Right now, gold and silver are in a sweet spot for early investors or “speculators.” Since the beginning of 2016, the gold-silver sector clearly has come out of a four-year downturn.
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With cash offering low yields, stocks and bonds both in retreat and emerging markets in turmoil, investors turned to gold as the one sure bet that would retain value. This safe-haven demand combined with strong supply/demand fundamentals in the physical bullion market and the coming election uncertainty will push gold prices higher in the weeks ahead.
With the current booming economy, the dollar remains strong, and that’s not normally good news for gold. But curiously, gold has been rising recently. As Byron explains today, one reason could be the Fed’s intentions to cut back on future interest rate hikes. The other reason could be what an old physics professor taught back in the ’80s that is truer today than ever.
Right now gold is in the sweet spot. There are plenty of head winds, including a new round of "tough talk" from the Fed (don't pay too much attention to it; it's just talk, but it can move markets in the short run), higher stock prices and a few good economic indicators. For now, read our thoughts on our open positions…
Markets are confused about whether the Federal Reserve will raise interest rates in June or not. This matters to the near-term price of gold and gold mining shares. Then again, no matter what happens with the Fed or interest rates, we’re still setting up a great portfolio of gold miners to deliver gains over the long haul.
Russia, Turkey and other nations are ready to join Iran and China in a new Axis of Gold designed to create a robust gold-based payments system that is free of U.S. dollars. This, combined with the Fed flipping from tightening to easing of their monetary policy, will soon create a tailwind for higher gold prices later this year.
Making money via mining stocks is very much about the people — meaning the management teams and staff. What are they doing with shareholder money? How are they turning prospects into developments? It’s about people, people and more people.
