If you’re following rising oil prices that are smashing records right now, it should lead you directly to gold.
Inflation is coming, and some say gold is our only true defense.
Oil prices are now at a six-week high, with Oman even predicting that prices could increase to $200 per barrel if global climate policies are pushed through.
But it all could mean higher inflation.
As oil prices rise, inflation tends to rise in tandem because oil is a major input in the economy. When those inputs rise, costs do the same, leading to inflation. That’s why Biden has been calling on OPEC to produce more to keep oil prices down. It’s all about taming inflation.
Gold is considered a hedge against inflation.
Gold soared in 2020 on realized fears of inflation when stimulus checks started hitting American accounts. Gold finished 2020 up 28%–its biggest win since 1980.
And while gold may have already priced in inflation based on pandemic stimulus, what we think it didn’t figure in was soaring oil prices.
While oil prices look set to break new records, gold is flying under the radar, and there has never been a better time to gain direct exposure against the coming inflation.
Right now, smart money is looking at gold. But it’s not looking at physical gold …we think it’s looking at small-cap miners who stand to benefit the most from future inflation.
Why We Believe Discount Gold Is The Only Gold To Watch
Fear is a bargain. And right now, with the Delta variant of COVID-19 surging through the world, threatening renewed lockdowns and more economic stimulus, and with oil prices rising, we think gold should be on everyone’s radar.
But there’s only so many ways to find discount gold …
Our pick for the best avenue is through the potential of the small-cap miners and their underpriced assets that could realize outsized gains with any jump in gold.
With gold trading in the $1800 range, imagine getting it for $2-$3 an ounce, instead. This may be the ultimate safe haven.
When Wall Street hunts for bargain gold, it targets the junior miners with major upside potential, setting short-term price targets that could make these juniors look incredibly undervalued.
Discount gold was a hot commodity when gold prices were in the $1200 range not too long ago. When they’re in the $1800 range, it becomes even more precious.
Big miners don’t offer the same potential upside.
In 2016, we saw a run on junior gold miners for the same reason. Then, we saw gold increase by about 26% in 6 months.
Even mid-cap Endeavour Mining Corp gained nearly 200%. IAM Gold gained nearly 260%.
The smaller you go, the bigger the potential gains. Small-cap Argonault soared by nearly 300%, while Great Panther Mining jumped by about 340%.
For 2021, the numbers look even better, with $1800 gold, coming off a 28% increase in 2020, and oil-price-led inflationary fears appearing to mount fast.