What’s Next for Gold?

Sean Brodrick

Right now, investors view gold as having “as much luster as a rusty tin can,” according to a recent Forbes article.

That’s because the number of traders betting against gold recently reached its highest level since 1999.

Meanwhile, the Dow Industrials and S&P 500 continue their march higher … while investors continue to abandon the safety of the yellow metal for more-speculative returns in the market.

Gold made its worst start to the year in more than 25 years, and continues to trade more than $300 per troy ounce below its September 2011 high of $1,921.15.

Now, Credit Suisse and Barclays say the rally will peak this year.

This leaves many investors asking themselves, “What’s next for gold?”

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This could send gold soaring …

Gold ETFs have played a huge role in driving up demand for gold since 2003. The popular SPDR Gold Shares holds 1,327 tons of gold … making it the fifth-largest gold holder in the world, including central banks!

Now China is set to launch its first gold ETF in the next few months. With its huge population … and with physical gold imports in China already soaring 94% in 2012 due to demand …

This could be a watershed moment for gold prices. Here’s why …

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Always Darkest Before the Dawn

So I was driving along the Beeline Highway near our office the other day, and Florence and the Machine came on my XM Radio. Not just any Florence song, but her song “Shake It Out!”

Naturally, this temporarily turns my car into the Millennium Nissan. Zoom!

Unfortunately, I zoomed right past a state trooper. My heartbeat instantly pulsated. Luckily, he was busy, so he didn’t come after me. The relief only added to my adrenaline rush as I listened to the rest of the song.

And I got to thinking this song could have been written for miners, like many of the ones I just talked to at the recent Prospectors and Developers Association of Canada conference in Toronto.

Florence sings …

“It’s always darkest before the dawn!”

She adds: “It’s hard to dance with a devil on your back … so shake him off!”

Gold Miners Starting to ‘Shake it Off’

Many miners must feel like they have a devil on their backs. Producing gold and silver miners — that is, companies that are increasing production and growing resources — are trading near book value. Some are trading BELOW book value. And explorers and developers are getting crushed even worse.

Shake it out, my friends. Shake it off! Because it’s always darkest before the dawn. And that brings us to this chart of the Market Vectors Gold Miners ETF (GDX).

(Updated chart)

It’s certainly been dark times, amigos. Are we at the dawn?

And as I said in a recent column, “A Gravedigger’s Banquet in Gold“:

“This is an opportunity to pick up some incredible companies at dirt-cheap prices — and bearish investor sentiment is handing it to you on a silver platter. The bargains are extraordinary — the likes of which we may not see again.”

You’re going to have to judge for yourself whether we’re at a bottom or not. And remember that “A” bottom may not be “THE” bottom. But I’ve already sent my subscribers picks — stocks I consider very undervalued.

The band is striking up a song — it’s up to you whether you want to sit by and watch others dance or to stand up, throw that devil off your back and "Shake it out!"

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Gold Video Banned!

A major precious metals news outlet banned my latest gold report for being too controversial.

Judge for yourself: Click this link to view it now.

Their viewers missed out on the shocking attack I see coming on the U.S. financial system — a series of events that could send gold skyrocketing!.

Fair warning: I will only be able to keep this video online for a limited time.

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I’m sure many have lost hope. And let me tell you, if I thought this was the end of the run for gold and silver miners, I would say so. But right now, my Global Resource Hunter members are making money in the precious metals, in addition to energy and other natural-resource plays.

In fact, not only did I just give my subscribers marching orders to bank gains on two plays, but I also gave them a trio of new profit opportunities to direct their winnings into. I’m excited about the profit potential for each of these names, including and especially the precious-metals picks they just added!

There’s still time to get in on these new trades — grab your risk-free trial membership to Global Resource Hunter today and you’ll get instant access to my newest picks, as soon as I make them!

Good luck and good trades,

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.