Your Golden Opportunity

Editor’s note: What a treat we’ve got for you today. Some of you may remember Sean Brodrick, one of the earliest members of our Uncommon Wisdom Daily family. Sean travels far and wide to seek out small-cap values in the natural resource sector. He’s made his readers a lot of money with his insights over the past decade. And today, we are pleased to welcome him back to the team.

Sean calls the recent pullback in natural resources one of the best buying opportunities of the decade. That makes this the perfect time for you to start following him in search of resource riches around the world. Those travels have taken him from diamond fields north of the Arctic Circle … to a gold project in Argentina … to an ancient city of mummies and silver … to a wild patch of mountains in Alaska where gold flakes still wash down crystal-cold streams.  

His dispatches have gathered accolades from investors and industry insiders alike. And now, he’ll be sharing his insights with you on precious metals, uranium, industrial metals … and especially in the miners that are bringing these commodities to market.

Sean just returned to the States after attending the world’s biggest gathering of miners in Toronto last week. And he’s brought back some big ideas about how to play what he says is a coming boom in gold and silver. We’ll let Sean tell you all about it here …

Man, there is a buying opportunity coming like we haven’t seen in a long time.

Amazing finds will be on sale … buys that could double and triple your money — or more — over the next three years.

I’m talking about precious metals.

Now don’t buy them yet, because they’re in a correction. And despite the way gold rallied after the Fed’s much-anticipated rate hike yesterday, this could go on for a bit longer.

But the window of opportunity is about to open. And you want to be there when it does.

This buying opportunity will come as every babbling head on Wall Street is calling gold "dead as a doornail." They’ll miss the opportunity right in front of their faces. They tend to buy and sell at the wrong time. Every. Darned. Time.

Gold is cyclical. That’s a simple fact, one that the market pounds into our heads over the years. But let me show you what I mean in one of my favorite charts …

Gold miners saw a six-year bear market (yellow), then a 6-year bull market (green), then a 1.5-year bear (yellow), then a 2.5-year bull (green), then a 4.5-year bear. Now we’re looking at a new gold bull market.

This is a chart of the Philadelphia Gold and Silver Index, also known as the Gold Bugs Index. It’s a basket of leading precious metals miners. I’ve marked the bear markets in yellow, and the bull markets in green. These bull and bear trends become pretty obvious this way.

Why am I showing a chart of gold miners and not gold itself? Because miners are leveraged to the metal. That makes miners’ moves outsized — both up and down. I’ll have more on that juicy relationship in just a bit.

The last gold bear market ended in January 2016. We’ve had one year of bullish upside. There’s no magic length to any cycle. Those can vary. But solid research shows that gold bull markets tend to last between four and seven years.

And last year — wow! From January through early July, the price of gold soared 31.5%. It was fueled by a 2% rise in total global demand for gold, to a three-year high of 4,309 tons.

That demand, in turn, was fueled by the voracious appetites of physical gold ETFs. Some 532 metric tons flowed into gold ETFs last year. That is the second highest on record. Only the financial recovery in 2009 saw higher gold ETF demand.

But gold’s rally last year was interrupted by anticipation of rising interest rates and an investor focus on the U.S. election. Just as gold flowed into ETFs, it flowed out in the second half of the year — to the tune of 193 tons. As a result, gold ended the year up only 9%.

And this year — so far — we’ve seen the correction to gold’s new trend continue. So far. Not for much longer. Not if the cycles, and massive global megatrends I’m watching, have anything to say about it.

Along with a heaping helping of central bank financial flim-flammery at its finest …

Oh yeah, that’s gonna add some juice to gold’s move, too.

So let me show you another chart.

This chart looks different because it’s the metal, not the miners. And this chart is "only" since 2007. You can see that gold is near support from its big uptrend.

I call it the "Uptrend of BOOM!"

So here’s my million-dollar question for you: "Would you rather buy something when it’s cheap or expensive?"

Right now, gold has a huge discount sign on it. And gold miners — cheap? I’ll say they’re cheap! They got pounded into the dirt.

There are a good dozen producing gold miners trading for less than book value right now. These are functioning gold mines. They dish up real money. They’re priced like the CEO is on fire and falling down the shaft.

Yeah, that’s a discount. Even with the rally off the lows at the beginning of last year, many miners are still dirt-cheap.

But cheap can get cheaper. I don’t think we’ve hit the bottom yet. I will let you know when we do.

What’s more, I just came back from the Prospectors & Developers Association of Canada (PDAC) conference in Toronto. That’s the world’s biggest mining conference.

That’s the conference where miners, developers and explorers who drilled and scratched for the shiny yellow stuff all year come in to talk about their best drill results and their most prospective finds.

You can bet I came away with some ideas on how I want to play this next boom in gold and silver. With stocks that can double or triple your money — or more. Maybe a heck of a lot more.

Now some wobbly sorts will clutch at their pearls and say, "But the Fed! The Fed is going to keep raising rates!"

Well, you can see that the Fed’s rate hike on Wednesday didn’t slow gold down. I don’t think the hikes the market is already anticipating later this year will hurt gold, either.

Let me show you one final chart. We’ll call it "the nail in the coffin" for gold bears. It’s a chart of what happened during the last Fed rate hike cycle.

In June 2004, the Fed benchmark rate was at 1%. By mid-2006, it was at 5.25%. Meanwhile, gold went from $383.60 per ounce to $721.50 per ounce.

That was a nice 88% move in the metal. What do you think happened to miners? They soared, many by triple-digit percentages! And the big move in miners wasn’t over. After some zig-zagging, they took off again. The gold bull run didn’t stop until 2008.

I know. I was there. I was there the day my then-boss Larry Edelson looked at gold charts and flipped his outlook from bearish to bullish. And man, that was a whole new ball game.

So here we are again. The cycles come around. The new bull market has started. Maybe you didn’t believe the initial rally. After a grueling, 4.5-year-long bear market, I don’t blame you.

But now you have a gift. Like heaven is reaching down and handing you a box tied up with a silver bow. This pullback. This pullback is that gift.

How much will gold go up in this big bull cycle? My intermediate working target is $1,519. But longer term, I don’t know. Just like I don’t know just how deep this correction will go, or the exact date that this correction will end. The day that the gold bulls snort and roar and charge higher again.

But I’ll know it when I see it. And I’ll be ready. You should be ready, too.

All the best,
Sean Brodrick

Your thoughts on “Your Golden Opportunity”

  1. Looking at Steve saville’s chart of govt debt and gold it seems that at the last gold peak that debt was about the equivalent of 1300 gold. If this is correct, then the metal price went about 50 percent above govt debt value. Now, govt debt is about 1800 on the scale. So, does this imply that gold goes to 2700???

  2. I have your book on the Urban Survival Guide. It got me started to think along those lines where only lately do I see that I might really need it other than the people in the Hurricanes etc. The future looks dangerous.

  3. Sean, I always enjoyed your reports in the past when you were with Weiss. You always support your forecasts with good information from the field at mining locations to discover the facts, which is important. Good to see you back with UW/Weiss.

  4. I am so very happy to see you back at Weiss. I always enjoyed reading your articles and know that you are a great analyst. I recently went to Oxford and enrolled in the Resource Explorer. Why? Only because you were one of the analysts. Then last month I noticed that they dropped your name and wondered if they kept you or not? Yesterday (16 Mar 17) Lo and behold you show up right where I am at – the Weiss (best of the best). Thinking I am going to really like this year; welcome aboard once again. Can’t wait for your good trades.
    Judy

  5. Thanks for the reply, Sean. I was waiting for Larry’s go-ahead in Jan ’16 and so largely missed that historic low; ditto Dec ’16. No doubt there will still be opportunities to make money, and I hope you, and whoever takes over the helm at Real Wealth, can effectively guide us to some profits. Regards, Dave

  6. Hi, Dave. Thanks for writing. I think January 2016 was THE bottom. At least it looks that way. And in my chart above, you cans see that’s where the current bull market started.
    My point above was this this recent pullback is a gift to anyone who didn’t believe the first bottom. Or perhaps, like me, took gains when the grabbing was good. I told folks in Orlando in February and in Toronto earlier this month that I thought a test of $1,200 was in the cards. And I added that things could go lower. We’ve tested $1,200. Now we just have to see if we get a lower test.
    If you bought the bottom in January 2016 and have held on since then, you’re doing very well indeed. Personally, coming out of a 4 1/2 year-long bear market, I found I could buy, but I couldn’t hold when, months later, gold started going down on what should have been good news.
    Then we got another bottom in December of last year. Again, it was good for awhile. But gold rolled over hard in early February.
    Now, here we are again. It may be a solid bottom. But I’ll only know in the rear view mirror. The key is to wait for confirmation, but not wait too long to buy.
    Don’t torture yourself by considering it a late entry. We only lose a few percentage points by waiting for confirmation. And that’s a molehill compared to the mountain of profit potential if things play out the way I think.
    That’s the way I see it. I hope that helps. The weekly and monthly closes will be very important. It sure looks like the bull trend is getting stronger, and the biggest bull moves are yet to come. Best wishes, Sean

  7. Sean, welcome back to Weiss. I’m sure we’re all still a little stunned by Larry Edelson’s death, so it’s good to see your name here again to lend a hand with PM-related issues. I am worried, though, by your seeming channeling of Larry in claiming that this pullback in PMs represents THE opportunity to buy gold. It isn’t. That was in Jan ’16. I have been a paying Edelson loyalist for many years, but in the last 1.5 years I learned an important fact about Larry: despite his many insightful contributions in terms of forecasting events, he was not an effective trader. He largely called the PM bottom in Jan ’16 but he was unable to trade it—we didn’t buy much, and thereby missed one of the great run-ups in the history of gold. Did you buy near the Jan ’16 bottom? I hope you did. But you don’t mention it above, and, like Larry, are instead emphasizing the current pullback. But Larry also missed buying the bottom of this pullback (which very likely already happened in Dec ’16 as shown in your GLD graph above) and we are now faced with a late entry. Will miners drop again from here? Perhaps they will. And you say, of the end of this correction, “I’ll know it when I see it.” I hope it is not in the rear-view mirror looking back 2-3 months. What we subscribers need is not more promises of riches. We need smart timely buying. We have had truckloads of the former and very little, if any, of the latter.

    Best of luck in your new position at Weiss, and may we all make some money this year in gold and silver.

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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…