For the past two weeks or so, I’ve been writing to you urging you to buy gold and other precious metals.
And I hope you’ve taken my advice because we’re about to get PAID.
The dollar got crushed on Friday after the Labor Department reported nonfarm payrolls only climbed 38,000 in May — far less than the 160,000 forecast by economists. It was the worst jobs report since September 2010. And gold skyrocketed.
Combined with mounting concerns over Brexit, Friday’s gloomy jobs data has eased gold investors’ concerns over a June rate hike. According to CME FedWatch, the chance of a rate hike in June is now down to only 4%.
From here, the price of gold only goes higher.
As we approach the FOMC meeting on June 14–15, Main Street investors will be going long on gold and will already be thinking of the Fed’s July meeting. And we can expect a run-up in gold prices past the Fed’s rate announcement as a result.
It’s at that point, however, that we should take some profits from our bigger short-term gains. I’m going to go out on a limb and actually give you an exact date to take these profits: Friday, June 17th.
And that’s simply because the price of gold saw significant gains ending the week of the last three FOMC meetings with no rate hike.
| January 25–29 | March 14–18 | April 25–29 |
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Last weekend, I wrote to you with recommendations on 10 gold and precious metal stocks. Here’s a short list of the companies I talked about:
| Company | Ticker | Market Cap | Recommended Price | Comment |
| Barrick Gold | NYSE: ABX | $19.16B | $16.59 | Largest, most well-known gold major |
| Goldcorp | NYSE: GG | $13.92B | $16.63 | Senior, low-cost producer |
| Royal Gold | NASDAQ: RGLD | $3.58B | $55.05 | Most well-known gold royalty company |
| Sandstorm Gold | NYSE: SAND | $513.04M | $3.50 | Up-and-coming gold royalty firm |
| Silver Wheaton | NYSE: SLW | $8.01B | $18.16 | Largest gold and silver royalty/streaming firm |
| Tahoe Resources | NYSE: TAHO | $3.63B | $11.79 | Major silver producer |
| Stillwater Mining | NYSE: SWC | $1.19B | $9.76 | Only U.S. platinum/palladium producer |
| McEwen Mining | NYSE: MUX | $636.67M | $2.25 | Smaller producer with savvy management |
| New Gold | NYSE: NGD | $1.90B | $3.75 | Mid-tier gold miner with royalties |
| Sandspring Resources | TSX-V: SSP | $46.54M | $0.44 | Junior explorer and developer with 4.1 Moz gold reserve |
I expect all of these stocks to do very well over the next two weeks. But we should always take significant gains. I will, of course, update you on these positions here in Energy and Capital following the FOMC meeting.
Is there still time to get in?
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Well, I really hope you’ve already put precious metals and related stocks into your portfolio prior to today’s letter. But I still think there’s a bit of time to make a small gain.
At this point, I’d recommend only buying gold and precious metal mining or royalty stocks over the physical metal or ETFs.
The premium for physical bullion is still a just a bit higher than usual, especially for platinum and palladium. And I don’t think trading a precious metal ETF will be worth it with Friday’s surge in prices. So right now, I would be strictly a buyer of mining or royalty companies.
Have a good weekend,
Luke Burgess
Energy and Capital
