Simultaneous, Unprecedented Gold News
I’ve been a gold analyst for almost 20 years and I can tell you that right now, trying to keep track of the various data points and news updates for gold and gold stocks is bewildering.
Every day it seems like I find another crazy, never before seen trend or piece of news about gold. I firmly believe we’re still in the early innings of this gold bull market, and the stories I’ve found today support that belief.
First up is a story that I bet most people would never even imagine hearing 12 months ago.
The head of currency sales for US Bancorp is a woman named Paula Comings. She recently told Bloomberg that foreign traders no longer want to be paid in dollars.
She said, “A lot of clients previously were reluctant because dollars were sacred in the eyes of the supplier. Now the vibe from overseas vendors seems to be, ‘Just give us our currency.’”
Foreign investors are dumping dollars too – as US Treasury securities have been crushed over the past 5 years. I don’t think that’s hyperbole: 30 year Treasury securities are down 46% since 2020…
That kind of bond destruction is part of the reason why I believe this gold trend is not just an ordinary, short term uptrend. It’s a long-term, widespread sea change in the currency markets…
At the same time, we know that global competitors like China have been buying up gold for years. Some analysts believe China is attempting to at least partially back its Yuan with gold. How much gold does China have at this point?
No one really knows. That’s because China appears to be buying gold in secret, or at least not reporting its actual gold purchases very accurately.
Last year, Goldman Sachs revealed it believes China is buying more gold than it’s reporting:
Goldman said, “Our estimates of China’s Institutional Gold Purchases in London are consistent with PBoC reports, but tend to be higher, start earlier and persist longer.”
In other words, China says they’re buying an inch, but then it looks like they’re probably buying a foot.
A story out of MarketWatch explains it all…
“Gold is the new risk-free asset in people's mind,’ said George Catrambone, head of fixed income, Americas, at DWS, in an interview – adding that, right now, 10-year and 30-year Treasury securities clearly weren't favored as safety plays.”
Even though we’re seeing bullish stories like this for gold nearly every day, gold stocks are STILL trading for massive discounts to fair value.
For the 1st time in 50 years, gold has pushed much higher while gold stocks are lagging.
Investor allocation to the sector remains near the lows. Gold stocks will go higher until investor assets in gold rise from below 1% to greater than 5%.
Gold is climbing the wall of worry.
And it’s only getting more advantageous to earn my favorite kind of gold stock.
That’s why I’m releasing a special project on Wednesday the 18, at 10 am ET. I'll showcase which types of gold companies I think you should own to see the biggest profits from this ongoing bull market.
Keep your eyes on your inbox at 10 am this Wednesday for my biggest announcement of the year.
Good investing,
Garrett Goggin, CFA, CMT
Lead Analyst, Golden Portfolio