After a long dip at the end of last year, gold has climbed back up toward record highs, and has spent this last week waltzing just above $2,000. Does this mean a return to all-time-high territory?
There are many factors that suggest gold could sustain these high levels:
The SVB banking collapse will linger much longer than anyone would like. As JP Morgan head Jamie Dimon told investors in his recent annual letter: “It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative.”
Ex-Treasury Secretary Lawrence Summers sys the probability of a US recession is increasing. He cites a string of negative economic signals (a manufacturing slowdown among them). He also noted that the Federal Reserve is nearing the conclusion of its interest-rate hike cycle, and says, “The Fed needs to engage in some serious soul searching.”
The spring conflict in Ukraine continues to pull on global stability — and despite the heartbreaking loss of life, it’s only one small factor in a much greater global showdown. US-China relations continue to wither (it’s not just about Taiwan) and are likely to lead to increased costs from trade fallout. The IMF warns the outlook for growth is grim: “For 2023, global gross domestic product will likely expand by less than 3%.”
While the dollar has held so far against declining bond yields, it can’t hold on forever. Several research firms now say the dollar could weaken 10% or more by 2024. According to the so-called “Dollar Smile” theory, the dollar only needs to outperform other currencies to maintain its strength, even if the global economy is foundering. From where I’m standing, that’s a risky gamble.
Gold is the hedge against each and every one of these nagging concerns. While it’s still too early to make lasting predictions, it’s “just in time” if you want to catch the very real possibility that high gold prices are here to stay — and that they’ll reward gold investors.
If you haven’t put any money into gold stocks yet, this is an ideal moment.
And here’s a good place to start: not long ago our publisher and gold guru Nick Hodge returned from a trip to a new gold mine. He visited the drill site and inspected the sample cores himself. (And he recorded a video of his entire trip. It includes all the on-site questions he asked the CEO and management.)
Nick believes that this gold mine is in a good position to capitalize on the rising gold prices — just as other mines did the last time gold was this high.
“I think history is about to repeat itself. This time with one of America’s biggest gold discoveries. Remember, I’ve been able to figure out this company’s true wealth potential because of my position as an early start-up investor... and because of what I learned on this boots-on-the-ground visit to the mining site in Idaho.
Few outside of a very well-connected group of mining insiders have even heard of this company. Almost nobody knows the secret it holds. But that won’t last much longer. Once details of this mine’s true potential go public... and they will soon... I think this miner will begin a breathtaking ride.”
This is your chance to position yourself for record gold gains — while the upside remains strong.