by E.B. Tucker, Casey Research:
Chris’ note: At the time, it seemed like a wild prediction…
Back in December, Strategic Trader editor E.B. Tucker went on record saying gold would hit $1,500 an ounce in 2019. Gold was sitting at $1,237 at the time… down 35% from its 2011 peak. Today, gold sits at $1,425. E.B. says $1,500 is still a lock.
How was he able to predict this big rally?
For those who don’t know, E.B. is a true gold expert. Before working in the newsletter business, he co-managed a precious metals equity investment fund. Today, he serves on the board of a successful gold company. In short, he has deep connections in the gold business. And he knows the best ways to set his readers up for big profits.
I work closely with E.B. on his newsletters. And our gold stocks are soaring right now. One of them is up 113% in just the last month and a half.
I wanted to know if this recent rally will be short-lived… or if it’s the start of the next great bull market. So I called E.B. over the weekend to see where we’re headed…
Chris Reilly, managing editor, Casey Daily Dispatch: E.B., your prediction back in December now seems like a lock. Gold’s on a tear and just struck a six-year high. You recently said that this is a critical indicator… Why’s that?
E.B. Tucker, editor, Strategic Trader: If you look at a longer-term chart of gold, it hit a high in 2011 of around $1,920, and then it went down until 2013. Since then, it’s stalled out… gone nowhere. And when something goes nowhere for six years, it’s very important to watch that.
Especially when, at the same time, we’ve had radical central bank experiments going on with our money… one of the most confusing stock market rallies of all time… and out-of-control government spending.
My point is this: Gold went nowhere during that process. So when it recently jumped to a six-year high, that’s a huge indicator for us. It means it will go to a much higher price.
That period of consolidation – that six years of going nowhere – was a time of building pressure.
For six years, gold has been building energy, stuck in the pressure cooker. And now the lid’s about to come off. And it’s going to blow through the kitchen ceiling.
Chris: What else are you seeing today that tells you this is the start of something big?
E.B.: Here’s the thing: People still don’t believe what’s happening is true. Gold has been beaten down for so long, no one believes that what’s going on will last… They think surely the price will head back down.
Now’s the time to make your investment and sit tight. Even if gold goes down a little bit here, the trend is in place for it to go higher. And the guys running these companies – the leaders of the industry – are demoralized right now. They’re beaten. They just can’t possibly even believe that there could be a gold rally.
This is exactly what you want to see right before a massive rally.
This is a cyclical market. When gold was at $1,920, you had Mr. T doing commercials. You had “Cash for Gold” signs everywhere. Those were overenthusiastic conditions. And then at the bottom of the market, you have the opposite. You have guys who have been in the business their whole lives saying there’s no way any price jump is real.
Chris: Not only is the recent jump real… you recently said we’re going to see the “motherlode of all gold rallies”… and that this will be different than anything we’ve seen in recent memory.
Can you give me an example?
E.B.: That’s exactly right. Right now, I’m watching the bigger gold companies to see what’s really happening.
Since the first of June, the fund for large-cap gold companies [GDX] is up 30%.
The fund for smaller gold companies [GDXJ] is up only 34%.
Now, typically those smaller companies are up double the big companies. Because that’s where people speculate, thinking they’ll have a bigger run. And the bigger companies aren’t as exciting.
This rally that’s happening right now is in the big, serious companies.
It’s in physical gold, and it’s in the multibillion-dollar names. It’s very abnormal. Very different.
The established companies are strong. And this also tells us it’s the early stages of serious money coming in to bet on gold. Serious money isn’t looking for a 50-cent stock on the hunt for a gold deposit in a far-off place. It wants stable companies that make money. And that’s what we see happening right now.
Chris: Great stuff, E.B. Any other catalysts readers should know about before we go?
E.B.: Another thing that stands out about this recent surge is that summertime is usually a slow time for gold. People go on vacation. They’re out of the office. So these huge investors and hedge funds don’t have time to have committee meetings to make decisions about buying gold.
This is important because most of these funds have no gold. They’re more likely to have a crypto allocation than a gold allocation.
So this is something that’s caught people off guard. We’re going to see this actually accelerate as these institutional funds start to chase gold higher because they were unprepared for the spike that we saw over the past six weeks.
Everything’s lining up for a monster gold rally.
Chris: Thanks, E.B. Sounds like Casey readers have a lot to look forward to.