Stock Market Wealth

COUNTDOWN TO ZERO: Interest Rate Cuts to Send Gold Miners Soaring!

by | Jun 10, 2019 | Personal Finance

It’s not a question of if or when anymore, but a question of how many interest rate cuts will occur in the second half of 2019. Now that the Federal Reserve has categorically declared that it “will act as appropriate to sustain the expansion,” there’s no question that America will join Germany, Japan, and Switzerland in a zero or negative interest rate experiment.

President Trump is fully in line with this policy, as he made abundantly clear in a recent interview with Fox News: without the Fed’s rate increases, “the stock market would be up 10,000 points more, but now we have a very conservative approach,” explained the President, and by “conservative approach” he means maintaining rock-bottom interest rates.

Trump also wants a weak dollar and has specifically stated that the U.S. dollar “is getting too strong.” It might seem illogical to want a weaker dollar, but from a global trade perspective, it makes sense for America to have a more affordable currency. As Trump sees it, a weaker dollar would make American-made goods cheaper and more attractive in the global markets.

This poses a major threat to the dollar, jeopardizing its long-standing status as the world’s reserve currency. But what’s bad for the dollar is terrific for precious metals and the companies that mine them. As for American bonds, the imminent interest rate cuts are also great news for metals and miners.

Courtesy: ZeroHedge

As the chart above shows, an interest rate cut next month is practically a foregone conclusion. That will leave five more months for one or two more interest rate cuts in 2019, after which I fully expect more cuts in 2020.

Interest rate cuts will provide a huge boost for hard assets, and history shows that when gold rallies, junior gold miners can go absolutely ballistic. I’m personally looking forward to easily outperforming the market indices with my natural resource stock allocations.

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I’m not saying that you can’t have any S&P or Dow holdings – that’s fine if you want to ride out the tail end of this decade-old bull market and hope for the best. After all, those interest rate cuts, coupled with a timely trade deal, might just keep the bull alive a little bit longer.

As for me, I don’t consider “hoping and praying” to be a viable investing strategy. My strategy is based on data, and the data indicates that gold and miners are sensitive to interest rate cuts – but in a good way. Heck, even the hint that the Fed will cut interest rates was enough to send gold prices to a short-term high:

Courtesy: U.S. Global Investors

My direct question to you, then, is this: are you ready to beat the markets? If you’re not investing in gold miners right now, you should be. My personal pick is the company that owns the Tuscarora gold project in Nevada’s prime mining district – a company called American Pacific Mining Corp. (CSE: USGD, OTC: USGDF) which is publicly traded and currently quite undervalued.

I’ve looked through a lot of gold miners, and believe me, they all start to look the same after a while. To catch my attention, a company really has to stand out, and American Pacific just has that ideal combination of experienced leadership and the rare ability to pick out prime mining assets and acquire them at ridiculously low prices.

In fact, the multinational gold producer OceanaGold is so confident in American Pacific that they’ve agreed to invest $4 million over the next four years in their flagship Tuscarora project. OceanaGold will invest $625,000 just in the first year, indicating an eagerness to explore and develop this historic, past-producing asset.

As American Pacific President Eric Saderholm has pointed out, OceanaGold is already in the process of lining up the contractors to commence a gravity survey at the Tuscarora site. As we head into the summer, the survey will provide important data so that the on-site drilling can start soon.

With my investment in American Pacific shares, I don’t have to worry about trade wars or aging blue-chip bull markets. Instead, I can relax and enjoy the ride as bond yields hit the floor and my favorite gold miner soars.

Best Regards,

Lior Gantz
President, WealthResearchGroup.com

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Legal Notice:

This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. Wallace Hill Partners, a Canadian LTD, which is owned by the individuals that own Wealth Research Group, has entered three year marketing agreement with American Pacific Gold and has been compensated two hundred and fifty thousand dollars and has received two millions and eight hundred thousand shares directly by the company. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.

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