Something is in the air. A big shift. Something has changed dramatically in the last six months. Last summer we warned that the collapse would begin in the fall of 2015. Less than two months later, stock markets around the world crashed. They then had a rebound in October; we said they would not recover to the highs of the summer and would crash again. We also said that 2016 was going to be a bloodbath. That happened and markets around the world were heavily in the red in January.
We also noted that bitcoin was a buy under $250 in the summer and it since has hit a high of $500.
The one area, however, that we also recommended buying was gold and gold stocks. However, while gold rose in most currencies over the last six months it remained mired below $1,100 in U.S. dollar terms and the gold stocks were weak.
That all seems to have changed at the start of this year. Gold began the year at $1,060 USD and currently is at $1,173.
What's even more noticeable, and part of the shift I mentioned, is that gold has gone up when major stock markets were down... and it also went up when major stock markets went up (which was rare in the last month but on the few days they did, gold bucked the trend).
More interesting have been the gold stocks. While they rose to start the year they tapered off until January 19th. The major gold miners have risen 31% since then, and the junior gold miners have risen 23%.
TDV's Senior Analyst Ed Bugos, sent out an alert on the day of the exact bottom telling those who were holding the leveraged gold stock ETF, NUGT, not to sell. He told those who had been holding it and were down 20% in the prior weeks to continue to hold. And when asked by those who didn't hold it if they should be buying here, his answer was "Yes, yes and yes." It was a bold call, as many were worried the gold stocks were going to fall much further.
Two-and-a-half weeks later that trade doubled.
Both Ed and I expect this is going to be a banner year for gold and gold stocks...and it hasn't even begun yet.
But it won't be easy. We expect many more calls that will grind us to our very core to make, in what we expect to be an incredibly volatile year.