It makes me smile when investors rush into gold stocks only AFTER they’ve gone through the roof.
It’s not a bad thing. It’s just not the ideal time to buy — that’s all.
But it makes me want to CRY when gold is in a confirmed bull market … then pulls back a bit … and THEN investors shy away.
Because that’s the single BEST time to buy.
So I bet you’d like me to alert you when that happens, right?
Haha! Yeah, I’m laughing again. It’s right now:
As you can see from the chart above, we’ve got the confirmed bull market (which is very big).
Plus, we’ve got the pullback (which is relatively small).
Combined, they give you what could be a great entry point for gold — either right here or very close.
And even more so for select gold shares that can rise 10x faster than bullion.
What Caused The Pullback?
Nothing, really. It was just time for a normal correction.
The better question to ask is: What was the excuse for the pullback?
Well, on Thursday, China said that it was close to a trade deal with the U.S. — a deal which involved rolling back tariffs. This news sent investors into “risk-on” mode yesterday, and so they sold gold.
Then on Friday, President Trump pushed back, saying the U.S. HADN’T agreed on tariffs.
“They’d like to have a rollback,” Mr. Trump told reporters at the White House. “I haven’t agreed to anything.”
So, what we’ve basically got in the market is a geopolitical version of the “woman-yells-at-confused-cat” meme …
After all, we know what the big picture — the megatrend — in gold looks like …
Gold ETF inflows are surging. Yes, this could change at any time. But we have to acknowledge that ETFs are stuffing their pockets with gold like kids at a candy store.
In a report this week, the World Gold Council said global gold-backed ETFs saw $1.9 billion of net inflows last month. Holdings in ETFs hit a new high of 2,900 metric tons.
Central banks are buying hand over fist. Here’s a chart from my friends at U.S. Global Investors that shows ALL demand for gold …
If we want to break out just central bank gold buying, the Financial Times has done that for us …
In fact, central bank purchases of gold in the second quarter rose 47% year-over-year. That pushed total demand for gold in the first half of the year to the highest level since 2010!
And that buying continued on to the third quarter, so batten down the hatches. This makes 10 years in a row that central banks are on track to be net buyers of gold.
The global financial system is under incredible stress. Negative interest rates? That sounds like something an economist would come up with if he was trying to write science fiction. But we have those in Europe, Japan and elsewhere.
Some $12.5 trillion of bonds globally — and fully 30% of the developing world’s sovereign debt — currently have negative yields. That’s off its highs, but that shouldn’t reassure anybody.
Economists assure us we won’t have negative rates in the U.S. Yeah. Keep sipping the Kool-Aid, bud.
Oh, and the U.S. yield curve inverted. That’s a reliable indicator of recession. It has since un-inverted, but only after full-bore — one might even say heroic — efforts by the Federal Reserve.
And then there’s the fact that the U.S. federal debt whipped past the $23 trillion mark like Wile E. Coyote on rocket skates.
I attended the New Orleans Investment Conference this past week. And I saw one speaker after another make powerful arguments for being long on gold. There were a few bears … but not many. Most are looking at the big picture, and it’s bullish indeed.
Did you miss me in New Orleans? If so, no worries!
Just sign up for my gala question-and-answer session. Here are the specs …
Title: High-Profit Gold Stock Forum: Ask Sean ANYTHING
Date: Tuesday, Nov. 12
Time: 2:00 PM Eastern
Your cost: Zero!
Next step: Just click here for automatic registration.
All the best,