Buck The Trend
For Big Gains
Gold didn’t bounce after this latest Fed rate hike, sending many newly-minted gold bulls running for the exits.
Don’t join them — because this is the precisely the time you need to look for high-powered mining stocks. Dear John, The Fed threw cold water on the gold market last week. It’s not so much that they hiked interest rates another quarter-point. That’s actually helped the gold market the last three times they raised rates.
Rather, it was the considerably more-hawkish policy statement and post-meeting press conference that did gold in. The Fed outlined its plans to roll off its balance sheet, or launch “QT” (quantitative tightening) as many have labeled it.
This turned sentiment decidedly bearish for gold.
In addition, the pattern of gold rallies after rate hikes was nearing its expiration date after three successive events. Traders had begun to discount the pattern, muting it to nonexistence. So the market’s consensus has shifted. Mainstream investors are piling back into the stock market and abandoning gold. The result: The gold price has pulled back, and there’s little excitement to be found in the market. But after more than three decades in the business, I can tell you this: It’s time to buy. Buy When They’re Selling The hardest thing to do in investing is to buy when others are selling. But in all asset classes, and particularly in sectors as cyclical as metals and mining, having the fortitude to buy at the lows is the secret to consistently reaping big profits.
The greatest and most successful investors in resources have been able to break the emotional grip of the market and make cold, hard decisions at the bottoms and the tops. This is one of those times when hard decisions can lead to truly exceptional gains. You see, with the failure of the Fed meeting to energize the gold market, most investors are expecting the metals to slip away into a typical summertime bottom.
Heck, I’m one of them. I actually expect gold and silver to trade sideways-to-lower over the next month or so.
But we can never count on being lucky enough to pick the absolute bottom of any cycle. Trying to do so is what the Brits call being “too smart by half.” You’ll inevitably miss some great opportunities.
And right now there are two big opportunities that need to be taken advantage of… Opportunity No. 1:
Physical, Private Gold As you know, I typically recommend low-cost gold and silver bullion coins.
I’ve had a lot of experience in the rare coin industry, and it’s a great option for those who want to educate themselves in the sector and collect truly rare coins for both fun and profit.
But the average investor will never “catch the bug” of rare coin collecting. And without gaining in-depth knowledge of the numismatic market, they’re much more likely to lose money than make money.
Still, old U.S. coins offer some advantages over common bullion coins. Besides the fact that they’re historic and just neat to own, they’re also private and unreportable due to their status as collectibles. Because of this, as well as their limited supply, they usually cost much more than bullion coins — and this is why I rarely recommend them. On rare occasions though, during a lull in the market like we’re seeing right now, these coins are nearly as cheap (or even cheaper) than common bullion coins.
Just such an opportunity has developed, and it’s happened in one of my favorite U.S. coins, the historic $10 Liberty gold piece.
My long-time friend Dana Samuelson, proprietor of American Gold Exchange, just alerted me to this opportunity: Brien, you need to see this —one of the best values we’ve seen in 15 years: $10 Liberty U.S. gold coins in Almost Uncirculated (AU) condition are now trading for less than modern bullion coins!
That’s right, the market is offering a great buy in 100-year-old $10 liberty gold coins, which are selling at their lowest premium since 2002.
These coins are so cheap today that they are trading at lower prices than modern half-ounce U.S. Gold Eagles. Since you and I started in this business with Jim Blanchard back in the ’80s, I can’t remember when $10 Liberty coins in AU were this inexpensive relative to their intrinsic gold value.
As you know, classic U.S. gold coins like these are completely private and non-reportable because of their status as collectibles. Plus, their intrinsic scarcity can mean a substantial premium over gold content during periods of strong demand.
For example, in 2009 when the market for classic U.S. gold coins was red hot, $10 Liberty coins in AU were trading for 34% over their gold value.
In a normal market their premium is around 15%. Today, they’re trading for as little as 7% over their gold value — a lower premium than modern half-ounce U.S. Gold Eagle bullion coins.
That makes them better than bullion in every respect.
Minted more than a century ago, they're in severely limited supply today and contain nearly a half-ounce of pure gold. Yet they trade for relatively small premiums over their underlying gold value, making them a great buy in bulk gold.
$10 Liberty coins were the workhorse currency of U.S. economic expansion in the late 19th and early 20th centuries. Almost all were heavily used in circulation or melted down during the gold confiscation of the 1930s. Precious few of these beautiful, historic coins remain in AU condition. This fundamental scarcity can drive premiums higher during periods of increased demand.
We’re telling our clients who want to add some potential muscle to their holdings at no extra cost that these U.S. $10 Liberty gold coins in AU condition are the best buy in the market today.
I really think you should let your readers know about this opportunity while it lasts. And so I am. When Dana is this excited about an opportunity, we need to listen.
I’m going buy some of these coins from Dana right now. And I’m going to partner with him to offer whatever’s left (sorry — I’ve got dibs) to our Golden Opportunities readers.
Again, these are not unlimited-mintage, modern bullion coins. They are historic, limited-supply U.S. gold coins that actually circulated over 100 years ago.
I strongly recommend that you secure as many of these $10 Liberty gold coins as you can while they’re priced lower than common bullion. Call American Gold Exchange now toll-free at 800-613-9323 and tell them you want some of the AU $10 Liberty gold coins set aside for Golden Opportunities readers. Now, let’s look the second opportunity the market is now offering us… Opportunity No. 2:
Top-Quality Junior Exploration Companies I have to tell you — today’s metals and mining share market reminds me of 2002.
Back then, gold had obviously recovered from a long bear trend. The market was still a bit topsy-turvy, but the terrible days of steadily-lower prices was behind us.
The best-positioned junior mining stocks had already taken off to some extent, and we were very happy with the profits we’d realized. But these gains were nothing like what we were going to see over the coming years. From 2002 to 2011, we saw countless of our Gold Newsletter picks multiply four, five, even 10, 20 or more times in value.
Absolute fortunes were made.
And it seems like we’re back in that enviable position once again.
The bear market of 2011-2015 is behind us, and the sector has advanced a good bit from the lows. The trend is definitely up.
And here’s the kicker: The junior exploration companies took advantage of the renewed investor enthusiasm to raise cash. And with that cash, they’re beginning to drill some outstanding targets that had lain idle during the bear market.
I’ve uncovered a number of these companies that are either drilling at this moment or within days on some truly remarkable gold and silver targets.
I expect some world-class discoveries to be made this summer.
Almost as exciting is the fact that many of these top-quality junior explorers are selling at steep discounts for the very reason I detailed above: Investors are waiting for the summer doldrums to create even better bargains.
The problem is, some of these companies are going to release drill results within days. And if those drill results are as good as I expect, their share prices are going to soar regardless of what the gold market does. So make the trend your friend, and get positioned in some of the best junior explorers while you can. All the best,
Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference P.S. Don’t forget to register for this year’s New Orleans Investment Conference, where most of today’s top metals and mining experts will be presenting their hottest picks.
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