In a major surprise to analysts worldwide, the U.S. dollar turned out to be the best performing asset of 2018 while precious metals got stuck in a range. Also stunning was the movement of the gold-silver ratio above 85, which has only happened three times since 1971. What’s the significance of this for precious metals investors, and what’s looming on the horizon for gold?
Eager for expert insights on the gold market as we move headfirst into the new year, Wealth Research Group had an enlightening conversation with Brien Lundin of Gold Newsletter, the oldest precious metals advisory in the world, located on the worldwide web at GoldNewsletter.com.
One of the top performing newsletters in the space, G old Newsletter has ranked among the world’s leading precious metals and resource stock advisories since 1971. Brien Lundin began his career working with the visionary Jim Blanchard, one of the original gold bugs in America, who founded Gold Newsletter to advocate for the return of the right of legal gold ownership for Americans.
A prominent precious metals investor, Mr. Lundin is also the host of the famed New Orleans Investment Conference, the world’s oldest and most respected gold investment event. To learn more about this mega-conference, we encourage you to visit www.neworleansconference.com.
Courtesy: Brien Lundin
With an 85-to-1 gold-silver ratio in effect, Wealth Research Group turned to Mr. Lundin for his ideas on what to make of this rare phenomenon. According to Brien Lundin, when the gold-silver ratio gets to this extreme level, this typically presages a major run in silver.
The explanation for this, according to Brien Lundin, is because in a longer-term secular gold bull market, we see silver outperform gold; silver makes bigger moves than gold in both directions, to the upside and to the downside. Because of silver’s outperformance, a lot of investors like to buy silver when the economic trends are favoring higher gold prices.
Thus, according to Brien Lundin, you’re typically going to make more percentage-wise in silver when you’re in a gold bull market. So, when we get to these extremes in the gold-silver ratio, it shows an extreme in sentiment; when silver is very cheap compared to gold, you’re seeing a potential turning point in the market.
Furthermore, gold mining stocks tend to lead and outperform gold, and they serve as a signal that gold prices may be rising, according to Brien Lundin. In addition to being a leading indicator of gold’s possible future direction, gold mining stocks can provide leverage to traders and investor seeking greater returns.
As we head into a new year, investors have noted that the yield curve is flattening and on the cusp of inverting; according to Brien Lundin, this is a sign of upcoming economic weakness and is a very good recession indicator. And if a recession does happen, there’s no room for the Fed to cut rates: the average rate cut during a recession is 5%, and the Fed can’t cut that much if we’re only at 3% now.
Courtesy: Brien Lundin
With these events looming in 2019, people are going to be glad that they own gold; according to Brien Lundin, if investors can buy gold now, they can be much more prepared for the eventuality of economic headwinds and market weakness that’s ahead of us.
There’s much to learn from Brien Lundin’s conversation with Wealth Research Group, so don’t miss out on this illuminating interview with a premier precious metals expert. In addition, you’re invited to visit GoldNewsletter.com as well as www.neworleansconference.com for more information and resources in the precious metals markets.
To help you get fully prepared for what’s coming in the markets, Wealth Research Group has prepared a number of reports that you can download today. Just a few of these are our Quintessential Gold and Silver Stock Playbook with the latest wealth-building research on the precious metals markets, our guide to under-the-radar highly leveraged gold projects, as well as our Crash Blueprint, in which I explain exactly how to prepare and execute a safety plan for a financial crisis.