• Central Banks Are Buying More Gold
• Why Didn’t the Gold Price Rise Higher After Increased Demand
• Why You Should Buy Gold Now

Every week, we receive fantastic questions from your fellow readers. And recently, many of you have written in about gold.

Here are some of the excellent points you raised:

“I just saw your gold piece from Melbourne, Australia. Gold has had periods of big increases and big declines. So why buy gold now?” – Rex R.

“Why hasn’t gold pricing gone up by thousands of dollars per ounce? As the demand for gold by governments has gone up, it doesn’t make sense that gold’s value only increased by a small quantity over the last few years. If other commodities were in demand by world governments, prices would rise more than a few hundred dollars per ounce.” – Craig L.

First of all, thank you all for taking the time to think so thoroughly about what we publish. We value your input above all else.

Now, this week, I’m doing something a little different. I’m combining the different questions about gold, and answering them in a full essay.

Rex wants to know why you should buy gold now, given past periods of gold volatility. And Craig wonders why the price of gold hasn’t increased, given that central banks have been buying gold in recent years.

So let’s jump right in…

Central Banks Are Buying More Gold

When it comes to central banks buying gold, there’s a lot to talk about. But their increased demand for gold is true.

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As you can see in the chart above, global central banks increased their gold buying practices in 2022.

And just during February of 2023, global central banks’ gold reserves rose by 52 metric tons.

That was the 11^th month of increases in a row since June 2022.

The way I see it, central banks are the most reliable buyers of gold. That’s why they provide steadiness during periods of gold volatility.

And that’s why the more gold they buy, the more stable the price of gold becomes.

But they aren’t the only buyers. They accounted for just about a third of the overall demand for gold last year.

In addition to central banks, investors bought more gold last year than in 2021.

That’s why total annual gold demand hit an 11-year high of 4,741 metric tons.

Much of that was due to overall demand of 1,337 metric tons in the end of the fourth quarter of 2022.

That’s when the Fed reduced the pace of its rate hikes – or reached what I call Stage 1 of its three-stage pivot from rate hikes to rate cuts.

I’ll get to more of why that matters in a moment. But first, let’s dive into Craig’s question…

Why Didn’t the Gold Price Rise Higher After Increased Demand

There are a few reasons why central bank gold buying has not had a larger positive impact on gold prices.

You see, central banks added 1,136 metric tons of gold to their reserves in 2022.

That’s a record.

But, as I mentioned before, they aren’t the only buyers.

And there’s a lot of gold out there…

About 208,874 metric tons of gold has been mined throughout history. And two-thirds of that has been mined since 1950.

Of that amount, 46% has gone into jewelry and 22% into the making of bars and coins, including those purchased by gold-backed exchange-traded funds (ETFs).

Just about 17% has gone to central banks, and 15% to other places.

You see, mathematically, the 17% by central banks isn’t a huge portion of the overall gold demand. So even though we hear a lot about central banks buying gold, we aren’t seeing a sharp spike in gold prices because of that.

Their increase in demand isn’t having a larger impact on prices.

There’s another reason that central banks’ gold buying hasn’t moved the needle on gold prices.

In 2022, central banks added 1,000 metric tons to their total 35,715 metric tons of gold. That’s a lot of gold – but still only a 3% increase. And it wasn’t enough to push gold prices up by more.

Finally, we hear a lot about emerging countries’ central banks buying gold. So why isn’t that pushing prices up more?

This also comes down to math.

You see, the gold reserve holdings for emerging countries is below 10%. Even though some developing nations’ central banks have much more than that, this still represents less than half the allocation to gold of more advanced nations.

While central banks are buying more gold collectively, and some emerging countries’ banks are buying or holding more than others, many have yet to reach a larger stockpile of gold.

Still, as you can see in the chart below, emerging countries’ gold holdings have been rising steadily since the 2000s. This growing trend represents an upside for gold prices.

[Jim Rickards: How to Ride “The C-Day Switchover” For Big Profits]

And steady demand for an asset or commodity reduces overall price volatility.

So central banks are important contributors to gold prices going higher.

Why You Should Buy Gold Now

Gold prices rose by roughly 2% in 2022. They have risen by another 7% since the start of 2023.

It’s important to know that gold has gradually and consistently risen in price – and nearly doubled since the period just before the pandemic through now. 

Here’s why I believe this trend for gold will continue… and why now is the time to buy gold… 

1. Central banks will continue to increase their gold holdings.

That’s because central banks view gold as a currency and financial stability management tool. Gold prices relative to most countries’ currencies rise when their currencies fall relative to the dollar.

We also see the trend for emerging countries’ gold buying grow. It’s even more important for developing nations to increase their currency stability to remain economically competitive on the world stage. 

2. Stage 2 and Stage 3 of the three-stage Fed pivot mean that the U.S. dollar will weaken globally.

As a reminder, the Fed has been aggressively hiking interest rates since March of 2022. In just a little over a year, the Fed raised the Federal Funds rate from 0 to 4.75%. 

This strengthened the U.S. dollar and caused gold prices in other currencies to increase by more than they did in dollars.

Right now, the Fed is in Stage 1 of its three-stage pivot. It includes a decrease in the size of rate hikes. Stage 2 is a pause in rate hikes, while Stage 3 is a cut in interest rates.

When the Fed pivots to Stage 2 and Stage 3, this will have an opposite effect. The U.S. dollar strength will decline relative to other currencies. That means we will see the dollar price of gold price rise by more than other currencies.

And it makes buying gold an attractive investment for holders of dollar denominated bonds or other securities. 

3. Inflation is slowing down as global growth is.

Global inflation is expected to fall from 8.7% in 2022 to 7% in 2023. As it does, global growth will fall to 1.7%, according to the latest analysis from the World Bank Group. That’s a sharp drop from 2.9% last year.

But inflation will remain above central bank targets of 2%. That’s due to geopolitical tensions, such as Russia’s war in Ukraine or rising friction between China and Taiwan, that will hurt global supply chains.

Persistent higher inflation will be a driving force behind more investors diversifying into gold. Remember, gold has a historic role as an inflation hedge and a wealth preservation asset.

That’s why I’ve been pounding the table on gold.

The best way to buy gold is with a combination of physical gold and gold stocks. You can buy physical gold online through accredited places like the U.S. Mint.

You can also buy a gold ETF that is backed by physical gold. Gold ETFs offer the advantage of holding gold without the hassle of storing, securing, or transporting it.

Lastly, buying into gold miners is a great way to position yourself to profit from gold’s next rally.

Happy investing…

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Regards,

Nomi Prins
Editor, Inside Wall Street with Nomi Prins

Read more from Nomi Prins at RogueEconomics.com

It’s hard to come up with a single reason not to have at least some precious metals as protection today.

But for many investors, basic wealth protection is not enough — they want to profit. And when looking at the current state of the precious metals market, the best place to look for profit is in silver.

Silver is often called the “poor man's gold” because it offers similar benefits as gold but at a lower cost. This makes it an attractive option for investors who want to invest in precious metals but don't have the budget for gold.

But the big attraction to silver is its price volatility.

Simply put, silver prices swing more intensely than gold. That means there is more potential for higher returns over a shorter period.

Of course, that also means more potential for bigger losses. Nevertheless, silver has been a valuable commodity for thousands of years, and its value has only increased over time.

With the global demand for silver on the rise, now is the perfect time to invest in the white metal. Although the 2022 data has not been totally compiled just yet, the Silver Institute says, “Global silver demand is expected to reach a new high of 1.21 billion ounces in 2022, up by 16% from 2021. Each key segment of demand, except photography, is set to post a new peak.”

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When it comes to investing in silver, the two most popular vehicles are physical bullion (coins and bars) and stocks.

However, there are two big downsides that make investing in physical silver a pain, and those are storage and liquidity.

Storage and liquidity are also downsides to owning physical gold bullion, but for silver those downsides are intensified.

Currently priced at about $23 an ounce, silver is a much cheaper metal. That means you can buy a lot of it. A $10,000 investment buys 27 pounds of silver — and let me tell you that 27 pounds doesn’t sound too bad on paper, but moving, storing, and selling 27 pounds of solid metal is no cakewalk. It’s a lot of time, effort, and money.

Then on top of that you need to find someone ready to buy 27 pounds of your solid metal when it comes time to divest.

Compare that with owning physical gold. A $10,000 physical gold investment amounts to a little over 5 ounces. You could keep that in your pocket.

I do think investors should own some physical gold bullion, but when it comes to investing in silver, stocks are simply a much better way to get in on the action.

Many silver mining companies have seen significant growth in recent years, with stock prices increasing by as much as 300%. With silver prices projected to continue rising, there is plenty of potential for further growth and profitability.

Moreover, some silver mining companies pay dividends to their shareholders, which can provide a source of passive income for investors. Physical silver bullion does not offer this benefit.

So if you're considering investing in precious metals, owning a bit of gold bullion is a good idea, but if you want to invest in silver to leverage the market, your best bet is with silver stocks.

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Until next time,

Luke Burgess

Read more from Luke Burgess at OutsiderClub.com

• 2022 started off strong for gold…
• A major bull market of the U.S. dollar…
• If these predictions are accurate…

2022 taught gold investors a very important lesson: The value of the U.S. dollar influences gold prices much more than inflation data.

In fact, gold pretty much ignored rising U.S. inflation in 2022, despite prices increasing at their fastest levels in four decades.

The beginning of 2022 started off strong for gold.

Driven by a general rally in commodity prices stemming from geopolitical conflict between Russia and Ukraine, gold prices blew past $2,000 an ounce in the first quarter of the year.

And with inflation rapidly rising in America, many investors expected the rally in gold to continue. But that’s not what happened.

Despite annual inflation rising to a 40-year high — topping out at 9.1% in July — gold prices declined through November.

Gold Prices — One Year

It’s traditionally believed that gold prices will always increase along with inflation of prices for things like food and energy. But 2022 showed gold investors that the value of the U.S. dollar is way more important to gold than current inflation data.

Of course, there were multiple factors that contributed to gold’s price decline in 2022. But the primary factor was the Federal Reserve’s response to rising inflation and, more importantly, a subsequent rally in the U.S. dollar.

The initial response to inflation was to downplay increasing prices. Earlier this year, both the Federal Reserve and Biden administration tried to sell the public on the idea that elevated inflation levels were “transitory.”

[Exclusive: Biden To Introduce “Biden Bucks”?]

But by May the Fed flip-flopped on that message with the largest interest rate hike since 1994.

The Fed continued with aggressive rate hikes through the end of the year, taking the federal funds rate from 0.25%–0.50% in March to 3.75%–4.00% in November.

These rate hikes triggered a major bull market of the U.S. dollar, taking its value to 20-year highs. As measured by the U.S. Dollar Index, the greenback increased almost 20% between January and September.

U.S. Dollar Index — 25 Years

Other factors propping up the U.S. dollar — and inversely weighing on gold prices — include weakness in foreign currencies throughout the year, particularly the euro, British pound, Swiss franc, and Japanese yen.

In short 2022 was an incredible year for the U.S. dollar, which gold prices very much inversely followed. And looking ahead to 2023, I think we can expect gold prices to continue inversely following the dollar.

Many economists are predicting either strength or sideways action in the USD through the middle of next year as foreign central banks deal with their own inflation issues.

But after that, analysts are expecting the dollar to decline in the face of a U.S. recession.

[Jim Rickards: How to Ride “The C-Day Switchover” For Big Profits]

Wells Fargo, for one, said in its 2023 outlook:

The greenback can experience a bout of renewed strength into early 2023. With the Fed likely to deliver more hikes than markets are priced for, a hawkish Fed should support the greenback. We believe the Fed is likely to deliver more interest rate hikes than financial markets are priced for, and indeed more tightening than many other central banks… Starting in the middle of next year, we believe growth differentials between the United States and major foreign economies should start to favor international G-10 countries, and these growth dynamics should be a contributing force to a sustained dollar depreciation. We expect the United States to enter recession only during the second half of next year.

If these predictions are accurate we should expect gold prices to remain mostly flat or lower in the first quarter. But after that we should expect to see prices for the yellow metal trend higher.

I believe seasonal demand will continue to keep gold prices above $1,800 an ounce through February before a brief sell-off period in March/April. After that, however, I think we’ll see gold easily reclaim the $2,000 level and move higher from there.

How much higher will depend on the dollar. But it also depends on hype and speculation.

$2,000 an ounce is a very important psychological level for gold. The yellow metal has topped the $2,000 level a few times. But it has always failed to stay over $2,000 an ounce for more than a few days. If gold prices sat above $2,000 for a few weeks, speculation on even higher prices would be more than likely. And that speculation could easily turn into hype, taking gold prices to ridiculous levels.

I mean, just consider that Bitcoin was valued at almost $69,000 per BTC at one point. An NFT sold for $91.8 million! If the value of these alternative “assets” can soar so much, gold prices can too.

At the end of the day, we are bullish to very bullish on gold prices for the upcoming year.

Until next time,

Luke Burgess
Editor, Junior Mining Trader

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Luke Burgess at OutsideClub.com

The Copper Monthly Metals Index (MMI) rose 3.87% from November to December. As with other base metals, copper prices broke out of range to the upside last month as China began to pivot away from zero-COVID. Copper prices rallied to a peak on November 11 before a brief and modest retracement. Shortly after that, prices resumed their ascent. By December 8, copper prices had established a new higher high. 

CPI Data Sparks Optimism, Fed Slows Rate Hikes

According to the Bureau of Labor Statistics, the November Consumer Price Index (CPI) rose 7.1% year over year. This marked the lowest reading since December 2021 and the second consecutive month of decline after inflation moderated to 7.7% in October. The data beat market expectations and allowed the Federal Reserve to take its foot off the gas. Following four consecutive months of 75 basis point rate hikes, the Fed issued a 50 basis point rate hike at its mid-December meeting.

The move raised benchmark interest rates to their highest levels in 15 years. It also accompanied indications the Fed would continue to raise and sustain such rates until 2024. That said, the moderated approach came as a promising sign to markets. Between the optimistic CPI data and the Fed’s slowed pace, the U.S. dollar index (DXY) slid to its lowest point since June. 

An increasingly soft U.S. dollar has added enough support for both copper prices and base metals to see prices reverse last month. Indeed, copper broke out of three months of consolidation to see its first month-over-month increase since March. Between November and December, prices rose 10.25%.

[Exclusive: Biden To Introduce “Biden Bucks”?]

This included an additional 3.01% increase during the first two weeks of December. The continued moves to the downside for the U.S. dollar index look increasingly like a reversal. This seems particularly evident considering the index peaked at a 20-year high in late September.

Copper Prices: Turmoil in Peru Poses Supply-Side Risk

Peru declared a state of emergency emergence after deadly protests erupted following the impeachment and arrest of its former president. Leftist Pedro Castillo was quickly stripped of his office after attempting to dissolve Peru’s congress and replace it with an “exceptional emergency government.” Prior to the move, Castillo faced an early December impeachment vote over allegations of corruption. However, it appeared unlikely he would have lost despite his drastic attempt to fend it off.

Vice President Dina Boluarte quickly replaced Castillo, becoming Peru’s sixth president in five years. Her ascendance to the office resulted in intense protests throughout the country. The governments of Mexico, Argentina, Bolivia, and Columbia issued statements in support of Castillo and continued to refer to him as the “President.” In a bid to calm the political upheaval, Boularte called for moving up the next general election to April of 2024.

Short Term Expectation

In the short term, protests pose a substantial supply-side risk to copper. Should they continue, they could further boost already-bullish copper prices. Already, several roadblocks have delayed and cut off shipments to and from mines. Most recently, Freeport McMoRan’s Cerro Verde mine, located near the city of Arequipa, noted logistics setbacks for workers, supplies, and products due to protests.

Near Cusco, protesters blocked off a key mining corridor for the Las Bambas mine. Peru is the second-largest global copper producer after Chile. Prior to the latest political turmoil, mines throughout the country faced repeated disruptions from protesters angling for further financial support from mining companies.

For as long as she can remain in office, Boularte may prove a moderating force. Like her predecessor, Boluarte ran under Free Peru, known in Peru as a Marxist political party. However, in a January 2022 interview, she stated she did not embrace the party’s ideology. Indeed, her early cabinet appointments included Alex Conteras as the economy minister, who is known for a pro-market stance. So far, she has yet to announce her political agenda, especially concerning Peru’s mining industry.

However, her early decisions appear less radical than Castillo’s. Therefore, they will perhaps pose less of an upside risk to copper prices. Castillo’s administration was marked by repeated attempts to tax and regulate the mining industry, including by implementing a since-rejected new constitution.

The Unknowns of Copper Prices in 2023

Copper prices managed to break out of the directional uncertainty that plagued them throughout the fall. Still, the unknowns of 2023 could once again shift price direction. 

In the short term, China’s unraveling of zero-COVID poses a volatility risk. Indeed, much of the recent upside price action has been speculative about the return of Chinese demand. But as of yet, demand has not shown signs of meaningful recovery. Furthermore, rising infection rates continue to disrupt consumer spending and manufacturing.

The extent to which China’s economy will recover in the long term also remains a looming uncertainty. It’s estimated that China will grapple with the cost of its roughly three-year-long economically restrictive approach to the virus for years. That’s on top of ongoing declines within its property sector, aging population, and high debt levels. 

In the West, opinions remain split on the depth and length of a downturn in the U.S. while the Fed slowed the pace of its quantitative tightening efforts, it remains steadfast about the need to continue and sustain high interest rates. Invariably, this will mean a drag on the U.S. economy into the new year, which up to this point has proved resilient. 

Between the U.S. and China, 2023 copper demand remains a question mark. Most projections expect a copper surplus for the year. An oversupply would add downside pressure to prices and risk stalling the current bull market. This means copper prices could quickly invert downward should market expectations on Chinese or U.S. demand prove overly optimistic.

By Nichole Bastin

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from AG Metal Miner at Oilprice.com

• A secret and powerful benefit…
• Selling physical gold and silver bullion is more involved
• A personal example…

Investing in physical gold and silver bullion holds a secret and powerful benefit… one that both creates a hedge and builds a foundation for wealth accumulation.

But I’ll tell you now that it’s not an equal benefit. It’s something that can financially help some people much more than others.

In fact, some investors are going to call this “benefit” a disadvantage. And, for them, they wouldn’t be wrong.

But owning physical gold and silver bullion can provide an unwitting advantage to tens of millions of folks across the country.

I won’t beat around the bush…

The secret benefit to investing in physical gold and silver bullion for these tens of millions of people is illiquidity

That’s not a mistake.

You read that correctly.

Illiquidity (its difficulty to sell) is the secret benefit to physical gold and silver bullion.

Now, before I explain, I should tell you I’m only talking about physical gold and silver bullion — coins and bars you can hold in your hand. I’m not talking about gold and silver stocks, ETFs, or any other digitally traded asset. Those are typically very liquid assets. I’m talking about owning the physical metal.

Investment assets aren’t really “liquid” or “illiquid.” The liquidity of investments is really a spectrum. Some investments can be liquidated in seconds, while others take months. Physical precious metal bullion falls somewhere in the middle of that spectrum.

Stocks are way more liquid than physical gold bullion. You can sell your stocks in seconds without even standing up. In fact, if you have sell orders set, your stocks will just sell automatically. You could sell your stocks while watching paint dry.

But selling physical gold and silver bullion is more involved.

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There are multiple ways to sell bullion. You can sell bullion to a coin shop or bullion dealer with a brick-and-mortar storefront… when they’re open. You can sell it to a private individual… as long as they’re trustworthy. You could also do what’s probably the most common thing and sell bullion to a reputable online dealer like APMEX, Provident Metals, JM Bullion, and others.

Nevertheless, the least amount of effort in selling gold and silver bullion involves arranging a sale and then mailing the physical metal to the buyer. It’s everything you’d expect when selling a physical object.

Physical gold and silver bullion is much less liquid than stocks. On the other hand, physical gold and silver bullion is way more liquid than some assets, like real estate. According to Zillow, “Sellers spend approximately six months preparing their homes for sale [and] another 25 days with their house on the market.”

The point is gold sits somewhere in the middle of the asset liquidity spectrum, and that can be actually very beneficial for tens of millions of people — particularly those with poor saving habits.

I'll give you a personal example.

Like many people, I had very poor saving habits when I was 18 years old. I had two jobs, but I would just spend every dollar I earned buying crappy Mexican brick weed and trying (and failing) to impress girls.

When I was in my 20s, however, that changed. And it changed because I started buying physical gold and silver bullion.

Selling physical gold and silver bullion is not the worst thing in the world, but it can be inconvenient. Again, selling a stock takes a matter of seconds with a few button pushes. Unless you live right next door to a bullion dealer, selling physical gold and silver and getting paid can take anywhere from a few hours to a week.

Selling bullion is a kind of a hassle but not a huge one. It's just enough hassle for people with poor spending habits to dissuade them from selling their physical bullion to buy something frivolously. Owning physical gold and silver bullion sort of forces people to save.

At the same time, physical gold and silver bullion is liquid enough that if people absolutely need money, they can sell it in a reasonable amount of time.

When I was 21, I wouldn’t sell my gold to buy a guitar I wanted, but I would sell it if I needed to pay my rent. Owning gold back then forced me to be more financially responsible.

As I mentioned, physical gold and silver bullion being somewhere in the middle of the liquidity spectrum won’t be a benefit for every investor. However, for those with poor spending habits, owning bullion sort of forces them to save while providing a short-term safety net.

Now, I really don’t expect most Outsider Club readers to have poor spending habits, but I guarantee you know someone in your life who does. So as you’re thinking about what to get people as gifts for this holiday season, consider physical gold and silver bullion.

I will tell you physical bullion is not a gift everyone is going to appreciate immediately… especially a kid or younger adult. Odds are good you had an uncle or grandfather give you an American Silver Eagle for a birthday or Christmas. As a kid, that’s kind of a crappy gift. So I’d recommend using bullion as a secondary gift. But later down the line, if they ever need it, that bullion will be there.

Until next time,

Luke Burgess

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Luke Burgess at OutsiderClub.com

• Global X Silver Miners ETF (NYSE: SIL)
• Wheaton Precious Metals (NYSE: WPM)
• Pan American Silver (NASDAQ: PAAS)

As a writer, you don’t always get to write exactly what you want.

Of course you can’t write everything on your mind, just like you can’t say everything on your mind out loud, but writers are often compelled in some way (either with the carrot or the stick) to write something they wouldn’t have come up with by themselves.

That was the case in 1950 when American composers Jay Livingston and Ray Evans were compelled by Paramount Pictures to write a Christmas song for the studio’s latest comedy film The Lemon Drop Kid.

By the way, your guess as to what this movie is about is as good as mine. According to the plot summary, it's about a small-time conman who ends up owing $10,000 to a gangster and has to come up with the money before Christmas, which leads to him doubling down on the scams. But I don't know — that poster doesn't convey that plot to me.

Anyway, according to the 2006 book America's Songs: The Stories Behind the Songs of Broadway, Hollywood, and Tin Pan Alley by Philip Furia and Michael Lasser, the songwriters did not want to compose a Christmas song, saying, “It’s impossible to write a Christmas song. Every year everybody sings the same old Christmas songs, and new ones never make it.”

But Paramount pushed, and the composers eventually found inspiration in a small silver bell that Ray Evans kept on his desk.

The song Livingston and Evans would end up writing was, of course, “Silver Bells,” most famously performed by Bing Crosby and Carol Richards.

It’s hard to say exactly when “Silver Bells” became a Christmas classic, but it’s absolutely a song you can’t avoid in December.

And I’m sure both Jay Livingston and Ray Evans (who both lived into the 2000s) were very glad to be wrong about it being impossible to write a Christmas song.

In a bit of a humorous twist, Livingston and Evans originally titled the song “Tinkle Bells,” referring to the sound tiny bells make. But when Livingston told his wife about the song, she reminded him of the double meaning, and the two promptly changed the title to “Silver Bells.” Good move, I’d say. “Piss Bells” may not have been the Christmas classic Paramount was hoping for.

Either way, like I mentioned, “Silver Bells” is a song you can’t avoid in December. I’ve already heard it a few times and it made me think of silver stocks.

In the past several months, we’ve talked a lot about gold and gold stocks, but it has been quite a while since we looked at silver stocks. And with gold finally on the upswing after months of being under pressure from a rising dollar, I thought it was a good time to tell you about three of my favorite silver stocks.

Three Silver Stocks for Christmas

The first I want to point out is really a basket of silver stocks.

Global X Silver Miners ETF (NYSE: SIL) — One Year

SIL’s performance generally corresponds to the Solactive Global Silver Miners Total Return Index, which tracks a number of major silver-producing and royalty companies. The ETF’s most prominent position, holding 23.52% of its net asset, is Wheaton Precious Metals (NYSE: WPM), which we’ll talk about next. Other important holdings include Korea Zinc Company Ltd. (9.40% net asset) and Pan American Silver (8.53% net asset), which we’ll also talk about.

Of course, as with any ETF, expenses and fees are going to affect your overall earnings. SIL has an expense ratio of 0.65%, which isn’t bad among ETFs, but it’s something to consider. Nevertheless, if you were looking for a safe, easy way to get short-term leverage on rising silver prices, SIL is a great option.

[Exclusive: Biden To Introduce “Biden Bucks”?]

If you want to avoid those expenses and fees and still be on the safe side, I think Wheaton Precious Metals by itself is a great play.

Wheaton Precious Metals (NYSE: WPM) — One Year

Wheaton isn’t a traditional mining company but rather a precious metals (mostly silver) streaming company. Wheaton makes deals to buy silver and other metals from mining companies for an upfront payment.

It basically helps finance mining operations in exchange for a good price on silver and other precious minerals. Doing this provides the company leverage on high-quality assets with predictable costs.

Right now, Wheaton has streaming agreements with companies operating 21 mines. The company says 90% of the operating mines are high-margin operations working in the lowest half of their cost curve.

Meanwhile, Wheaton has deals with companies actively developing 13 large-scale mineral projects, so the company and its investors have exposure to both a low-risk revenue stream and the upside of exploration and expansion.

Wheaton even pays a little dividend. Right now, WPM pays $0.15 per share per quarter. At the current share price, that’s an annual 1.54% dividend. Again, that’s not much, but it’s infinitely larger than the annual 0.65% expense SIL would cost you.

I like WPM as a longer-term play for any investor.

The last stock I want to direct your attention to is Pan American Silver (NASDAQ: PAAS).

[Alert: Biden issues Executive Order #14067]

Pan American Silver (NASDAQ: PAAS) — One Year

Pan American is a traditional precious metal mining company with a 28-year history of operating in Latin America. Today, the company mines more than 19 million ounces of silver per year (as well as other precious minerals) from operations in Mexico, Peru, Argentina, Bolivia, and Canada. Pan American’s most recent financial statement shows a significant decline in revenue, earnings, production, and pretty much everything else across the board.

Pan American Silver Q3 2022 Financial Summary

That has left PAAS with one of the lowest P/E ratios among the silver miners.

Right now, PAAS has a P/E ratio of 19.36. Compare that with some of Pan American’s competitors:

With declining quarterly revenue, earnings, production, etc., PAAS is more of a risk than either SIL or WPM. However, the big upside to Pan American Silver is its name — and believe me, the company’s name brand is very important.

Pan American Silver is a very well-known name among silver miners. It’s one of the first companies people think about when they think of silver mining. That means it’s also one of the first companies investors are going to think of when they see silver prices rising. And with a relatively low P/E, PAAS is a silver miner they’re going to want to own.

That's all I've got for you this week.

Sorry if you never hear “Silver Bells” the same way again.

Until next time,

Luke Burgess

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Luke Burgess at OutsiderClub.com

• Kinross Gold (NYSE: KGC)
• Yamana Gold (NYSE: AUY)
• Hecla Mining Company (NYSE: HL)

Precious metal prices are rising amid seasonal demand and a devaluation of the U.S. dollar.

In the past three weeks alone, gold prices have increased by as much as $150 an ounce.

Meanwhile, the price of COMEX silver jumped almost 15%.

We talked about the reasons for the dollar’s reversal and the factors driving seasonal gold demand last week.

Today I want to show you three gold and silver stocks trading under $5 that are best positioned to leverage rising metal prices.

The first is a well-known Canadian gold producer with a long-standing proven track record for delivering shareholder gains.

Kinross Gold (NYSE: KGC)

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Kinross produces about 2 million ounces of gold per year from six mines on three continents. The company’s biggest assets include the Paracatu mine in Brazil and Tasiast mine in northwestern Mauritania.

Paracatu is the largest gold mine in Brazil, producing more than 550,000 ounces of gold per year. Meanwhile, Kinross is rapidly developing its Tasiast mine into another world-class project by increasing throughput year after year.

The company also operates the Fort Knox mine near Fairbanks, Alaska (which produces more than 250,000 ounces of gold per annum) and is actively developing large gold projects in North and South America.

Kinross has a strong balance sheet, with sales, earnings, total assets, and production all increasing in the most recent quarter.

Kinross Gold 3Q 2022 Financial Summary

Even though shares of KGC are trading at just about $4 right now, the company has a market cap of $5.2 billion, making it the largest precious metal company we’ll talk about today. However, strong financials and great name recognition make KGC a fairly safe bet to leverage rising gold prices.

It should also be noted that KGC pays a little dividend at just over 2.9% right now. The next ex-dividend date is December 1. Investors who own shares before that date will receive $0.03 per share on December 15. That’s not going to buy you a Ferrari. But it’s something extra for the holidays.

Up next is another well-known Canadian gold miner: Yamana Gold.

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Yamana Gold (NYSE: AUY)

Yamana Gold is actually quite similar to Kinross in a lot of ways. The company operates five precious metal mines and has a significant pipeline of development projects in North and South America.

The company produces about a million gold-equivalent ounces per year; about 88% of that is gold, the rest is silver. One of Yamana’s most important assets is the Malartic mine in Quebec.

The company owns a 50% stake in the Malartic mine (along with Agnico Eagle Mines), which is Canada’s largest gold mine, producing more than 300,000 ounces of gold per year. The Malartic mine is currently transitioning from a large open-pit operation to an underground mine. Yamana says the move could nearly double gold production, adding as much as 600,000 ounces, when completed.

Unlike Kinross, however, Yamana’s financials could be better. Revenue, earnings, cash flow, and production all decreased in the third quarter of 2022 compared with 3Q 2021.

Yamana Gold 3Q 2022 Financial Summary

Yamana just barely makes this list for gold stocks under $5. As I’m writing this, shares are closed at $4.98. That gives the company about a $4.8 billion market cap. Comparing Kinross’ P/E ratio (16.72) to Yamana’s (18.44), Kinross looks a little cheaper right now. However, both companies have very good name recognition and should do well as commodity prices continue to rise.

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Moving on to a company that focuses on silver, there’s Hecla:

Hecla Mining Company (NYSE: HL)

Hecla is another stock that barely makes the list of gold stocks under $5. But the company is the largest primary silver producer in the United States, with output exceeding 13 million ounces per year — that’s about 35% of America’s total silver production, according to data from the USGS,

The company’s primary asset is the Greens Creek mine in southeast Alaska. Greens Creek is one of the largest and lowest-cost primary silver mines in the world. It produced 9.2 million ounces of silver in 2021.

The company is also a significant lead and zinc producer. According to Hecla, it is the third-largest producer of both lead and zinc. Last year the company produced 34,100 tons of lead and 63,100 tons of zinc.

Hecla owns and operates four major mines in the U.S. and Canada and is developing exploration projects throughout North America.

Unfortunately, the company’s financials have seen negative growth over the past several quarters, especially in the most recent quarter.

Hecla Mining 3Q 2022 Financial Summary

Despite less-than-desirable financials, Hecla remains in a great position to leverage rising silver prices as the most important domestic supplier of the white metal in America.

Seasonal demand for precious metals, combined with a reversal in the value of the U.S. dollar, put gold and silver miners like these in a very good position for short-term gains.

Nevertheless, the upside potential for gains from these larger gold companies is limited. The biggest gains come from the smaller, more unknown gold stocks.

They’re generally known as “junior gold companies.” Most of the time these companies aren’t mining any gold yet. Instead, they use drilling and other exploration techniques used to hunt down the yellow metal. 

Now, as you can imagine, not every gold exploration effort will be successful. In fact, most of them won’t be. If they were, gold wouldn’t be nearly as valuable.

However, if you know what to look for in a junior gold company’s exploration results, you can greatly increase your odds of picking a winning gold exploration stock.

I’ve spent almost 20 years of my life looking at exploration results from gold and precious metal projects. And in all that time, I’ve only seen a handful of drill results that make me think, Holy cow, these guys found something huge.

The last time that happened was at the end of 2020. A gold exploration company called New Found Gold reported stellar drill results that no one was paying attention to at the time. I urged my readers to buy the stock at $4 a share. By May 2021, shares had ballooned to nearly $13 and New Found Gold was the most well-known gold exploration company on the planet.

Until next time,

Luke Burgess

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Luke Burgess at OutsiderClub.com

With circumstances continuing to devolve into madness following the onset of the pandemic-fueled new normal, queries regarding gold price predictions for 2023 naturally picked up. Historically, precious metals offer a hedge against currency erosion since they feature intrinsic value. That’s part of the reason why I personally own some physical gold. As well, the metals cynically benefit from the fear trade or broader concerns about economic and perhaps societal instability.

Still, the issue about gold price predictions center on the Federal Reserve and its monetary policy. Unfortunately, the Fed fights against macroeconomic dynamics such as rising energy costs, geopolitical flashpoints and a stout labor market, among other factors. Certainly, the Fed succeeded in introducing countervailing deflationary forces, as judged by the rise in purchasing power in July. However, inflationary forces again dominated in September.

Therefore, no easy answer exists regarding gold price predictions for 2023. All eyes are on the Fed, true, but it can only do so much. The macros will almost certainly influence the central bank’s decision on how to proceed. Under this context, I’m going to provide two sets of price predictions depending on which force (inflationary or deflationary) wins out.

Newmont (NEM)

A stalwart in the metals mining business, Newmont (NYSE:NEM) is the world’s leading gold company and a producer of copper, silver, zinc and lead, per its website. Currently, the company carries a market cap of $32.99 billion. It also offers a forward yield of 5.32% and commands two years of consecutive dividend increases.

According to Gurufocus.com, Newmont may represent a value trap. Simply, the company cratered after a tough second-quarter earnings report. Presently, shares slipped 32% on a year-to-date basis.

In terms of gold price predictions, if the Fed succeeds in raising the benchmark interest rate to control inflation, NEM may start 2023 well into the $30 range. Technically, a baseline of support exists at around $38, which is the level shares might “de-risk” at.

However, if the macroeconomic forces push inflation higher, NEM could easily retake the $60 level and beyond. Fundamentally, Newmont still carries a decent-quality business, with a return on equity of 3.6% that ranks higher than 78.5% of the competition.

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Barrick Gold (GOLD)

Another top name in the gold space, Barrick Gold (NYSE:GOLD) produces the underlying metal and copper with 16 operating sites in 13 countries. Presently, Barrick carries a market cap of $25.9 billion. It also carries a dividend yield of 5.48% at the moment.

As of the moment, Gurufocus.com labels GOLD modestly undervalued. Although Barrick presented some encouraging figures such as increases in gold output, the vagaries of this year hurt shares. Since the beginning of this year, GOLD finds itself 21% below parity.

For gold price predictions, a deflationary dynamic will continue to weigh heavily on the sector. Technically speaking, a support baseline exists around $12 to $13. That’s probably where shares will head if the Fed aggressively raises the benchmark interest rate.

On the other hand, if inflation wins the day, could make a charge back toward the $30 level. Keep in mind that Barrick features a high-quality business. Its return on equity stands at 8.44%, ranked higher than 83% of the competition.

BHP Group (BHP)

For those seeking exposure to gold but not too much exposure, BHP Group (NYSE:BHP) offers a compelling idea. Primarily, the company specializes in copper, iron ore, metallurgical coal, nickel and potash. All of these feature significant applications in industry or agriculture. However, BHP also enjoys exposure to the gold and silver market via its Olympic Dam project.

Financially, BHP rates as a modestly undervalued business. While mining always presents certain risks, because of BHP’s broad portfolio, the company is less exposed to any one commodity. For instance, the security lost only 7.5% so far this year. That’s a win under the present bearish conditions.

For gold price predictions, BHP largely enjoys a neutral position. Again, a wide canvas allows investors to sleep easier at night. To be sure, inflationary forces should help BHP make a charge back up to $70.

On the other hand, deflationary forces may see BHP meander but not lose too much. I say this because the company produces commodities featuring inelastic or critical demand profiles.

Sibanye Stillwater (SBSW)

While risky, investors ought to give some consideration to diversified precious metals miner Sibanye Stillwater (NYSE:SBSW). Per its website, “Sibanye-Stillwater has established itself as one of the world’s largest primary producers of platinum, palladium, and rhodium and is also a top tier gold producer.”

Currently, Sibanye has a market cap of $6.63 billion. Shares slipped over 25% since the beginning of this year, which doesn’t initially offer much encouragement. However, its palladium production should offer a mitigatory effect. Scream all you want about electric vehicles being the future. They are still expensive for many if not most households. Therefore, palladium’s use in catalytic converters should offer much relevance for SBSW.

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Of course, the topic of the day is gold price predictions. If circumstances become decisively inflationary, I expect SBSW to eventually return to the $20 threshold. Along with gold, other critical metals like palladium and platinum should rise.

However, even if circumstances become deflationary, SBSW might just meander sideways. First, Sibanye offers critical metals necessary for industrial applications. Second, the company commands stout profitability metrics, reflecting a high-quality enterprise.

Wheaton Precious Metals (WPM)

One of the more reliable market ideas in the gold sector, Wheaton Precious Metals (NYSE:WPM) deploys a streaming business model. Per Motley Fool, streaming refers to “a financial transaction in which a company provides cash up front to a mining company for the right to buy gold at reduced prices in the future.”

Theoretically, streaming companies (all other things being equal) provide greater price predictability than direct mining firms. After all, parties to streaming contracts understand what the terms are prior to entering the agreement. Unfortunately, for WPM this year, this thesis did not pan out so well. Since the beginning of this year, WPM lost 25% of equity value, a not untypical loss.

That said, if gold prices rise due to stronger-than-expected inflationary forces, Wheaton will likely target $50 and above. Undergirding such a framework are robust financials. Anchored by a very stable balance sheet, Wheaton next enjoys strong growth and profitability metrics.

On the other hand, if gold price predictions end up materializing in the southbound direction, WPM may end up dropping to around $26 to $27. That’s where strong technical support lies.

Royal Gold (RGLD)

Billed as one of the world’s leading precious metals stream and royalty companies, Royal Gold (NASDAQ:RGLD) engages in the in the acquisition and management of precious metal streams, royalties and similar production-based interests.

Per the company’s explanation, a royalty is “a non-operating interest in a mining project that provides the right to a percentage of revenue or metal produced from the project after deducting specified costs, if any.” As with streaming companies, royalty-based enterprises facilitate price predictability. In RGLD’s case, the thesis worked out well. Since the beginning of this year, RGLD slipped 11.5%. It’s not great but comparatively, it’s winning.

As for gold price predictions, inflationary tailwinds should bolster RGLD. Incorporating a mix of streaming and royalty business models, RGLD provides concerned investors with convenient exposure to precious metals. Believe me, lugging around bullion is no fun. Look for shares to swing above the psychologically important $140 level.

However, under negative gold price predictions, RGLD risks falling into the $80 range. The hope, though, is that its high-quality business should spare it extreme volatility.

Jaguar Mining (JAGGF)

One of the riskiest ideas within the precious metals sector, Jaguar Mining (OTCMKTS:JAGGF) nevertheless deserves consideration for speculators. A Canadian-listed junior gold mining, development, and exploration company, Jaguar conducts operations in Brazil. Immediately, its share price of a few cents above $2 will discourage many investors. However, let’s look at some facts.

On a YTD basis, JAGGF hemorrhaged 39.4% of equity value. However, let’s recall Newmont, which didn’t pare losses significantly, down a little over 32%. Use Google Finance’s tool to stack the two charts together. Sure, NEM managed to swing higher into the second half of April. But eventually, both NEM and JAGGF succumbed to broader market forces. So, eschewing the junior miners in favor of the blue chips doesn’t always work out successfully.

Regarding gold price predictions, if inflation wins the day, I expect JAGGF shares to fly higher. At minimum, look for shares to double by late 2023 to early 2024 under inflationary conditions. Unlike garbage gold stocks, Jaguar enjoys surprisingly solid financials, including a 14.2% return on equity that ranks higher than 88% of the competition.

Should gold prices succumb to deflationary pressures, though, I believe JAGGF risks a trip to $1, if not worse. So, all I can say is, play ball!

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Read more from Josh Enomoto at InvestorPlace.com

• Barrick Gold (GOLD)
• Revisions to Earnings Estimates
• 12 Month EPS
• Projected Revenue Growth
• Last Reported Results and Surprise History
• Valuation
• Bottom Line

Barrick Gold (GOLD) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this gold and copper mining company have returned -2.8%, compared to the Zacks S&P 500 composite's -8.4% change. During this period, the Zacks Mining – Gold industry, which Barrick Gold falls in, has gained 1.6%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock ‘trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Barrick Gold is expected to post earnings of $0.23 per share for the current quarter, representing a year-over-year change of -4.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -9.6%.

For the current fiscal year, the consensus earnings estimate of $1.01 points to a change of -12.9% from the prior year. Over the last 30 days, this estimate has changed -3.1%.

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For the next fiscal year, the consensus earnings estimate of $1.10 indicates a change of +9.2% from what Barrick Gold is expected to report a year ago. Over the past month, the estimate has changed -0.9%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Barrick Gold is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue Growth

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Barrick Gold, the consensus sales estimate for the current quarter of $3.09 billion indicates a year-over-year change of +9.3%. For the current and next fiscal years, $11.71 billion and $12.08 billion estimates indicate -2.3% and +3.2% changes, respectively.

Last Reported Results and Surprise History

Barrick Gold reported revenues of $2.86 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $0.24 for the same period compares with $0.29 a year ago.

Compared to the Zacks Consensus Estimate of $3.07 billion, the reported revenues represent a surprise of -6.81%. The EPS surprise was +4.35%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates just once over this period.

Valuation

No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Barrick Gold is graded B on this front, indicating that it is trading at a discount to its peers.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Barrick Gold. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Zacks Equity Research at Zacks.com

• Silver is poised to bounce
• Commitment of Traders
• Bullish signals for silver prices

Silver has been crashing…

The metal is down 31% from its March high. And it recently hit its lowest price since 2020.

The washout has investors scared. They want nothing to do with the metal. Even worse, bets against silver are at the highest level since 2019. And we've only seen sentiment this negative a handful of times in the past few decades.

History shows us that silver is poised to bounce. And we could see strong outperformance over the next year.

Let me explain…

Sentiment is like a rubber band. It can often stretch much farther than you'd expect.

Investors give up on assets all the time. That indifference can turn to disdain. And eventually, it'll grow into outright hatred.

But in the end, a stretched rubber band always snaps back. Pessimism can only go so far. It'll eventually hit an extreme.

So just when you think sentiment can't get worse, guess what? Things start getting better…

That's the point when prices have a chance to bounce back. And silver is gearing up to do exactly that today.

We can see this setup in the Commitment of Traders (“COT”) report. This is a weekly report that tells us what futures traders are doing with their money. Right now, folks are more bearish on silver than we've seen in years. Take a look…

Speculators have seen silver prices crash… So they're jumping on the bandwagon.

They're betting against the metal at one of the highest rates on record. And we've only seen more negative readings a couple of times before – in 2018 and 2019.

To see what could happen next, I looked at similar levels of pessimism… specifically, every time the COT fell below and then rose back above negative 12,000.

That has happened six other times since 1995. And those cases were bullish signals for silver prices. Check it out…

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Silver hasn't been a big winner over the long term. Its typical annual gain is just 4.7%. However, buying when sentiment is negative can juice your returns…

Buying at similar setups led to 6.5% gains in three months and 10.3% gains in six months. And it returned an impressive 12.5% over the following year… more than double the metal's typical buy-and-hold return.

That kind of gain would only partially offset silver's loss for the year. Plus, sentiment could slide even more before a move higher. But the rubber band can only stretch so far. And based on history, we're likely darn close to a big snapback.

Good investing,

Brett Eversole

[Jim Rickards Asset Emancipation: Profit from the 3 Companies Building “Biden Bucks”]

Read more from Brett Eversole at DailyWealth.com