Gold Miners ETF (GDX)

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4 Charts that Reveal the Once-in-a-Lifetime Opportunity in Gold Stocks
By: the daily gold | June 16, 2022

If you are bullish on Gold and would like to know about little-known opportunities to make 185% or more, please pay close attention.

Thanks to a combination of historically low valuations, strengthening fundamentals, and the most inflationary monetary and fiscal policy over the past 100 years, we are looking at a once-in-a-lifetime opportunity to make record profits over the next few years.

I am not talking about buying physical Gold or Silver.

And I am not talking about buying gold indexes or senior mining stocks either.

Rather, I am talking about junior miners... small gold operations that can double, triple, even quadruple in price in a short period of time.

For example, one junior gold producer rocketed 317% in 18 months.

A junior exploration company shot up 155% in just 2 months.

And a little-known nano-cap silver junior surged 300% in 10 months.

Premium subscribers had a chance to earn these gains.

Thanks to the correction in the market, the best part is that the opportunities to profit over the next 12 to 24 months could be even better.

Here’s why...

First of all, the timing could not be better.

Gold performs best when stocks are in a secular bear market, and expected future returns from stocks and bonds are historically low.

Gold’s performance in recent years was limited by conventional stocks being in a secular bull market.

However, the secular bull market in stocks is likely over, and the current expected returns from a conventional 60/40 portfolio (60% stocks, 40% bonds) are near their lowest in history.

Hence, Gold is finally in a position to start what should be at least a decade-long bull market. Gold gained 2300% and 650% in its previous two secular bull markets.



Next, consider that Gold has formed one of the most bullish patterns possible, known as a “cup and handle pattern.”

When Gold can break above $2,100/oz, this pattern will trigger a measured upside target of $3,000/oz and a logarithmic target as high as $4,100/oz.

Historically, Gold has made three significant multi-year breakouts. The coming breakout will be the fourth.



Next, look at the Gold price required to back the US monetary base. This is calculated based on the fluctuations in the Gold price, the monetary base, and US gold reserves.

Note that the two historic peaks in the Gold price (in the 1930s and end of the 1970s) occurred at 100% backing of the monetary base. Gold would have to reach $24,000/oz for that today!

During the financial crisis in 2008, Gold reached a 30% backing of the US monetary base. For 30% backing today, Gold would need to rise to $7,250/oz.



Finally, the gold stocks remain extremely cheap on a historical basis.

In the chart below, we plot a historical gold stock index against the S&P 500. In addition, we plot the CAPE valuation metric (for the stock market) at the bottom.

Note, when the CAPE ratio is historically high, as it is now, the gold stocks can massively outperform the stock market over the years ahead.



Let’s recap.

Gold stocks have moved off their historic lows but remain extremely cheap on a historical basis. Moreover, the only other points in history when they were this cheap (the 1960s and 2000) delivered spectacular returns over the next ten years.

Meanwhile, Gold is in position for its fourth major breakout of the last 40 years and has a measured upside target of $3,000/oz and a logarithmic target of $4,100/oz.

Furthermore, Gold would have to gain roughly 300% to attain, relative to the monetary base, where it was in 2008.

In short, the setup for Gold and gold stocks over the next few years is one of the best ever. They are poised to move much higher, but my focus is on the junior mining sector, where select companies could rise 5-fold, 7-fold, or even 10-fold over the next 24 months!

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