Right now, the Treasury market is working off a severely oversold technical condition, as well as a near-record speculative net-short positioning. That’s pushing prices higher — and yields lower. Additional catalysts for higher Treasury prices (lower yields) include …
European election uncertainty, with French far-right candidate Marine Le Pen gaining traction.
Safe-haven inflows off IMF blowback over the Greek debt situation that’s unsustainably high.
Fading expectations for quick passage of Trump’s pro-growth proposals.
I don’t think this condition will last too much longer. Once it cools, I’m looking for Treasury prices to take a hit — and send yields higher. When that happens, I’ll have a great way for you to play it. So, stay tuned for trades designed to take advantage of higher interest rates coming your way soon.
For now, …
Continue working your open order to buy a best-of-breed royalty mining company: Royal Gold, Inc. (RGLD). RGLD receives royalty streams from 38 producing and 24 development gold and silver properties.
The company’s latest quarterly earnings report was spectacular, helped by the rebound in gold prices and robust production metrics. Additionally, RGLD posted record operating cash flow that was up 34 percent from the year-ago period. The company yields 1.3 percent at its current share price of $71.45.
My recommendation: Using 3 percent of the funds you have allocated to Income Investments, buy Royal Gold, Inc., symbol RGLD, on a pullback to $60 or better. When filled, place a good-till-canceled protective sell-stop at $51.33.
In the meantime, …
Hold Westlake Chemical Partners LP (WLKP), and maintain a good-till-canceled protective sell-stop at $18.07. Your position has open gains of 33.6 percent, including an annualized dividend yield of 5.6 percent.
If not on board WLKP, use 5 percent of the funds you have allocated to Income Investments and buy at the market. Be sure to place a good-till-canceled protective sell-stop at $18.07.
Hold GAMCO Global Gold, Natural Resources & Income Trust (GGN), and maintain a good-till-canceled protective sell-stop at $4.21. While trading slightly below your entry level, it sports a generous dividend yield of 10.7 percent. Reinvest the dividends to compound your return.
If not on board, you may purchase GGN at the market, using 5 percent of your Income Investments funds. Place a good-till-canceled protective sell-stop at $4.21.
