And with that, momentum and volume is entering the market.
After waiting so patiently for gold to rise above its 2013 high, it might be tempting to take your minimal profit and run.
Or, following the slight dip and stagnation in late 2019, it’s easy to get nervous about entering the market in the first place.
But if historical precedent is any indication, there is a lot more money to be made in the next gold boom.
Especially if you’re investing in gold the right way.
Your profitability in the gold market heading into 2020 requires having the answers to these three questions:
- Is this rally ever really going to take off?
- What’s the best way to get in on the action?
- When exactly will this cycle end?
Analysis will tell us company specific details.
Macro research will tell us the overall direction.
But one of the most important indicators is sentiment.
And there’s no better gauge of sentiment than a conference solely focused on resources – the 2020 Vancouver Resource Investment Conference.
There have been lean years where Bitcoin and Cannabis were kings. But now that pendulum is shifting to precious metals… in a big way.
If conference attendance is any indication, the pre-registration tickets are through the roof and the attendance is at sellout capacity for one of the biggest conference venues in the entire city.
But that doesn’t mean it’s the peak…
The Next Gold Boom: The Real Gold Bull Market Is Yet to Launch
The gold market has always moved in cycles—from dramatic boom to overnight bust, and eventually back again.
So far in this “boom,” gold has barely risen 20% from its floor.
That’s not even close to the minimum required to qualify for a true “bull market” over the past century.
The smallest gold run-up in the past 90 years was 45% from 1930-1933—more than twice the current gain.
The other rallies were far, far bigger: from 1972-1974, the rally yielded a 100% gain.
From 1978-1980, another 100% gain. Then from 2007-2010, a 67% increase in the price of gold.
The point is this: when gold is ready to rise, it takes off.
Every single one of the years in the date ranges above saw an increase of more than 20%. What some investors might see as slipping backwards may just be the cycle getting ready for its next natural advance.
So if you’re a subscriber to my Boom-Bust-Echo theory, then you know the gold rally has barely just begun.
The biggest profits still lie ahead of us.
Savvy investors will patiently hold, before finally selling near the peak of the boom.
For example, many major gold producers right now, such as Kinross, Gold Fields, Alamos, and Eldorado are trading around $5-6.
(Gold Fields is up nearly 190% from its lows 14 months ago – and that’s a $5 billion company!)
These stocks could easily be sitting at doubles a year or two from now. And the juniors’ percentage returns will likely be an order of magnitude greater.
It might be hard to believe that gold stocks could see gains of 500% or more in the next couple years. It was equally hard to believe in 1933, 1972, 1978, and 2007… but it happened every time.
Why Gold Is a Bad Investment When “This” Happens
During a gold rally, you might be tempted to invest directly in gold bullion.
There are many reasons why that’s not the best way to invest, including the persistent strength of the U.S. dollar. Have some bullion exposure.
But another really big reason is the potential for extreme leverage with gold stocks.
Look at what happened to gold in the ‘70s…
It took off early, cooled off a bit in the mid-‘70s, then hit the afterburners headed into the latter part of the decade.
On December 31, 1978, gold was at $226 an ounce.
On January 21, 1980, it maxed out at $850 an ounce.
That would be like gold going to $5,641 by the time the next U.S. President is inaugurated. If it happened forty years ago, it can happen again.
Now, digging up information on tiny gold producers from the early ‘80s is no easy task. Most of the information was not digitized then.
But here’s data we put together below on a few producers along with the percentage returns at their peak:
Table 1. Gold Producer Returns, 1979-1980
That’s an average of a 220% gain.
Of course, it’s only the lucky investor that’s going to catch it right at the top.
But suppose you could capture 75% of those gains. That’s still a 165% return.
Buying into gold stocks instead of gold takes luck out of the equation. But we still haven’t mentioned where the real gains are to be had.
The ones that turn a modest portfolio into your whole retirement plan.
Editor’s Note: The recent breakout in the price of gold is just the beginning. Gold is set to skyrocket in the months ahead, and gold stocks are going to be explosive.
Exclusive investors, including legendary speculator Doug Casey, have already profited from Marin Katusa’s mining recommendations. As the gold bull market takes off in earnest, his recommendations are set to deliver enormous returns.
Right now, Marin is revealing the top gold mining stocks he’s buying and how you can join him in the coming gold boom. Click here to get all the details.
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Gold and Silver…Wealth Preservation & Day to Day Real Money.
Go long or you are wrong.
I already am long
Kirby said in May of last year that there would be a currency reset 100% sure that year Guess he needs to rethink his positions a bit
Yep, I never, ever thought they would be able to inflate the bubble this size this long either.
When it POPS the shrapnel will riddle those not protected, and that will probably be 95% of the 99%.
I guess I am past long. My chief fear is my enduring patience will be rewarded with confiscation.
ottomatik,
Confiscation of Gold and Silver Coins Will Not Happen
By Greg Hunter On April 9, 2012 In Market Analysis 100 Comments
By Greg Hunter’s USAWatchdog.com
People ask me on a consistent basis if I think the government will confiscate their gold and silver coins if times get rough. I feel there is little chance of this happening, and here’s why. Gold and silver coins are predominantly held by the wealthy (especially gold). The wealthy are not going to allow the government they support with campaign money to take their gold. It is just not going to happen. Think about it, poor and moderate income people (and that is at least half the population) do not have a significant holding of gold or silver. Most of the rest of the population have the bulk of their wealth tied up in 401-K’s or IRA’s. This may come as a surprise, but most rich people do not have 401-K’s or IRA’s. They have stocks and bonds, but the rich also have the money and smarts to diversify their portfolios.
In my years as a correspondent at ABC and CNN, I used to check in with a coin and bullion dealer in New York City to see what was going on at the street level. He turned into a friend of mine and a great source. He was a real expert and had been in the rare coin and bullion business since the 1970’s. Around 2007, wealthy people and hedge fund folks started buying physical gold and silver. (Gold was in the $600-$800 range.) He told me he would sell Gold Eagles in $100,000 orders to individuals on a routine basis. He also told me he had “connected” clients who had never bought physical gold and silver before and were buying it for the first time in their lives. In 2008, he told me he started seeing big orders for silver coins. For example, one order was for forty, 500 ounce boxes of Silver Eagles. (It was shipped abroad.) If things get tight, the government is not going to demand their bullion coins back from rich campaign donors.
Another reason I think the government is not going to confiscate gold and silver coins is state governments are legalizing their use as money. South Carolina is the latest state to approve legislation (after Utah), and at least 12 other states are proposing the same thing. (Click here for more on this story.) There is also a federal legislation in Congress to allow gold and silver to be used as money. (Click her for more on the story.) The trend is moving towards gold and silver coming back into the monetary system, not outlawing it. Now, if you asked me if the government would nationalize gold or silver mines in the continental U.S. or Alaska, I say that is a possibility. I also think the U.S. government could confiscate foreign gold holdings on deposit at the New York Federal Reserve bank, which are roughly 6,000 tons. This is the low hanging fruit. So, I think confiscation of gold and silver coins are unlikely.