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In a special interview with Chen Lin recorded on Monday, March 23, 2020, we talked about the Coronavirus, how it is triggering a dramatic downturn not only in the S&P and Dow but in gold and gold shares and how this is setting the stage for the most spectacular bull market in gold and gold shares that I will likely see in my lifetime.
While the COVID-19-virus-driven equity market crash is different and likely much more serious than the 2008 financial crisis, indiscriminate panic selling of gold and gold shares simply to meet debt obligations is the same dynamic that took gold and gold shares down initially in that financial crisis. However gold and gold shares bottomed and began rising many months earlier than the general equity market. I believe the same will take place with this market decline and that earnings for gold miners this quarter and Q2 will be very strong especially compared to massive losses likely in many if not most of the other sectors trading in the U.S. Actually while Chen and I were recording our interview, gold had very rapidly risen more than $50 since the markets opened in New York on March 23. This interview is now posted at my website at https://jaytaylormedia.com/media/ChenLin20200323.mp3
There are certainly solid fundamental reasons to anticipate rising gold share prices not just because that happened in 2008 but because the earnings outlook for gold shares is indeed very bright. Mid March Scarsdale Capital published their latest average earnings projections by the analysts who cover the companies in the chart below. As you can see, final earnings for 2019 are projected to rise dramatically above those of 2018. And earnings for this year are projected to rise even further for household name gold producers.
It's always true that the darkest time of the day is right before dawn. It seems the same is true for the equity markets and it's interesting to note that the yellow metal seems to be a metaphor for the sun peeping its head above the horizon to say "hello to a new gold bull market." History suggests gold is the first market to turn higher as central banks crank up the printing presses. If this is like 2008, the main markets will turn higher several months after gold starts its run.
It's very possible we are on the cusp of the next major gold and gold share bull market. Seems the markets are perceiving future damage to the U.S. dollar as the Federal Reserve is pledging to pump untold trillions of dollars into the economy in an attempt to buy some more time before we encounter a monetary reset. This is the very same dynamic that drove gold beyond $1,900 in the last bull market but this time it's a magnitude greater! Given the massive amount of money to be created this round, odds favor a gold price much, much higher than the 2011 high. One day does not establish a trend, but as the market was a couple minutes from its close on March 23, gold was holding its gains above $50 and nearing $60. This is a substantial move and the reason I'm taking it seriously is because it follows immediately the promise of the Fed to print as many trillions of dollars as it takes to keep America's markets from plunging over the abyss.
If that is not promising enough to encourage you to subscribe to J Taylor's Gold, Energy & Tech Stocks, we are also offering a 50% discount on our annual subscription. We hope you take advantage of this Limited-Time Offer.
Best wishes for health and happiness in these troubling times. Stay safe and healthy! |
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