The Next Gold Boom Is Here
Editor's note: Longtime readers know we've been waiting for this moment...
Over the past several years, gold prices have drifted aimlessly between $1,100 and $1,300 an ounce.
Until now, that is.
In recent months, gold has taken off. And as our colleague Steve Sjuggerud explains in today's Masters Series essay – excerpted from the July issue of his True Wealth Opportunities: Commodities newsletter – history suggests that the recent breakout means the bull market in gold is just getting started...
The Next Gold Boom Is Here
This is it, my friend.
This is the big one. The one we've expected to happen... The opportunity we've already positioned ourselves to profit from.
If you're like me, you've been waiting on this for a while. It seems like year after year, we get a teaser. A minor run higher that fizzles out.
It's been frustrating to watch. But as best I can tell, this is no flash in the pan. This is the real thing.
The next gold boom is here.
I don't say that lightly. Lots of folks have made the same proclamation in recent years, only to see gold prices fall and prove them wrong.
Gold prices have staged solid rallies over the last few years. But they've all ended the same way... with no major breakout and an eventual decline.
That's not happening today. Gold has finally staged a major breakout. The metal soared above $1,400 an ounce last month. We haven't seen prices that high since 2013.
If you've read my work for long, you know I always look for the uptrend. I like to find beaten-down, left-for-dead ideas... and then buy them after they've started going up. That's the safest way to earn the biggest profits.
Well, the investment community sure forgot about gold. It left the metal for dead, no doubt about it. And it's no surprise, given the price action we've seen.
The metal spent years and years falling... bottoming out 45% below its 2011 peak. It was enough to scare anyone off. That's why the recent rally is so important.
Not only has gold staged a major breakout... but the way it happened says that this is likely just the start. It tells us even higher gold prices are on the way.
More than that, we have two other fundamental reasons to expect that this could be the start of a long-term rally. The Federal Reserve is likely on a path to lowering interest rates. And thanks to plenty of uncertainty in the markets, gold is poised to do well.
We're already profiting from all of this. We recommended our gold Masters of the Universe to get ready for this day. These companies have done fantastically well. But again, this is just the beginning.
The next gold boom is here. This month, I'll share all the events that tell us that's the case. And we'll take another look at our gold Masters of the Universe... to cover why we've already put our money to work in the best possible places right now.
Let's get started...
Why Gold's Massive Breakout Points to Higher Prices
The recent gold rally has been swift and powerful.
A few months ago, it seemed like the rally that had been underway was ending. Gold prices had rallied more than $100 an ounce from their 2018 bottom through their February high. But then, prices started falling.
It looked like the same story we've seen playing out in recent years... another promising rally ending before it really got going. But that's not what happened.
Instead, gold achieved what it had failed to do for years. It staged a major breakout, jumping double digits in less than two months.
The metal also soared above $1,400 an ounce for the first time in years. Take a look...
The price of gold jumped 7.3% in a two-week stretch. And as the chart above shows, the recent breakout was a big deal.
Gold had been dead money for nearly a decade. The 2000s boom culminated in a major top in 2011, near $2,000 an ounce. Then prices fell nearly 50%...
The decline was moderate at first. Then it was an outright crash. Prices eventually bottomed in late 2015... But the damage to investor psychology was done.
Folks stopped thinking about gold as an important piece of a smart investment portfolio. Instead, they saw it as a foolish bet, especially given the incredible run we saw in stocks over the same period.
That's likely why the rallies in June failed. The metal would start to pick up steam, but there were never enough buyers to kick off a major rally.
Gold tried to break back above the psychological $1,400-an-ounce barrier several times in recent years. It came close in 2016 and 2018, but it failed both times.
And it looked like we were destined for a repeat this year... until the furious June rally.
Since gold blasted above $1,400 an ounce in June, the metal has been in a clearly defined uptrend.
If you've read my work for long, you know how important this is when it comes to investing. It doesn't matter how cheap an opportunity is, or how universally hated it happens to be in the investment community. If you don't have the trend in your favor, you're stuck waiting.
We have the trend in our favor now. And make no mistake, the recent breakout is huge for gold going forward. It soared to a new 52-week high during the June rally... And history says that should lead to further gains.
To see this, we tested what happens to gold after it hits a new 52-week high. We looked back more than four decades and found a not-so-surprising result...
Gold tends to keep soaring after it hits new highs.
Again, this isn't surprising to us. But in the general investment community, most folks have a hard time believing the trend is so powerful. The numbers prove it in this case, though. Take a look...
Again, these numbers cover more than four decades of history, going back to 1973.
Gold has been a solid performer since then, returning 5% per year. But the metal has a tendency to trend... When it crashes, it really crashes. And when it soars, it really soars.
Buying gold after a new 52-week high led to more than triple the typical six-month and one-year returns for the metal. And that means the big gains for gold are likely to continue.
Yes, we've already seen double-digit upside in gold in recent weeks. But history says we could easily see another 19% gain over the next year.
In short, when gold starts working, it tends to keep working. And it's really working right now.
Good investing,
Steve Sjuggerud
Editor's note: Investors are piling money into gold at the fastest pace in years, and prices are taking off. To make the biggest profits, you need to own the absolute best gold stocks.
That's why it's more important than ever to follow our colleague John Doody's gold-stock strategy. Over the past 18 years, John has outperformed gold... gold funds and ETFs... and even the S&P 500 with his proprietary strategy.
And today, he believes the precious metal is on its way to $2,500 an ounce... or more. In fact, he's guaranteeing that he can help you at least triple your money on one of his top gold ideas, starting now. Get the details here.