The Next Gold Bull Is Here

On June 10, 2019, I told you to get into gold now.

The second half of the year is upon us and so is the new gold bull market we’ve all been waiting for.

I’ll be honest, I’m a bit giddy. Not only because the new gold bull market is here, not because gold is past $1,400/oz. and breaking out in all currencies, not because there isn’t a lot of resistance between $1,400 and $1,550, but because despite a clear emerging trend, the market, specifically the juniors, are not reacting like it.

Which means I get more time to bolster up positions.

Let’s look at some numbers.

ETF holdings increased their assets by 32 tons recently, the biggest increase since 2016, according to data tracked by Bloomberg.

Bloomberg also reported that SPDR Gold Shares, the largest exchange-traded fund backed by a commodity, attracted almost $1.6 billion on June 21, 2019, the most since its inception in 2004.

This came on the heels of the highest close since 2013 and has led the GDX 21% higher in June.

A lot of the capital inflow had been short covering or unwinding of hedges. We are nowhere near the speculative part of this cycle.

As I’ve explained before, you have to treat markets like Wayne Gretzky treats hockey pucks... go to where they are going.

The majors are reaching first — as they typically do — with companies like Barrick, Gold Fields, AngloGold, Ashanti, and Yamana gaining nearly double digits.

All this within a backdrop of multi-year lows for bonds and the rest of the world catching on to the fact that the Fed is trapped and has to cut — not raise — rates to ward off the rest of the world imploding.

I’ve explained for years that for me to believe the gold rally was real it would have to rise alongside all other currencies and alongside the dollar.

How many times have you heard me say the dollar is the cleanest dirty shirt in the currency basket? When comparing it to other currencies, gold has responded beautifully.

jmt june 2019 img 1

The $1,354, $1,363 and $1,374 that were resistance have now become support. A retest back down to the $1,363 level on a closing basis would not surprise me.

So where does the puck (gold price) go next?

The same people who couldn’t see the Fed cutting, not hiking, are now calling for four rate cuts by the end of the year. That’s not going to happen either.

What will happen is at least two cuts that help balance the deflationary pressures around the world... for now.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 26827.60 0.74%
S&P 500 2990.35 0.25%
NASDAQ 8101.23 0.69%
TSX 16407.04 0.12%
TSX-V 542.27 0.00%

Resource Commodities

Name Last Change
Gold 1490.55 0.16%
Silver 17.57 0.17%
Copper 2.59 2.587
Platinum 901.00 0.67%
Oil 53.93 1.06%
Natural Gas 2.32 0.65%
Uranium 24.88 0.00%