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Jeff Clark is Editor of BIG GOLD and Explorers’ League at Casey Research (http://www.caseyresearch.com). Having worked on his family’s gold claims in California and Arizona, as well as a mine in a place to remain nameless, these days Jeff Clark focuses on following some of the most successful... More
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  • Here's What The Next Gold Bull Market Will Look Like

    We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975.

    We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)

    Even more enticing is that the biggest one-a 601.5% advance in the early 2000s-occurred just after a prolonged bear market.

    And our current bear market is longer than that one.

    To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks.

    We can't show you our entire portfolio out of fairness to paying subscribers. But look what those gains would mean to GDX, the Gold Miners ETF (based on the June 1 price).

    Gold ETFCurrent
    Share
    Price
    1976-
    1980
    1982-
    1983
    1986-
    1987
    1989-
    1990
    1993-
    1994
    2000-
    2003
    2005-
    2008
    2008-
    2011
    554.2%205.1%141.8%51.5%99.9%601.5%206.4%272.5%
    GDX$19.49$127.51$59.45$47.14$29.53$38.96$136.72$59.72$72.60

    Keep two things in mind about this table:

    1. The percentage gain from each past bull market is calculated using an index. The stronger companies will perform better than a static ETF.
    2. It's not unreasonable to think that the gains in the next bull market will be similar to some of the higher returns listed above. That's because stocks will be rising from the depths of one of the more severe bear markets.

    Here's what the price for popular royalty company Royal Gold would look like if it matched past bull markets.

    Royalty
    Company
    Current
    Share
    Price
    1976-
    1980
    1982-
    1983
    1986-
    1987
    1989-
    1990
    1993-
    1994
    2000-
    2003
    2005-
    2008
    2008-
    2011
    554.2%205.1%141.8%51.5%99.9%601.5%206.4%272.5%
    Royal
    Gold
    $64.23$420.21$195.93$155.34$97.30$128.38$450.56$196.79$239.26

    You might think royalty stocks won't show similar gains going forward. It's true they've already performed well. However, it's more likely they'll be wildly popular than anything else. That's partly because there are only a few of them in this industry.

    Now take a look at the prices our top silver pick would hit.

    Silver
    Producer
    Current
    Share
    Price
    1976-
    1980
    1982-
    1983
    1986-
    1987
    1989-
    1990
    1993-
    1994
    2000-
    2003
    2005-
    2008
    2008-
    2011
    554.2%205.1%141.8%51.5%99.9%601.5%206.4%272.5%
    Top
    BIG GOLD
    Silver Pick
    $3.71$24.27$11.32$8.97$5.62$7.42$26.02$11.37$13.82

    If silver rises along with gold in the next bull market-something we think is extremely likely-this small niche market will absolutely soar.

    No other sector is as depressed as the mining sector. A return to anything close to some of the stronger past bull markets will hand us tremendous gains.

    The June issue of BIG GOLD focuses on the top silver pick listed in the table. I'm convinced it will at least triple from current levels in the next precious metals bull market.

    We have two very specific reasons why it will do so. And these two factors are unmatched by almost any other mid-tier or major producer.

    Get our analysis along with the name of this stock in the just-released BIG GOLD.

    We also include a special offer on bullion that has numismatic potential. These coins sell at bullion prices, yet will likely return much greater profit than standard bullion. And they come at discounted prices you won't find elsewhere.

    It's "The Two Best Silver Plays to Buy Today"-a highly actionable issue that tells you exactly what to buy and why. Get it now.

    Tags: gold
    Jun 02 3:40 PM | Link | Comment!
  • The Message From Last Week's Headlines: Don’t Dare Sell Your Gold!

    Have you noticed the trend in mainstream headlines over the past week?

    The gold price may be stagnant, but forces behind the scenes signal that something big is gelling.

    What conclusion would you draw from this rundown of recent headlines?

    China Creates Gold Investment Fund for Central Banks. China announced a new international gold fund. Over 60 member countries have already invested. The fund expects to raise 100 billion yuan ($16 billion). It will develop gold mining projects in the new Silk Road economic region.

    China Could Send Gold Up At Least $200. Saxo Bank's Steen Jakobsen says China's multibillion-dollar Silk Road Initiative will prompt Beijing to pull money out of Europe and the United States for infrastructure investments elsewhere. This could send commodities higher and push Europe into recession. As a result, his 2015 price for gold is $1,425 to $1,450, more than $200 higher than its current level.

    Red Kite Launches New Base and Precious Metals Fund. The fund has already deployed almost $1 billion in equity, loans, and royalty streams into at least 17 junior mining firms. It hired a physical metals trader to handle all the supply. The fund will likely fund underserved juniors that have struggled to get funding.

    Texas Senate Passes Bill to Establish Bullion Depository for Gold and Silver Transactions. A bill to make gold and silver legal tender in Texas passed in the state senate by an overwhelming 29-2 vote. The bill essentially creates a way to transact in precious metals. It will allow citizens to deposit precious metals in the state depository and then use the electronic system to make payments to any other business or person who also holds an account.

    Gold Smuggling in India at All-Time High. Customs agencies seized over 3,500 kilograms of gold (112,527 ounces) in 2014-15, the largest stash ever confiscated in Indian history. The report says gold smuggling has grown by 900% in just two years. It also estimates that seizures could be less than 10% of actual smuggling.

    Russia Boosts Gold Holdings as a Defense Against "Political Risks." Dmitry Tulin, monetary policy manager at the Russian central bank, said it is increasing its gold holdings because "it is a 100% guarantee from legal and political risks." Part of the motivation is certainly that their overseas assets could be frozen if sanctions over the Ukraine crisis tighten.

    Austria Repatriates 110 Tonnes of Gold from UK. Austria is repatriating 110 tonnes (3.53 million ounces) of gold from the Bank of England. It eventually wants to have 50% of its holdings stored at home. The country has reportedly been transferring its official gold reserves from unallocated to allocated accounts in recent years, and also reduced its leased gold by 60%.

    D.E. Shaw Buys $231 million of GLD. D.E. Shaw & Company bought $231.07 million worth of SPDR Gold Trust last quarter. This is a new position for the company.

    Canadian Fund Makes $700 Million Bet on GLD. Canadian asset manager CI Investments purchased a whopping 6,117,900 shares of GLD last quarter, worth $703.6 million. GLD is now the single largest holding of the fund-bigger even than its position in Apple.

    More Funds Increase Their Shares in GLD… A Swiss investment bank increased its position in GLD by 490%, to over 4 million shares. Lazard Asset Management doubled its holding to over two million shares. Morgan Stanley increased its holding by 8.3%, and Blackrock Group added 167% more to its position.

    Traders Buy Gold and Silver at Fastest Pace in Over a Decade. Large speculators haven't bought silver this aggressively since September 1997. Net speculative longs in gold also added over 45,000 contracts, the most since July 2005.

    HSBC Warns Titanic Global Economy May "Collapse." The chief economist of the world's third-largest bank, HSBC's Stephen King, has compared the global economy to the Titanic. "We may not know what will cause the next downswing, but at this stage we can categorically state that in the event we hit an iceberg, there aren't enough lifeboats to go round. The world economy is like an ocean liner without lifeboats."

    Global debt has soared by 40% since the Great Recession. It's now $200 trillion, almost three times the size of the global economy. "It would be a truly titanic struggle for policymakers to right the economy," King said. He doesn't specifically mention gold, but…

    IMF Says China's Currency Is "No Longer Undervalued." The International Monetary Fund declared that China's currency is "no longer undervalued." The statement is a major vote of confidence for Beijing and the renminbi. Recall that China wants its currency to be included in the IMF Reserve basket.

    I predicted China would update its gold holdings to increase the likelihood of getting that acceptance. And that they could surprise the market by announcing a higher amount than the mainstream expects.

    It's one reason I bet Harry Dent that gold won't fall to his predicted $700 level. I'm so confident I put up my own gold. He did, too.

    Check out our 17-page report, where we each argue our case. You can read it free of charge-just enter your email address here, and you can access it immediately.

    The report includes eight "proof points," along with the details of our wager and the date the winner will be announced.

    Which headline will you read in early 2017-Jeff Clark Wins Two Ounces of Gold, or Harry Dent Bests Gold Bull Jeff Clark? I invite you to read our debate and decide for yourself. Enter your email address, and see who wins!

    Tags: gold
    May 28 11:36 AM | Link | Comment!
  • History Shows A Gold Bull Market Is Fast Approaching

    Yearning for sunnier skies for your gold investments? How's this sound…

    • Gold in a decisive bull market, with the price steadily rising
    • Silver soaring and outpacing gold's gains
    • Gold stocks rocking, erasing underwater positions and racking up the profits

    That's not pie in the sky wishful thinking-it accurately describes the next stage of the gold market, something that will soon visit your portfolio.

    With the price of gold currently stuck in place, like a stain on the front of your best shirt, and the stocks only teasing us like Lucy holding the football for Charlie Brown, how can I be so sure?

    Because that's exactly what happened after every other bear market. For example…

    • 1976. Bear market ends, and gold begins a 701% run in less than four years.
    • 1985. Bear cycle ends, bull cycle begins. Gold gains 71.8% over the next three years.
    • 2001. Monster gold bull cycle delivers a 630% advance over the following 10 years.

    As I pointed out last month, markets cycle. The current range-bound price for precious metals won't last forever, for the simple reason that they never have, especially in the resource market.

    If you set your sights on the big picture, you'll see that in spite of today's negative emotions, gold's future prospects will render them a distant memory.

    Consider some of the likely changes on the horizon and how they will transform the gold market from flat and listless to exciting and profitable…

    • Stock market reversal. The performance of the broader equity markets is probably the biggest reason gold hasn't attracted the mainstream. But stock markets cycle, too, and a correction is due, perhaps overdue-the S&P is up six straight years and nine consecutive quarters. Margin debt is higher now than it was preceding the 2008 crisis, and corporate profits saw the biggest drop in four years last quarter. Gold will be the benefactor in the reversal, especially since it's already corrected.
    • Recession. The probability of a future recession is 100%. The only question is when and how big. GDP last quarter was barely positive. Any unexpected surprises to the downside for the economy will be especially positive for gold.
    • Currency war backfire. This "race to the bottom" being pursued by global central bankers won't work long term. At best, countries steal growth from their trading partners. At worst, it can disintegrate into inflation, recession, retaliation, and even war. Currency wars have happened before-twice in the last century alone-and they've always ended badly. One guess what asset performs well in a crisis.
    • Higher interest rates. We're skeptical that the Fed will actually raise rates, but eventually the market will force rates higher regardless of the Fed. This, in turn, will hurt the real estate market. Meanwhile, those analysts that blindly assume rising rates are negative for gold forget that real rates (nominal interest rate minus inflation) are positive for gold-an almost certain outcome because of…
    • Inflation. The emergence of inflation feels far off, but already there are signs it's picking up. Wages have started to move higher, what is normally the starting point for inflation. Ground beef prices are now at record highs and have more than doubled since 2010-increases like this can't go unaccounted for indefinitely. Remember, we don't have to wait for high inflation for gold to move; it's the onset of inflation, or an unexpected jump in inflation, that will spur gold.
    • US dollar reversal. If you've grown tired of the dollar's "strength," don't leave the theatre early. Its rise is certainly not sustainable long term, and in time will be forgotten. Nothing stays standard deviations above the norm forever. And eventually the dollar will collapse, because the trajectory of our debt isn't mathematically sustainable.
    • Bond market turmoil. As my colleague Dan Steinhart pointed out in The Casey Report, there are currently $3.6 trillion in negative-yield government bonds outstanding today, mostly in Europe and Japan, giving investors zero chance of making money or even breaking even. The sad outcome here is that inflation will massacre the average bond holder.

    My point is that any reasonable big picture view of the political, financial, and economic trends show that virtually all of those changes will be very positive for gold-and aren't that far off.

    It will be a new day for the gold market, one full of rising prices and profitable investment statements.

    But despite all this evidence, there are those in our industry still calling for gold to fall.

    Among the loudest is my colleague Harry Dent.

    He says gold will drop to $700/oz.

    Of course, I think he is dead wrong.

    And I bet Harry bullion from my private stores that gold will never drop to that level.

    He took the bet. And to help you decide who will win (hint: it's me), Harry and I each put all the research we've assembled to form our predictions into a special 18-page report titled Gold: Dead or Alive?

    For anyone who owns an ounce of gold or single share of mining stock, this is a must-read. And it's completely free. Click here to get your copy.

    Tags: gold, bull
    May 19 1:04 PM | Link | Comment!
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