The uptrend in gold is here...

The uptrend in gold is here... The world's largest gold fund's assets are soaring... Bitcoin is not a great place to store your wealth... IMF and Iran give deflationary scares... Central banks are buying more gold... A special way to buy gold stocks...

 The uptrend in gold is here...

 The precious metal rose more than 1% today to more than $1,290 an ounce – a five-month high. (Silver rose to nearly $18 an ounce for the first time since September.)

 The Market Vectors Gold Miners Fund (GDX) is up more than 3% today to nearly $23 a share... officially in breakout territory. In the January 15 issue of the Stansberry Short Report, Jeff Clark wrote...

GDX has short-term resistance near $22 per share. But if it can break above that level, the next resistance line is up near $24.

 The SPDR Gold Shares Fund (GLD) – the benchmark gold fund – is up more than 9% in 2015. The fund lost 2.2% and shed $3.2 billion in assets last year.

According to Bloomberg, the fund's gold holdings increased 3.3% last week, the most since May 2010. And holdings jumped 1.9% last Friday – the biggest single-day move in nearly five years.

 People are shifting back into gold in a big way... They're scared the European currency union will begin quantitative easing on Thursday. And the Swiss National Bank's decision to unpeg from the euro further spooked markets.

For more on the bull case for gold, reread yesterday's Digest. We shared bullish outlooks from Jeff, Stansberry Resource Report editor Matt Badiali, and True Wealth editor Steve Sjuggerud.

 In short, gold is one of the last remaining safe-haven assets that hasn't been bid to the moon. As we wrote yesterday, when interest rates are near 0%, "gold becomes highly competitive with money in the bank." We quoted Steve...

Governments can print more money, but they can't print more gold. So when you're given the choice between earning zero percent over the next five years in government-printed paper dollars, or earning zero-percent interest in a hard asset (like gold) that can't be printed, which one makes more sense for you to hold?

 It turns out our call to hold gold over Bitcoin proved correct...

Bitcoin stole the headlines in late 2013. The virtual currency staged a massive rally. And many readers wrote in to tell us we were missing the boat. But we were confident that we were on the right side of the argument. (So was Steve Sjuggerud, who wrote his dissertation on currencies.) Our money was still on gold.

We dedicated much of the November 27, 2013 Digest to the topic. We wrote...

Bitcoin supporters compare the currency to gold... And people are talking about it at cocktail parties... We're not so convinced. As far as we're concerned, Bitcoin is still a currency backed by nothing. The dollar is backed by the full faith and credit of a lying, cheating profligate government – one that (for now) remains the most powerful in the world. Bitcoin is perpetuated by some anonymous computer geeks... and backed by no one. And for now, they're still priced in dollars. Remember... our fundamental belief is that real money is backed by something tangible... something you can hold in your hand. Computer-generated numbers don't solve that problem. What's to stop people from gaming the system or changing the rules?

 As we noted, the popularity of Bitcoin reflected increasing skepticism with conventional, government-created money...

People have seen how the government's shenanigans can wreck paper money... and they want an alternative. They're not wrong. But most people don't really understand money... so they're running to the next big idea. We can't predict the future of digital currency. But we doubt the antidote to fiat currency is paperless digital credits... For now, we continue to urge you to put your faith in real, hold-in-your-hand money – and that means gold and silver bullion.

 At the time of our essay, Bitcoin traded for $948.41. Four days later, it peaked at $1,124.76. By January 1, 2014 it was down 31% to $770.44. As of today, it's down another 70%-plus, to around $211.

Last Wednesday, the virtual currency fell nearly 30% alone. If you had put $10,000 into Bitcoin on November 27, 2013 – the date of our Bitcoin-focused Digest – it would be worth around $2,200 today...

 This is how speculative booms always end. Meanwhile, gold bullion, a true store of wealth, is up more than $50 an ounce during the same time period.

 The International Monetary Fund (IMF) and Iran gave the world another deflationary scare today...

The IMF cut its global growth forecast for this year and next by 0.3 percentage points – projecting 3.5% growth this year and 3.7% growth in 2016.

Iran's Oil Minister Bijan Zanganeh said he doesn't see a shift in OPEC's oil policy any time soon and the industry could survive a further decline in oil prices toward $25 a barrel.

The announcements sent copper down 1.2% to $2.58 a pound. Oil fell 4% to less than $47 a barrel.

 The IMF warned that falling oil prices could lead to deflation. Its answer, of course, is for central banks to stay accommodative. From the IMF's report...

[Lower oil prices] will also lower inflation, however, which may contribute to a further decline in inflation expectations, increasing the risk of deflation. Monetary policy must then stay accommodative to prevent real interest rates from rising, including through other means if policy rates cannot be reduced further.

 With no end to easing in sight, the case for gold only gets stronger... And what are central banks, the administrators of quantitative easing, doing with their money? They're buying gold...

In an interestingly timed announcement yesterday, Germany's central bank Bundesbank said it repatriated 120 tonnes of gold from Paris and New York to Frankfurt. As Bundesbank executive board member Carl-Ludwig Thiele said in a statement...

The Bundesbank successfully continued and further stepped up its transfers of gold. Implementation of our new gold storage plan is proceeding smoothly. Operations are running very much according to schedule.

Germany has the second-largest gold holdings behind the U.S.

 And Russia raised its gold reserves for the eighth month in a row in November, adding 18.8 tonnes for a total of nearly 1,188 tonnes. Turkey also raised its gold holdings by 12 tonnes to 533 tonnes, according to the IMF.

 We always recommend you own some physical gold as a form of savings. In times of real crisis, it will be the most valuable asset there is. If you'd like to up your allocation to physical gold, we recommend calling up Van Simmons at David Hall Rare Coins or Rich Checkan at Asset Strategies International.

As always, we receive no compensation for recommending their services. They just always treat our readers well. (You can reach Van at 1-800-759-7575 or by e-mail at van@davidhall.com, and you can reach Rich at 1-800-831-0007 or by e-mail at contactus@assetstrategies.com.)

 Our analysts are bullish on gold stocks. But you don't want to buy just any gold stock... Most of these companies are net destroyers of wealth.

It's important to only focus on the best gold-mining firms... And our friend John Doody, the best gold-stock analyst we know, created a proprietary method for picking the world's best gold stocks.

John's method nearly doubled the return of gold between 2001 and 2014, returning 636% versus gold's 344.9%. The S&P 500 returned just more than 100% during the same period.

He has been perfecting this strategy over decades. And he has amassed an eight-figure fortune putting his own money into these stocks.

Plus, John just told us he has recently been piling more cash into a handful of gold stocks.

 Outside of a small group of gold bugs, John's methods are largely unknown.

That's why a self-proclaimed "financial survivalist" recently published the details online... so that individual investors like us can use it to potentially make thousands of dollars on gold in 2015. You can learn more here.

 New 52-week highs (as of 1/19/15): Osisko Gold Royalties (OR.TO).

 We answer a question about Doc Eifrig in today's mailbag... but things are still pretty quiet. What's on your mind? Have we nailed a call or completely missed something recently? Let us know at feedback@stansberryresearch.com.

 "Doc, I bought your High Income Retirement book and I appreciate the work you put into publishing this valuable information. My problem or question is how far ahead do you look for selling covered calls? When I look at the stocks I want to use this strategy on, I do not see any fantastic premiums to collect. Certainly nothing that would add any substantial income to my retirement. I'm not asking for individual investment advice, but in general, what kind return should I be expecting for covered calls?" – Paid-up subscriber Eric Jones

Goldsmith comment: As Doc explains on page 4 of High Income Retirement, "This strategy can be used to safely and conservatively generate 15% or more in annual income on a retirement account (or regular portfolio). And it is safe. Right now, Doc's record stands at an unprecedented 203 for 205 closed winning positions... good for a 99% success rate. His average return has been 49.2% annualized.

Doc typically charges $3,000 to teach his Retirement Trader subscribers how to use this strategy. But in High Income Retirement, he explains how this income technique works, step-by-step, and which companies are ideal to use this strategy on to safely generate extra income. He doesn't give out any specific buy recommendations in the book. But he does cover everything you need to know about his trading strategy without requiring you to spend $3,000 on any expensive trading services.

When you read about Doc's strategies and start using them to collect a steady income stream, you'll agree... the cost of the book is an absolute bargain. If you're interested in claiming your copy (without sitting through a long promotional video), click here.

Regards,

Sean Goldsmith

January 20, 2015