Mining for Money: This Gold Party Ain’t Started Yet

You know who hates this market right now? Every investor who hasn’t bought gold and miners, thinking the rally this year is just a flash in the pan. I see "sour grapes" stories in the mainstream media all the time, talking about how gold is doomed. Doomed! DOO-OOMED!

Ha! I welcome their hatred of this rally. Their bitterness. They’ll change their minds eventually. And you know what? Plenty of ’em, when they finally go long, will STILL make money.

That’s because this gold rally hasn’t even really started yet. Let me show you a long-term chart of gold.

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This chart shows the last big bull market in gold, and the subsequent 5-year-long bear market, and the new bull market.

Wait! No! It doesn’t show a new bull market at all. Even though I’m certain gold entered a new bull market at the beginning of 2016, chart-wise, that rally isn’t enough to break the big bearish trend that has been in place for six long years!

That’s right. The downtrend started before the official bear market began. Gold has trended lower for six years!

So could the bears be right? Could gold’s doom be nigh?

Well, sure. If every darned fundamental that I’ve been hammering about didn’t exist. Peak gold. Rising inflation. The ballooning Asian middle class. The cyclical nature of gold. And more!

But those bullish forces DO exist. The tide in gold has turned. And we are getting closer to a big breakout.

And let me tell you this: Every investor who is long gold and miners should stand up and give President Trump a standing ovation. He’s the force behind the recent gold rally.

First he bombed Syria. Then he threatened North Korea. Then he dropped all talk of China being a "currency manipulator." Then the Prez told the Wall Street Journal that the U.S. dollar is "too strong."

Result: The U.S. dollar looked back over its shoulder wistfully, then did a nose-dive off the roof. And as the greenback tumbled lower, gold jumped higher. That’s the "seesaw of pain" I keep telling you about.

Then today, Mr. Trump bombed an ISIS target in Afghanistan. And gold gleamed even more.

Sure, I expect that what Trump giveth, he can taketh away. If and when things smooth over with North Korea, we’ll see a pullback in gold. Likewise, he talked the dollar down one week, so he can talk it up the next.

And there is still plenty of bearish sentiment lately. That’s why many miners have been laggards. Investors do not believe it. Heck, mining companies don’t believe it. French investment and bullion bank Natixis tells BullionVault that producers are selling gold into the current surge.

Why? I’ll tell you why! Because a five-year bear market has crushed their hopes. They see a six-year downtrend looming dead ahead, and they are panicking.

But downtrends are made to be broken. Oh boy, are they.

The fact is, gold is making higher highs and higher lows. We HAVE hit peak gold production. Gold is so cyclical it should be in the Tour de France. And those cycles are gearing up. Way up.

Let me show you one more chart before I go. Showing that you haven’t missed the boat. It’s a chart of gold’s daily price action through Wednesday.

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Sure, gold bulled through overhead resistance at $1,260. That resistance is now support. But there is even bigger resistance at $1,309.

Now, we might get there quickly. Recently, I told you just how quickly gold can fill an overhead gap in volume.

But gold might also zig-zag. The market causes the maximum amount of pain to the maximum number of investors — you know that. We could even see gold zag downward to test its recent uptrend before it really breaks you.

You know, in your gut, that such a dip would be a heck of a buying opportunity. But too many will listen to the sour grapes of Wall Street. It’s very hard to buy that kind of dip.

But if such a dip happens, those who do buy it could position themselves very nicely for gold’s next big bull move.

And when that happens, I have a select group of smaller gold and silver stocks. They’re overlooked by Wall Street. And they should shine very brightly indeed.

And that big rally is coming. Sour grapes be damned.

Best,
Sean

Sean travels far and wide to seek out small-cap values in the natural resource sector. His journey started in New England. As a youth he worked on Mt. Washington, on the cog railroad that runs to the summit. Working on…