Brien Lundin: Gold Stocks Due for Takeoff, Get Positioned Ahead of FOMO

[Music] [Music] I'm Charlotte McLoud with investingnews decom and here today with me is Brian London editor of golden newsletter thank you so much for joining me great to have you here always a pleasure Charlotte very good to be catching up and we're here at pdac and you you have presented or maybe you soon will present I've gotten to the point where I don't know what order things are happening in but you're going to be talking about Rial factors for B in 2024 so I thought we could start there and just get the overview from you and then we can drill down into your topics absolutely the the big picture is that the market is now trying to price in a Fed pivot and uh investors are kind of reaching out in the dark ahead trying to feel for that pivot when it's going to occur and they're really not finding feeling anything they don't know now we had expectations shift from from March to now uh no you know May or June maybe even July and so we've had some volatility as the market has tried to do that we saw the same thing last year when the the markets tried to to price in a Fed pause and then that pause came four or five months after the first signs that maybe it might happen so that's really all it is uh right now and I think the markets are are missing the big picture largely and that's the fact that the FED will pivot this year they'll have to Pivot this year because of uh the the cost of servicing the federal debt at these interest rate levels we just passed excuse me we just passed a trillion dollars a year in annual interest costs on the federal debt that's going to rise precipitously from here we're going to uh have close to a trillion dollars of commercial real estate in the US that'll get repriced this year at higher interest rates we have uh much larger debt tsunami out there that's about to hit the shores of the global economy as commercial corporate debt resets occur throughout the world uh so it's rates will have to fall the FED will have to Pivot and other central banks will follow sup when that happens gold should do very well I mean we during the what's arguably the harshest rate hik environment or a rate hiking cycle in fed history we saw gold gain $400 an ounce so with that kind of a headwind of Fed rate hikes gold gaining $400 it should do even better and M probably much better when the FED actually starts cutting rates okay lots of paths for us to go down there and I I thought you would probably mention the debt because I know it's it's something that you watch very carefully and I saw a headline about it that I wrote down just especially because I knew you were coming so this headline was saying it's it's Rising by a trillion every 100 days is the dead and we've talked before about some of these really wild numbers out there with regards to the debt but then it seems that people they just don't register for people so what what are your thoughts there yeah well I'll uh give you an even more shocking number perhaps the uh I I Was preparing my speech for pdac and I had to do the the PowerPoint and the slid so a little more than a week in advance so a little over a week ago I looked at the federal debt number and it was 34.2778313 uh we're just in a situation right now where it's accelerating very quickly because we're not getting tax receipts in yet in the US all that said we're at a rough run rate of probably a $2 trillion Federal deficit with the current spending plans in place once you add a trillion dollars just in interest cost and servicing the debt then you want looking at three trillion added to the federal debt um every year and then on top of that you have certain off-budget expenses that don't appear there that range3 to 500 billion so the federal debt quite easily could add three three and a half trillion this year um the situation is frankly it's is out of control the way it's growing but if you look at the cost of servicing the federal debt at these interest rates it has gone nearly vertical um so a trillion dollars a year is only the starting point if they leave rates at these level LEL so frankly they just have to cut and I guess my next question so they have to they have to do this and you mentioned we're kind of groping around in the dark trying to figure out when is it important to know exactly when or should we just focus on getting ready right now if if you're a Trader then you you want to know when and that kind of a thing but if you're investing uh in gold in mining stocks if you're at this conference where Bargains Galore all over the place and and companies that that will be trading at four to five times at current levels if the market just normalizes then I don't think you want to put to fin a point on timing it uh the the the key is is that you want to be involved in the sector you want to be positioned in it for when it turns and you can just have confidence is probably going to turn sometime this year and okay so we start turning around inflation is not under control what happens to that yeah if inflation is under control we'll see if if that happens there's uh and frankly I don't think anybody knows I I think we're probably going to settle out in the 3 to 4% range of some spikes along the way it's going to be very difficult I believe to to keep inflation around their their 2% Target but even so what we're going to see is at some point the FED is going to be loosening monetary policy even if inflation uh remains where it is they they just have to um so I I think that's the real point I think if you focus on the inflation numbers which the market is obviously doing because every time we have hot inflation they weirdly sell gold because that's the way the world works these days but uh but I think we just have to look at fed policy and where it's going it has to go and monetary policy is going to get more accommodating over the longer term because the the economy and the global economy isn't built to withstand these kinds of interest rates and I've been I've been waiting till 2024 to start asking about the US election but any any points that we should watch when it comes to the orans and or gold in an election year yeah I don't think there's going to be much uh impact really I think it's really in monetary policy um you know if you try to to look at it in some depth you can say that that Trump is an interest rate Easy Money kind of a guy and if if he wins uh he may push for that and he may fire uh uh chair pal and and get somebody in that's going to be more accommodating to him it's it's not anything that will I think affect gold over the long term uh it could reflect something like a geopolitical crisis just a political crisis in in this case around the election itself those kinds of things affect gold in the short term but if anything I think they're more damaging to a gold uptrend that's that would be in place uh so I you know I don't look at it as being a positive influence on the metals Market much at all and if we if we put all these factors together for the gold price as we look out into the year what do you see coming maybe maybe a range for the gold price for gold this year this year yeah I I think uh you know one of the the points I make to people is that gold is is put in four maybe five tops depending on how you count it around the 2065 to 2085 range uh and we very recently you said an alltime uh uh high on a daily spot basis and for the market the generalists out there to come into this Market we need to prove that we can break out of that range decisively so the goal for gold right now the challenge for it is to get to 2100 2150 something that on the charts shows a clear Breakout now I think that this year we're going to get there and my point being that once we get there we're going to draw in generalist money that I think is going to propel the price to a higher level so I would say around 2,300 for this year uh much longer term if we're in that kind of a secular bull market that is typically created by a a big shift in monetary policy like this uh it goes much higher and I think this is this is a question of the car for s the year so far for me people are looking at Gold they see it historically high with further to go and they wonder about the gold stocks and when will they move and is is do they need also that 2100 I think so and and I think the number is probably closer to 2150 now um but yeah and they will they they need higher gold and uh it I tell people all the time the market doesn't care what the price of an asset is they care about where it's going so even even though major mining companies are making good money at current gold prices it's a very healthy gold price uh their share prices are still in the dump because they haven't attracted that speculative demand because it's not a confirmed uptrend once we are able to show the generalist investors out there confirmed uptrend which means like 2150 and going up I think the money is going to flow and I think that will very quickly lead to uh uh a a big rally in the mining stocks cuz doesn't take that much money for this relatively small Market I think I think that helps explain something I've been wondering about which is you know for a long time we heard you know when we get to 2,000 that's when people wake up but maybe maybe some people have but certainly not everyone but it's because we need to see that more conf front yeah I I do think we need to go higher because we we've gone over 200 four or five times now or at a peak around that this level I mentioned earlier without going higher so that's really the problem it hasn't broken through to the upside and once it does I think things change so the last I think the last couple of times we've spoken anyway you have been pretty much fully positioned with really not verying much money on the sidelines is that still the case yeah kind of uh literally this morning uh going around the the show FL I found one or two opportunities that I'm thinking I'm going to have to sell some things and rearrange uh there some good exploration opportunities uh with established resources and so yeah I'm going to I'm actually starting to deploy some money back into the market but to do that personally I have to sell some things and and do some rearranging in my portfolio but it is a buyer Market there's so many opportunities out there right now yeah and maybe you could shed a little bit of light on how you how you do that shuffling because I think I think that would be of interest to people who might be in the same situation yeah it it's hard because in a market and Junior money stocks in general especially in a low cycle like this uh the question after selling is to whom because it's not always a a bid out there or at a good price so it's hard to sell in this kind of Market uh and and create liquidity one of the things I areas I think or that personally I am is taking some profits in some of the uranium positions I have and redeploying that and what I think is going to be the next fastest horse out of the gate and that's probably Junior Gold stocks Junior silver stocks in the like Junior Gold and Junior okay that make that goes well into my next question which is going to be you know we always spend a lot of time talking about gold but other other Commodities of interest to you right now so we've got silver in the mixes yeah I'm a big believer that you don't get a big bull market in other Commodities or at least in the mining stocks that are associated with those Commodities unless there's an underlying bull market in Gold to kind of draw draw the interest to the general area uh silver obviously is the most direct beneficiary of a of a gold bull market it has always leverage gains in Gold Windows gains in Gold have been for the right reasons for monetary reasons um you know shifts and fed policy easier money that sort of a thing uh not political issues but I think that as far as the equities go if you have an underlying bull market you also have uh a a a good response in Copper stocks because copper is often associated with gold but it brings people into the sector and then you get people looking at all the other areas like you know Rare Earth uranium uh you know whatever the next big thing is going to be but if there's an underlying gold bull market then all of those little negociated markets are just that much more robust oh yeah it can kind of be a Gateway from for people to come in forer and uranium and lithium it's a funny way to put it okay that that was everything that I had hoped to go through today but I'll put it back to you before we let you go and see if there's any final thoughts that you have right now for for investors yeah I I guess what I would say is things can turn very well you know as we're speaking we just had a nice move and gold uh it remains to be seen whether that's going to persist and what's going to happen so we're all kind of on the edges of our seats here waiting for the markets to get going again um but regardless of that it when it moves it's going to move very quickly I think you know people ask me when the last time was us saw the market this the the junior Mining share market that's uh depressed and uh and I tell them in you know in the 2000 time frame it was as well back then gold was selling at $252 an ounce now it's near an all-time high back then gold had to almost double before the Mining stock started to to reawaken now it won't take that long it won't take a couple of years it'll take you know weeks uh or even days and you know you you'll get Whiplash seeing how quickly fomo kicks in and these these socks will take off okay I think that's a great place to leave it thank you so much for coming by to talk thank you Charlotte of course and once again I'm Charlotte cloud with investing news.com and this is Brian London with no [Music] solder

Channel: Investing News

Views: 8,014

Keywords: investing, investing news, brien lundin, gold newsletter, gold, gold price, us federal reserve, inflation, interest rates, debt, gold stocks, junior miners, mining, silver stocks

Id: RBEX6E53sgY

Length: 16min 1sec (961 seconds)

Published: Wed Mar 06 2024