Dear Reader,
Listen, I’m no gold bug. Never have been.
Outside of very short-term trades, I’ve barely paid attention to gold – or gold stocks – since the collapse of the last gold bull market.
And that’s exactly why I want to talk to you today.
I’ve made one of the biggest forecasts of my career: Gold will obliterate the 2020 all-time high of $2,075 per ounce and rally to $5,000 per – in the next 180 days.
High inflation this persistent, a recession looming, central banks stockpiling, the debt ceiling issue destined to rear its head again, and the possibility of interest rate cuts by the Federal Reserve toward the end of this year into next are all converging to create this huge opportunity.
And there’s one way I think you should be playing it.
How to Extract the Most Cash
Sure, you can buy SPDR Gold Shares (GLD) – a stock fund tracking the price of gold – on any mainstream brokerage account and do pretty well over the long term.
But the key here is to understand how to play it for short-term profits based on the many price fluctuations we’ll experience along the way.
That’s through options.
These are contracts to buy or sell a given stock at a given price at a future date. It’s like locking in the price of a house a year in advance by putting money down to secure the price you’ll pay in the future.
But that’s just a metaphor.
Because, when you’re trading options, you’re mostly trading that down payment – the premium – against people who want that premium (or don’t want it). You’re putting down less money initially, and the potential upside is proportionally much larger than the underlying stock.
Let’s take a hypothetical example.
In the short term, you believe GLD is going to hit $190 a share. You decide to buy an option to purchase the stock at that price two weeks from now – what’s called a “call” option. That costs you $1 per contract. Options trade in “lots,” so you need to put down 100 times whatever the option contract costs – so you have $100 down.
Pretty good.
Now let’s say – hypothetically of course – that Congress doesn’t raise the debt ceiling, and the market goes in the tank. Gold will inevitably rise in a situation like that, and in a week, GLD costs $192.
Your contract? Up to $2 per. That means you just doubled your money and made $100 in pure profit in a single week. Of course, a situation like that can work out in a million different ways. You can also utilize options to play short-term fluctuations to the downside – which are called “puts.”
Now, these are topics we’ll be covering in Power Profit Trades every week. And we’ll be covering the roadmap to $5,000 an ounce along the way.
But first…
Three Commodity Stock Targets
This gold runup isn’t just about gold.
Commodities in general are about to see the runup of a lifetime. And it’s all on the back of the clean energy transition.
Listen, I don’t care which side of the aisle you’re on or who you support. I follow the money – and in this situation, you should, too. Look at this chart, and you’ll have a tough time thinking otherwise…
Source: Glowlit
These commodity supercycles have the potential to make thousands of people wealthy – and I want you to be in that camp. Copper, lithium, nickel, cobalt, steel, and others are going to surge like we’ve never seen.
Electrical vehicle battery production will increase and renewable energy solutions like wind and solar will surge… all riding on the extraction and manufacturing of these metals across the world.
- The world’s largest gold miner, Newmont Corp. (NEM), is betting huge on copper and recently made a $17.5 billion acquisition of Australian miner, Newcrest Mining Ltd. (NCMGY).
- Exxon Mobil Corp. (XOM) is quietly scouring Arkansas for lithium.
- And the Wall Street Journal recently published a story about the difficulty in extracting nickel across the world, and mainly in Indonesia – because demand is high but supply is low (which means prices could skyrocket).
All of this is pointing to these three companies moving much higher ahead…
1. Barrick Gold Corp. (GOLD)
Barrick is one of the biggest names when it comes to gold mining because of its global presence. The $30 billion behemoth has gold and copper operations all over the United States, Canada, South America, Africa, and the Middle East. In all, they have 16 sites in 13 countries.
Last year alone, they produced 4.14 million ounces of gold. And it’s already on track to achieve this year’s goals, too. With that level of production, they’ll be one of the largest beneficiaries of this new gold rush.
And what’s nice about them is that they pay you to watch as their stock price could move higher – sporting a healthy 2.33% dividend yield.
With everything happening in the world and around Barrick, I think we could see a 10% move higher over the next six months, which means you’ll want to buy in today.
2. Pan American Silver Corp. (PAAS)
Pan American Silver is, like the name suggests, one of the world’s largest silver producers, with production in silver, gold, zinc, lead, and copper across North and South America.
Last year, it produced a whopping 18.5 million ounces of silver and 552,500 ounces of gold – their second-highest on record.
And, what’s more – and where I really see the driving force for higher prices – in April, it completed its $4.8 billion acquisition of Yamana Gold Inc., adding four additional mines to its portfolio.
With all of that going for it, I expect an even bigger run here – about 20% – over the next 180 days.
And the icing on the cake is just like what we had with Barrick, because holding Pan American Silver yields about 2.6% annually in cash (distributed once a quarter).
3. Southern Copper Corporation (SCCO)
Copper, copper, copper. It’s one of the only things I hear about nowadays. And it’s no wonder why… it’s one of the most essential metals when it comes to the clean energy transition. But there’s also a serious supply and demand issue here, as demand is forecasted to be around 36.6 million metric tons by 2031, yet the supply will only be 30.1 million tons… which will push prices much, much higher than they are today.
And that’s why I think Southern Copper is an incredible play here.
It’s one of the largest publicly traded copper mining companies and lowest-cost copper producers in the world. Outside of copper, it also mines gold, silver, zinc, lead, and molybdenum (a mineral used to make alloys). While its overall copper production dipped to 894,703 tons last year (a 6.6% decrease, year over year), the stock has already jumped double digits in 2023. We’re looking at one of the best copper stocks to own, in terms of value, growth, and performance.
Just like Pan American Silver and Barrick, Southern Copper will reward you for holding their stock over the next six months (in what I’m projecting to be a 20% runup) with a 5.6% dividend yield.
Now, listen.
Do I think you’ll do extraordinarily well with these companies over the next six months? I do.
But I have a list of 55 companies you can learn more about by clicking here. I expect each one to experience similar price action as the ones listed above.
And those are truly just the beginning.
On Power Profit Trades, we’ll be covering short-term trades on gold. We’ll be talking about this commodity supercycle and covering different ways to trade and invest in it. We’re going to be talking about making money in EVERY corner and crevice of the market – wherever that may be on any given week.
I’m so excited you’re here. And I’ll talk to you again soon.
Tom Gentile
America’s #1 Pattern Trader
