Will we see a short squeeze in gold?...

Will we see a short squeeze in gold?... Poor job numbers boost precious metals... Record bearishness on gold today... Nailing the low in silver... The dollar rally could soon end... April Fools' joke or amazing new technology?...
 

 Are we on the verge of a massive short squeeze in gold?
 

U.S. companies added 126,000 workers in March – well below expectations of 246,000 and down more than 50% from the 264,000 in February.
 

It was the lowest monthly total since December 2013... and lower than even the most bearish forecast from Bloomberg's polled analysts. The unemployment rate stayed steady at 5.5%.
 

The poor economic news initially pushed stocks and bond yields lower (though the market recovered as of midday trading). Gold soared as much as 1.8% to around $1,220 an ounce for the first time in seven weeks.
 

 Gold is up, in part, because bad economic news means interest rates could stay lower for longer than previously expected. The Federal Reserve is expected to raise interest rates in the second half of this year.
 

As we've noted in previous Digests, lower interest rates around the world make gold (with its zero yield) more attractive... especially when around $2 trillion of European government debt has negative yields.
 

But gold is also likely rising because short sellers are unwinding their positions...
 

As of last week, short holdings of gold rose to 84,022 contracts, according to U.S. Commodity Futures Trading Commission data... That's the highest short interest since data started getting collected in 2006.
 

 Gold's cheaper cousin, silver, was up 2% today. A special kudos to DailyWealth Trader editor Brian Hunt on this topic...
 

In the March 18 issue, Brian advised subscribers to buy a "Monster Box" of silver – a box containing 500 one-ounce silver coins. He wrote...
 

On average over the past 15 years, one ounce of gold could be traded for about 60 ounces of silver. But right now, the price of one ounce of gold is $1,146... And the price of one ounce of silver is about $15.59. That puts the "gold-to-silver" ratio at 74 today.   In other words, silver is 19% cheaper than average right now, in terms of gold. As you can see in the chart below, the ratio has only been higher than it is today two times in the past 15 years.     Silver is cheap relative to gold right now because silver has suffered a terrible bear market since early 2011. After reaching a peak near $50 per ounce in early 2011, silver has crashed to below $20 per ounce.

 Brian's timing couldn't have been better...
 

Silver is up to more than $17 an ounce today. It closed at $15.47 an ounce on March 18... near the metal's five-year low of $15.17 an ounce in February 2010 and just pennies above the metal's 52-week low of $15.35 an ounce in November.
 

The gold-to-silver ratio is down to 71.5 today... but still high by historical standards.
 

 We're not surprised by the recent rally in precious metals...

The U.S. dollar has been on a tear. And that's bad news for gold prices.

As we noted in the March 17 Digest, the dollar hit its highest level since 2003, appreciating 25% since July 1.

Bullish sentiment toward the dollar is at an all-time high. And speculators have more bullish bets on the dollar than ever before.
 

We had a situation in which the U.S. dollar was the most loved it had ever been and gold and gold stocks were close to the most hated they had ever been.
 

This type of extreme sentiment and price appreciation (in regard to the dollar) normally means a correction is coming.
 

We believed that when investors pulled money out of the dollar, a lot of that money would find its way into gold (a much better alternative than yen or euros, in our mind).
 

 While gold and silver are rallying, there's still a long way to go...
 

Given today's market action, Steve Sjuggerud's call in Friday's Digest is looking incredibly prescient. He pointed out that gold-exploration stocks are down 90% from 2011...
 

And the gold-stocks-to-gold ratio is at its lowest point since 2000, when gold stocks soared 300% in the following two years.
 

In the latest issue of True Wealth Systems, Steve recommended three small-cap gold stocks he believes will soar hundreds of percent as this rally picks up steam.
 

 Again, despite today's big move in gold stocks, Steve says the biggest gains are yet to come. He told us through e-mail...
 

It's a good day to be a gold investor. Gold prices are ripping higher today. They're up around 6% in the last three weeks. Gold stocks have followed suit. The Market Vectors Gold Miners Fund (GDX) was up nearly 3% and the smaller-cap Global X Gold Explorers Fund (GLDX) is also up nearly 4%. But we have to put all of this into context...   GLDX is still down roughly 90% in the last four years. Gold prices are still down more than one-third from their all-time highs in 2011. And despite the recent move, anyone who has owned gold or gold stocks for a year or more is looking at serious losses. That's why I believe today's gains are the beginning of a much larger move higher. Today is a great day... but the upside from here is absolutely huge.   Gold stocks are cheap, hated, and beginning an uptrend right now. They're exactly the kind of investment I look for. This is a real opportunity for hundreds of percent gains quickly in the right companies. But today is just the start. I expect these gains to continue for a long time as gold prices continue moving higher.

 For the full analysis on Steve's bullish gold stock call, be sure to reread last Friday's Digest. You can also learn more about True Wealth Systems and how to access Steve's three junior gold recommendations (which are all still in buy range) by clicking here. (Don't worry, there's no long promotional video to sit through.)
 

 "Is this an April Fools' Day joke?"
 

That was the first thing we thought when we saw the article about Amazon's new Dash Button.

The Dash Button is a little plastic button with adhesive tape on the back. Doing the laundry and notice you're running out of detergent? Press the Dash Button stuck to the front of your washing machine. Two days later, a package will arrive with your Tide refill. Shaving and notice you're down to your last razor blade? Press the Dash Button near your sink and two days later, a new pack of Gillette razor cartridges will arrive.
 

Amazon's Dash Button is part of a trend researchers are calling the "Internet of Things" (or IoT).
 

 The IoT is more than just a buzzword. It may end up being one of the largest investment trends since the Internet itself. It involves connecting everyday devices – from refrigerators to heart monitors – to the Internet. Take Starbucks, for example. Right now, people use Starbucks' Wi-Fi to connect their phones, laptops, and tablets to the Internet. It might sound silly now, but in a few years, every "thing" in the store – like the espresso machine and the cash register – may have its own connection, too.
 

When this wave of machine-to-machine communication emerges, it will usher in a new age of automation. According to Michael Nelson, the former director of Internet technology at IBM...
 

Trying to determine the market size of the Internet of Things is like trying to calculate the market for plastics, circa 1940. At that time, it was difficult to imagine that plastics could be in everything. If you look at information processing in the same way, you begin to see the vast range of objects into which logic, processors, or actuators could be embedded.

According to financial news website Business Insider, the Internet of Things will overtake the Internet of smartphones, tablets, and PCs market in terms of the number of devices later this year. By 2018, it'll be more than twice the size.

Research firm Gartner says the Internet of Things will connect 26 billion units by 2020.

In a report from networking giant Cisco, between 2013 and 2022, $14.4 trillion of value (net profit) will be "up for grabs" for enterprises globally, thanks to the Internet of Things.
 

 Early investors in this trend stand to make fortunes. There are literally millions of opportunities for the companies that make the devices and benefit from the information the devices supply.

Our colleague Teeka Tiwari – editor of Mega Trends Investing at our corporate affiliate, The Palm Beach Letter – has prepared a full report on the Internet of Things. He covers the full extent of the opportunity, explaining what the Internet of Things is, and how it's going to affect the economy.

His report includes five stocks that investors should buy right now to profit from this trend, including a leading chip maker for wearable devices, the top company in wireless Internet, and the only company in the world that possesses the technology to print in 3D the powerful electronic circuits that will drive the Internet of Things.

You can learn more about how to access Teeka's report by clicking here.
 

 New 52-week highs (as of 4/3/15): none (market was closed for Good Friday).
 

 "I am 26 and am lucky enough to be able to dedicate a large percentage of my earnings into investments. 2015 is my third year investing and Stansberry's Investment Advisory, Retirement Millionaire, True Wealth, the Digest, and DailyWealth have helped me fall in love with learning about investing.

"I hope to take advantage of my age as much as possible and invest today with a forever timeline. Which newsletter would be most suited to this? This has me thinking... I work in youth education and you often recommend subscribers to educate their children.
 

"A newsletter that combines your distinct, effortless mission to educate us on timeless investment principles with some recommendations that target great asset allocation opportunities and super long term compound interest investments could be marketed to current subscribers for their children, teens, and young adults.

"When a peer asks me how to get started, I'd feel safest recommending them to a letter written by Stansberry. There is definitely a need, can't promise there's a market, to bring your amazing educational message to youth and especially young adults. So the next time a young adult asks me how to get started I'd love to be able to recommend the correct newsletter." – Paid-up subscriber Sam Allen
 

Porter comment: Well, my Investment Advisory, of course...
 

 "I am a paid subscriber with a complaint/problem. A recent email said:
 

With his decades of experience, Steve has this knowledge. And yesterday, he recommended the three best junior mining stocks to his True Wealth Systems subscribers. You don't often have the chance to buy these assets after a 90% selloff. This opportunity comes around once every decade or so... and when it arrives, you should take advantage of it.   And yesterday, he recommended the three best junior mining stocks to his True Wealth Systems subscribers.

"HOWEVER, when I pulled up True Wealth there is no such recommendation. I would like to see and perhaps invest in the recommendations." – Paid-up subscriber T. Pender
 

Goldsmith comment: Steve recommended the stocks you're referring to in your e-mail in True Wealth Systems, not True Wealth. True Wealth Systems is a trading advisory using quantitative computer models to search for opportunities across various markets and sectors.

The companies he recommended in True Wealth Systems are far too small to handle the volume from all of Steve's True Wealth subscribers. But as we explained today, he believes these companies have hundreds of percent upside from here. If you'd like to access those recommendations, you can sign up for True Wealth Systems by clicking here.

Regards,

Sean Goldsmith

April 6, 2015