Back On The Move

Gold and silver are powering back toward their recent highs today.

Does this mean the bull market is back in full force?

August 17, 2020

Dear John,

Last week I told you to ignore the big sell-off in gold and silver and to instead focus on the big picture.

Today I’m telling you to ignore the big rally in gold and silver and to focus on the big picture.

The point is, the metals are going much higher over the coming months and years, thanks to truly massive spending, debt creation and money printing. The primary concern should be where we’re going, and not how we get there.

So a big drop in prices doesn’t mean you misinterpreted the major trend. And a big rise doesn’t mean you missed the boat.

We’re going higher — much, much higher — and there will be plenty of time and opportunities to make money along the way.

That said, there’s no time like now to get involved.

A Good Day

Today I watched the sun rise over the beach on the Mississippi coast and soon had trout hitting my lure on every cast as I waded between the sandbars. Then I walked back to our condo, checked the markets and found gold up $40.

It’s been a good day so far.

As I write, gold is up about 2% and silver is leveraging as we want it to with a gain of about 4% on the day.

The impetus for these moves is two-fold: A drop in the Dollar Index (it’s fallen below the key 93 level) and news late Friday via a quarterly filing that Warren Buffet’s Berkshire Hathaway had invested over half a billion dollars into Barrick Gold.

The Buffet news was all the buzz on financial Twitter this weekend, with gold bugs claiming the Oracle of Omaha — long renowned for hating gold as an investment — had suddenly seen the light.

Equally active were the snarky pundits decrying the gold bugs as hypocrites for calling Buffet an idiot when he denigrated gold and a genius when he started buying it.

As usual, the truth lies somewhere in between.

For one thing, we don’t know when Berkshire bought that stake in Barrick; all we know is it was sometime in the second quarter. Which means that Buffet may have well bought during the worst of the crisis-driven sell-off (as we did), which would be just to his form as a value investor.

Second, we don’t know who made the decision to buy Barrick, Buffet or one of his lieutenants.

And finally, Buffet bought Barrick the gold mining company, not gold itself. And from a value-oriented point of view, Barrick was a great opportunity in the second quarter.

So this nugget of information isn’t so much an endorsement of the merit of owning gold as it is another example of gold getting into the headlines and exposing even more investors to the argument for investing in the metal in these unprecedented times.

To what degree news of Berkshire’s foray into gold mining stocks is behind today’s rally in the metals is tough to say. In contrast, it’s easy to see the tide of public perception turning in gold’s favor.

More and more investors every day are coming to understand the factors we’ve been talking about for years. And many of them have very deep pockets.

Once again, this is a trend that will last for years and will take the metals much higher, so there’s lots of money to be made.

How much higher? Robert Kiyosaki called me over the weekend to ask my opinion on how much upside gold had from here. I told him that I couldn’t put a fine point on it, but if you used past bull markets as a gauge gold should go up three to eight times from its bear market lows.

That would put this next price peak somewhere between $3,000 to $8,000.

Anywhere within that range, we’re going to make lots of money in both the metals and the junior miners we focus on in Gold Newsletter.

So if you’re not already a member of the (very) happy Gold Newsletter family, CLICK HERE to join up now.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference