To be a gold investor one must possess the virtue of patience. You would think with the amount of debt and money printing that has happened since the beginning of the pandemic we would have seen gold go a lot higher. Gold after all is supposed to do well in an inflationary environment. And aren’t we seeing higher inflation now as the price of everything is going up. “Don’t worry, it’s just transitory”, the Fed keeps telling us.
Gold did have an impressive 20% run during the beginning of the pandemic, peaking at just over US$2000 an ounce before drifting back down the mid 1700’s, which is roughly where it sits today.
It’s been quite boring being a gold bug of late – there will be days when gold prices move up 2% and there is excitement in the market that gold has finally broken out, but these gains are lost a few days later. This can really eat away at any optimism, especially when gold equities keep selling off and seem to go lower and lower. However, things aren’t as bad as you think for gold if you sift through the market noise.
Back in 2005, I left my native Ohio. I’d had enough of the cold. My destination? Northern California.
I’ll never forget that first winter there. I froze my ass off. (Ironic, right?) See, I’d rented an old trailer out in rural Sonoma County.
It was a bargain… until around November.
That’s when a cold front revealed my home was insulated about as well as an 1800s log cabin.
In fact, it cost me about $300 a month to keep it a toasty 58 degrees that winter.
My heat source?
It turns out that natural gas prices were pretty high at the time.
Well guess what?
After a 14-year bear market, the uranium meltdown is showing signs it could be over. Uranium prices peaked at US$140 per pound in 2007 before sliding down as low as US$16 per pound in 2016. Since these lows the price has been trending arduously higher, between $20-30 per pound, but with no real catalysts to increase investor sentiment and spur a significant breakout.
Forget for a moment that copper has run over 200% since COVID hit.
And forget that most copper producers have already seen a big stock spike.
After all, many sectors have surged since the March 2020 lows. Heck, even the S&P500 is closing in on a double.
And don’t get too hung up on the recent news that China dumped a bunch of its copper stockpile onto the market. They are trying a strategy best used to tame hot speculative commodites, which misses the point entirely.
Oil stocks to date have had a remarkable run since WTI oil futures were trading as low as -$40.32 per contract for a barrel of oil – a truly bizarre and unprecedented moment in global financial markets. The precipitous drop into negative territory occurred as the pandemic was unfolding, when countries went into lockdown and people were confined to their homes. Demand for crude evaporated in the market and supply became bloated as participants in the oil market sought whatever means to offload inventories of crude.
If you follow metals and mining on Twitter, you may have stumbled upon the hashtag #tinbaron, and asked yourself what is the big deal about a metal from antiquity?
His name was Phil Baker.
For 18 years, he worked as an engineer for Norfolk Southern Railroad in Georgia.
The pay was good…but there was a catch.
Black smoke from the train constantly flooded the crew cabins of the diesel trains he ran.
He ended up dying of a rare head and neck cancer.
A jury ruled all that exhaust caused it.
Anthony Nigro was also exposed to diesel exhaust every day he worked.
It came from buses he maintained for 28 years at the New York City Transit Authority.
A Workman’s Compensation judge ruled that exposure was a major cause of his lung cancer.
It took his life mere months after his retirement.
There was also a mechanic for the Illinois Central Railroad who died of throat cancer…
A machinist who died of multiple myeloma…
And a railroad trackman who lost his life to gastric cancer…
I spent the entire year of 1993 backpacking through India.
Talk about culture shock – my senses were constantly under assault.
Beautiful women in vibrant saris…Pungent aromas of spice and incense…Bollywood music blaring from rooftops…
But what really stood out was the abject poverty.
For a week or so I stayed at a friend’s high-rise apartment in Bombay (which is now called Mumbai).
The morning after arriving, I awoke to discover that an encampment of about 50 families had sprouted up overnight across the street.
This, my host told me, happened all over the country every single day.
As you might imagine, I also encountered countless beggars during my time in India.
Of course, not everyone in India is poor.
In fact, the country now boasts 119 billionaires – that’s 110 more than there were in 2000.
And according to Oxfam, the country produces 70 new millionaires every day.
So it’s no surprise that the disparity between rich and poor in India is astounding (the top 10% of the country’s population accounts for 77% of its total wealth).
Copper is one of the most widely used industrial metals in the world because of its high ductility, malleability, thermal and electrical conductivity and resistance to corrosion.
And, if you’ve read The Diary before, you know we are very bullish on copper. Not only is it critical to the EV revolution, it’s also critical to other green energy infrastructure such as wind turbines and solar panels. Copper is also needed to build many of the infrastructure that is necessary to support a healthy economy, such as homes, power grids, plumbing systems, and broadband networks.
The reason we’re so bullish on copper is because, coupled with rising global demand, copper is in considerably short supply – especially in the wake of the pandemic, which saw many mining operations shut down and investment into new projects dry up.
Back in 2011, I was convinced that gold was headed to $5,000 an ounce.
An easy $100.
So I bought eight 1-ounce American Gold Eagle coins and 160 American Silver Eagle coins.
All told I spent close to $20,000.
I was working in marketing for legendary contrarian investor Doug Casey at the time.
The guy was (and still is) a huge advocate of storing much of your wealth in physical gold and silver.