Growing up in a corner of my Florida, there was an old gas station on the edge of Everglades. The owner did a lot of business with his large, hand-painted warning signs:
Last chance for gas
On the other side of the fuel pump was Dufer’s thin two-lane ribbon and 90 miles of waterlogged desert. There is no smartphone. There is no “emergency call box”. And, in most places along the highway, there is no maintenance.
You were yourself – much like the economic wilderness we are all forced to navigate today.
The sharp fall in gold prices and mining stocks is much like a warning sign … and a financial gift …
In short, if you’ve been looking the other way since this year’s Monster Rally, this is your second chance to buy gold at these prices – and I think your last chance. And it comes just in time.
Common trends for gold
Over the past 12 months gold has traveled all over the buyer’s senses: from the ‘most disgusting product’ of all time in the world 12 months ago to around তার 1,050 an ounce this summer to কিনতে 1,350 an ounce of “must buy it”.
Now that gold has fallen from that height, an investor may ask further: “Gold, what have you done for me lately?”
All in all, the gold of the 2017 rally has returned about 60%. Yet the sharp fall is a preliminary bull market for this volatile metal after the resumption of the higher broad trend. The most famous of these pullbacks was the gold run at an all-time high in the seventies.
Starting at 35 35 per ounce in the early S0s, as Americans regained ownership of gold, the price of bullets rose to about 190 190 in 1975. It continues on its own. Over the next 18 months, the price of gold returned almost 60%, falling to 100 100 over the next three-and-a-half years before reaching the then-record $ 800.
The song remains the same
Most importantly, when it comes to companies that dig these things out of the ground … Nothing has changed.
As I mentioned in the past few months, gold mining companies have done a great job at making money to reduce their costs and boot.
We noticed in early February that the elite companies of this group paid an average of 5 215 per ounce of gold dug out of the ground and told anyone who wanted to hear it in uncertain terms: “Stop selling panic gold mining stocks.”
Similarly, after gold prices fell in 2014 and 2015 and dividends fell, many of the same companies not only re-established payments, they started raising them again. In the meantime, mining companies have cleared up much of their old cost structures. That’s why Newmont Mining has been able to bring down its “AISC” – always in-sustain cost – from $ 1,170 in 2012 to 10 10,910 from 201 so far.
The bottom line is that there are many reasons to own gold: for speculative gain, as discussed above; For insurance; And to preserve resources. But you can’t take any of those strategies without taking advantage of the low price of gold and the low expectations that are on our table by the hair trigger traders on Wall Street.