Chris Vermeulen of The Technical Traders believes the next supercycle for mining stocks will commence later this year or sometime next year. He says these supercycles can be life-changing if investors get the timing right. However, the U.S. dollar will likely have to weaken for gold and other precious metals to really break out. He reminds investors that these mining supercycles are often fleeting, stating,
“They only last for a handful of years. But you can make a ton of money. So, that time is coming.”
Finally, he notes,
“Everybody always wants trades to happen, but these major cycles take a long time to unfold.”
Falling Precious Metal Prices
While mining stocks had been outperforming, they were all down Thursday as gold and silver continued to sell off. U.S. stocks saw their largest decline in more than two years on Wednesday. Investors are skittish as we approach an important news period next week, which includes an interest rate decision from the Fed as well as U.S. employment data.
Despite rising precious metal prices since the start of the year, Vermeulen is correct in stating we are still not in a mining stock bull market. Investors will have to be patient, as one more painful shakeout is likely in the cards.
Watch the full podcast HERE.
Copper Price Drop Not Reflective of Market Fundamentals
Copper prices are now down over 20% from record highs in May. Forecasters predict the world will see annual copper supply deficits for years to come as new mines aren’t coming online fast enough.
Countries are ramping up decarbonization and clean energy initiatives, which rely heavily on copper and they are the key demand drivers behind the base metal.
Professional geologist Steve Robertson explains the industry’s challenges and what happened to the stock price of a recent exploration success story in Idaho.
U.S. Dollar Standing Tall, Despite Years of Devaluation
Few things in this world are constant, but when it comes to fiat currency, inflation is almost always a factor. Despite the U.S. Dollar index holding steady above 104 on Thursday, inflation has run rampant in the U.S. for years.
Gold and silver got crushed on Thursday, down nearly 2% and 4%, respectively. Still, over the long term, gold has performed very well, achieving roughly an 8.5% average annual return for the last twenty years.
Legendary mining investor Rick Rule explains why he has owned gold for more than 20 years and what he sees for the price of the precious metal in the future. Rule makes a bold statement, saying,
“I don’t think a move to 7,000 dollars or 8,000 dollars or 9,000 dollars is out of the question. I don’t think it’s going to happen. But I remember the period from 2002-2010… the gold price moved from 256 dollars an ounce to 1900 dollars an ounce. A seven-fold move.”
Click HERE to watch the full podcast.
