It's Finally Time to Buy Gold

When Stansberry Research analysts agree... Cheap, hated, and now in an uptrend... It's finally time to buy gold...

Longtime readers know that whenever several of our analysts are making the same call, we always take notice...

In the October 16 Digest, we noted that our colleague Dr. David "Doc" Eifrig had just recommended that his Retirement Millionaire subscribers buy more gold for the first time in years.

In short, Doc took a look at the overall economy and came away thinking that things were getting a little "too good." And between rising inflation, super-low interest rates, and an eventual, inevitable stock market "bust," Doc said it was time to add a little more "disaster insurance" to your portfolio in the form of gold.

In that same Digest, we also noted that Steve Sjuggerud had recently started to become bullish on the precious metal, too...

Well, Steve just doubled down on that call in the November issue of True Wealth Opportunities: Commodities.

In particular, he explained that gold checks off all three of the boxes he looks for in a perfect investment: It's cheap, hated, and in the beginning of an uptrend. As he wrote...

Commodities are without a doubt a contrarian opportunity right now. And within the commodity space, gold is setting itself apart as one of the best chances at huge gains right now.

Gold recently hit its most hated level in 17 years. Traders are fed up with the metal.

I love to see this setup. It's the kind of sentiment extreme that contrarian investors dream of. And right now, it looks like we're seeing the beginning of an uptrend.

This is a rare setup in gold. It's a true "cheap, hated, and in an uptrend" opportunity. That makes this a fantastic time to get into gold.

For starters, Steve noted gold prices have been in freefall of late...

After rallying to a fresh 52-week high back in January, the precious metal has since given up all of its gains for the past year. Prices are down nearly 10% in the past six months alone. As a result, investors have once again all but given up on gold.

Steve showed just how hated gold had gotten by sharing the recent Commitment of Traders (COT) report. Longtime readers know this is report is a "real-money" indicator that shows what futures traders are actually doing with their money. As Steve wrote...

When investors feel strongly about something, they pile into one side of a trade. The rush to bet for or against an asset can get comically extreme. And that's exactly what we saw last month in gold.

Gold speculators trading large futures made the most extreme bets we've seen in the past 17 years. Betting against gold hasn't been this extreme in nearly two decades. Take a look...

However, you may notice this chart is a little different than those you've typically seen. That's because it includes a bit more than just the raw COT data. As Steve explained...

This chart is a smarter way to look at the data. It's speculative bets against gold divided by total bets over time. This smoothes out the dramatic growth of the futures markets over the past few decades.

This takes that change into account and gives a better reading for how extreme the market is right now. And as the chart above shows, we're seeing a truly rare opportunity in gold today.

Last month's sentiment extreme signaled that gold was completely hated. And that meant a price reversal was likely.

That's exactly what has happened since. Gold prices began to move higher again last month, making a "higher low" above their August bottom. And we're now seeing sentiment begin to turn, too. Together, Steve says this combination means gold is now primed for a major move higher.

By the way, Doc and Steve aren't the only ones bullish on gold around the Stansberry Research office...

In the November issue of Commodity Supercycles, editor Bill Shaw also cited shifting investor sentiment as a big bullish tailwind today. As he wrote...

The precious metal jumped more than 2% – from about $1,190 per ounce on October 1 to around $1,215 per ounce to end the month. And perhaps even more telling, gold performed best on days when stocks suffered most. You can see what we mean in the following chart...

The recent uncertainty in the markets is a good sign for gold. And there's more...

Last week, the World Gold Council – a nonprofit organization that focuses on stimulating demand for the metal – released a report that showed holdings in gold-backed exchange-traded funds rose 16.5 metric tons in October. That's a 1.8% increase in assets under management. It's an amount equal to $1 billion... And it's the first inflow in four months.

In other words, gold is once again becoming attractive to investors.

In summary, for the first time in years, all the necessary requirements for a major gold rally are now in place...

If you've been waiting for an ideal time to buy more physical gold – or a relatively low-risk opportunity to get back into gold stocks – this is it.

As always, this should not be taken as a recommendation to "bet the farm" or go "all in." In general, we recommend everyone hold 10%-20% of their savings in physical gold. And when it comes to more speculative gold stocks – which can rise or fall multiple times more than the metal itself – our standard advice about reasonable position sizes and trailing stop losses apply.

But gold is as cheap and hated as it has been in decades... and it has finally started a new uptrend. Prices are likely to move significantly higher in the weeks and months ahead.

New 52-week highs (as of 11/14/18): Procter & Gamble (PG).

In today's mailbag, it's clear at least two longtime subscribers have been following our advice. We'd love to hear how you're doing, too. Let us know at feedback@stansberryresearch.com.

"I've had to execute my fair share of stop losses these past weeks, but the lesson I'm most thankful for is position sizing based on my stop plan. I opened larger positions commensurate with a tighter stop, and right now I'm closing a greater number of positions in volatile, small holdings than large, steady companies. It is nice to have the same risk across all my holdings.

"However, the greatest perspective shift for me this week is that those reliable companies aren't just reducing my risk – these companies are where I'm making money. My less risky investments are up 10% on average and they aren't hedges – they'll be just fine when the market falls back in love with tech. Boring works – I'll still get enough excitement tending my 'Melt Up' corner, but I'm going to keep my eye out to catch more boring when it goes on sale." – Paid-up subscriber Jeff S.

"What more could I say than 'thank you.' Of the many things I have learned as an Alliance member, position sizing (part of risk management) may be the most important thing.

"Instead of going all in 100% with each investment idea, easing in with roughly 1/4 to 1/3 investment tranche may be just about the most valuable aspect of my education. I had some 'oil' positions and actually sold a couple due to stop losses. However, I kept a couple but had only committed 1/4 to 1/3 of my usual investment amount (5%) and now am able to commit further capital in an extreme oversold condition. I think that is it. Commit some capital to an 'idea,' but not all of your position size and wait.

"In summary, I am overweight in gold stocks, but by easing into my positions. My worst performer is about 10% down. Some are actually up (Seabridge, Kirkland), but none are down more than about 10%. That is a wonderful feeling. My oil positions are much smaller but by easing in, I am only down 12-15%. Perfect!

"I have learned that no matter how strongly I feel about a stock or macro movement, I am unlikely to be correct 100% of the time. By taking small positions and buying on significant dips, I sleep better at night and feel my long-term reward much more likely. Thank you, Porter and crew." – Paid-up Stansberry Alliance member Mitchell F.

Regards,

Justin Brill Baltimore, Maryland November 15, 2018