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GDX: New Highs By Year End?

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Published : August 04th, 2020
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Category : Gold and Silver

The main theme for gold and silver investors right now is what I call the “SHO” theme; space helmets on!

Simply put, as I predicted several years ago, gold (and silver) are becoming accepted as a major asset class for wealth building.Institutional money managers are first to embrace this new paradigm, but it won’t be long before Western retail investors accept it too.

Because gold is so incredibly well-supported here in the $2000/ounce price area, many miners can become growth stocks that keep rising in price for years even if gold itself rises only modestly.

Silver is on the verge of another beautiful upside breakout.  Eager investors should get positioned now, both in bullion and the silver miners.  If the triangle flunks, the buying opportunity simply becomes more awesome… but I don’t think it will flunk.

Sadly, many libertarians are wasting their time ignoring US government debt while gleefully minimizing the Corona virus, instead of focusing on the great charts of gold, silver, and hundreds of awesome mining stocks.

On a personal level, this lack of focus on what really matters often leads to wealth destruction.

On a government level, debt without productivity creates inflation, and the US government is now solidly on that path.

My strongest suggestion for all gold bugs is to look at a mining stock chart before reading a “Corona is not that bad” article.Focus on getting richer first, and focus on worshipping the government later, or never.

As 2019 wound down, I urged US stock market investors to focus on stock picking.The 2020 virus cycle has really brought that theme home to roost:

Online businesses are booming while oil company stocks look like fallen turnip truck workers left in the dust of electric cars.Stock picking continues to be the winning play for the US stock market, while “most boats are rising” in the gold stocks market!

Gold looks fabulous, and if it rallies to my $2070 target, many miners could see 20%-100% gains…just from here!

Citibank analysts are about as positive as I am in the short-term.Their $2100 and $2300 targets seem logical.

The $2300 price in particular… that would really lock $2000 in as a major floor to keep great rallies for the miners going, for many years!

The fabulous long-term gold chart.

2020 was my virus cycle year for America.I predicted that “General Corona” would carpet bomb the US economy and the health of millions of citizens, and of course that’s exactly what has transpired.

2021 is my war cycle year, and it probably begins like 2020 did, with the government bragging that they have it all under control.This war cycle could begin with a “He’s Innocent” judge/jury verdict for alleged murderer Derek Chauvin, sparking gargantuan race riots that devolve into civil war.

There are other hot spots though, like India’s deteriorating relations with Pakistan and China.It could be a US attempt at regime change in Iran or elsewhere that goes badly awry.

The US “Creep State” (government and central bank) has already shown it is unwilling to kill QE even in the strongest part of the business cycle.It’s unwilling to have significant higher rates on government debt and significantly lower rates on citizen credit card debt.

QE for the people would be the Fed using printed money for purchases of citizen credit card debt rather than for disgusting purchases of bank OTC derivative bets and T-bonds.The Fed has no interest in QE for the people, but the government’s Corona handouts do go to Main Street.Those handouts are called Corona crisis stimulus, but they are likely the testing ground for ongoing UBI, universal basic income.

Like QE, the stimulus payments may be stopped temporarily, but they are likely to become a permanent “feature” of the US economy.

The debt-oriented actions of the US government are becoming inflationary, and even without a war cycle, that means gold and especially silver have a tremendous floor under current prices.

The awesome GDX chart.The current corrective drift could be ending, and any move by gold above the current highs should see GDX and key component miners leap dramatically higher.

Eager investors can buy now, with an optional stoploss at $41 or $40.A move above $43.50 should bring in fresh momentum buying.A blast to all-time highs by year-end could be in the gold bull era cards!

Kirk, on the gold bull era starship bridge, out.

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form, giving clarity of each point and saving valuable reading time.
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