Picking Up Gold Nuggets from the Dustbin

For months now, I’ve told you gold is in a new bull market. You may have thought I had rocks in my head when the yellow metal got dumped along with everything else in the recent liquidity crisis.

But that’s not the case at all. Not if you look at the big picture.


 

The big picture shows us that gold broke out last year and is still zig-zagging higher. And when gold is in a bull market, pullbacks are buying opportunities.

Indeed, there are multiple forces that should push gold higher no matter how the virus impacts the stock market.

Like Dr. Martin Weiss, I believe the fear of the virus is worse than the virus itself. But there’s no denying that fear has a real impact on global travel, trade and economic activity.

That fear and market tumult also caused a broad asset liquidation, including gold and miners. In other words, investors were forced to sell precious metals and miners to cover margin calls in other investments.

That was terrible for the gold stocks at the time. But man, what a buying opportunity this is handing us.

After all, we know what the official response to the COVID-19 pandemic is. Governments around the world are firing off the money cannons, flooding the system with trillions of dollars of currency.

Add in the fact that bonds are now yielding near zero, and it’s very hard for gold NOT to rise in this environment.

After the brutal bludgeoning that gold and miners received lately, you may find that hard to believe. But it’s an old truth of Wall Street that the biggest gains often come after huge selloffs.

And to me, now, it looks like many fantastic miners have been dumped in the garbage. Even while they continue to make money … REAL money … as governments around the world are firing up the printing presses on fiat currency.

So, with that in mind, here are three gold miner funds that look dirt-cheap. Pick any of them up now, and you might look back later and realize you picked up a gold nugget out of Wall Street’s dustbin.

  1. VanEck Vectors Gold Miners ETF (NYSE: GDX). This fund holds a basket of the big gold and silver miners. It has an expense ratio of 0.53%.
  1. VanEck Vectors Junior Gold Miners ETF (NYSE: GDXJ). This fund holds a basket of mid-tier miners and has an expense ratio of 0.54%.
  1. Global X Gold Explorers ETF (NYSE: GOEX). By its very nature, this basket of gold explorers and developers is more speculative than the GDX or GDXJ. It is more thinly traded and has an expense ratio of 0.65%.

All three of these funds look cheap. On March 19, both the GDX and GDXJ traded at discounts to their net asset value, or total assets minus liabilities.

That’s rare — and it won’t last long. Not when we just saw what could be proven to be a historic bottom in gold. Once that’s confirmed, prices will rise again. Look for bargains like these now.

All the best,

Sean

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