Gold

After three years of pain, can gold stocks break their losing streak and see a gain in 2014? History says the chances are good. Here's why that is the case.

In the last several months, the world economic crisis has entered a new elevated level of perma-crisis and constant tension, widely recognized as something more serious, more dangerous, and more risk-filled. This new normal is neither without resolution nor the attempt to resolve anything and, as such, is why the price of gold will rise to $5,000 per troy ounce, then higher, and at the same time, the silver price will rise multiples higher. Let me explain.

While the waterfall decline in gold stocks is painful for those of us already invested, the reality is that this is a setup we get a shot at only a few times in our investing life. It's a cruel irony that those who are fully invested are now faced with the buying opportunity of a lifetime; however, it would be a shame for anyone to miss this blood-in-the-streets opportunity.

Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves.

We are near a low in gold and resource shares and, over the next few years, fortunes will be made by those investors staying the course and remaining committed to this investment sector. As Rick Rule says, “you have stayed for the pain, will you not stay for the gain?”

Many events moved the market this month which are all very bullish for gold. In addition, gold’s leading indicator is currently at a major low area all of which strongly reinforce the likelihood of an upcoming sustained rise. Let us explain.

We all think the price of gold, the metal, is depressed and is about equal to the total cost of production but when one compares the price of precious metals mining companies to the price of gold bullion, their prices are at historical lows. It seems that the mining shares can only go in one direction...up...but when and by how much? This article suggests it presents the greatest opportunity in 30 years. Look at the charts! Absolutely unbelievable.

It is our belief that this is by far the most comprehensive report yet. That said, those that compare this report to 2012 will notice significant differences in the final metrics which suggest that, unless we have high-grade, high ounce deposits that are being fast tracked online, it will be very difficult to find a way to get supply to match demand.

Gold stocks are up 16.8% in the last 13 days while the S&P 500 has declined by 3.4%. Should gold stock investors and speculators worry about the effect of a deeper decline or cyclical bear market on the mining sector? History says no.

The current unnatural control over the natural forces of Supply/Demand could continue much longer than most expect - the disappointing expectations for 2013 may repeat in 2014. Here is how we see the developing “story” that explains why gold and silver have not changed trend.