Gold rallies, in general, in response to numerous catalysts and the BIGGEST of them all just triggered. We’ll receive confirmation in the coming days. 

For one, gold is not affiliated with any nationality, so institutions of every country as well as individuals (to a degree) buy it in times of great uncertainty. Gold is also purchased as an inflation hedge, though it’s not the most effective one. Its expertise is with cases of hyperinflation (5% and higher). On a day-to-day basis, it is bought mostly as jewelry, so the price of oil, as well as salaries of miners, who labor to dig it out, play a part in shaping its price, but its most driving factor is NEGATIVE REAL RATES.

Nothing, absolutely nothing, moves gold prices higher like seeing cash burning a hole in your pocket, due to negative rates. Warren Buffett, the greatest investor in the field of identifying businesses that possess unique competitive advantages, mocks gold and compares its return with that of stocks in order to show how much stock market gains eclipse those of precious metals, but that’s a big mistake on his end.

I never buy gold with the expectation that in doing so I’ll make bigger returns than in my real estate portfolio or in my stock market portfolio; I buy it when my cash savings are GUARANTEED to lose money, and I sell it when interest rates are positive again.

Better said, I load-up on gold in times of negative real rates and unload when those conditions change, for a profit. On top of this Cash Alternatives Portfolio, I maintain a core position in physical gold and silver eagles equivalent to my family unit’s spending needs for 24 months, in the unlikely case that during my lifetime there will be a grave economic disturbance, or a reset of the system that puts us all in a situation that actually requires bartering precious metals or worse. That position never changes and I consider that one to be INSURANCE.

The big news is that in the past 3 days, we’ve seen confirmation of negative interest rates!

Courtesy: Zerohedge.com

Gold spiked to $1,420 immediately after and silver has followed suit, remaining well above its $15.10 support. The reason is that the “risk-free” yield, which our financial system is based on – the 10-yr Treasury note – currently returns just about 2.00%, and that dropped to as low as 1.91% a couple of days ago.

Inflationary expectations are also 2% this year, which puts us right at the border between positive and negative (10-yr yield minus inflation).

Since the FED isn’t lowering its inflation forecast down from 2%, but is about to cut rates, investors are pricing in that a period of negative real rates (10-yr yield – inflation) is commencing.

This is the reason the S&P 500 is breaching past the historic 3,000 points mark. It will probably go up as much as another 20% by the time the slowdown really starts to take effect and investors detonate this bubble and move to other asset classes.

1. Abbott Labs: Our No.1 medical stock is up 120% in the past two years, since we first published our alert on it at $39.66. The stock now trades at a FRESH all-time high!

My first exit point is $98/share with ABT. For now, I’m holding. Here’s Our ORIGINAL report on it.

2. Kimberly Clark: Our most defensive pick, along with Nestle. Both are trading at FRESH all-time highs as well. Both are HOLD. Disney, which we profiled at $109.14, is also trading at a NEW all-time high!

Here are out original reports on these three: KMB, NSRGY and DIS.

Right now, I’m researching four brand-new, long-term dividend opportunities: AT&T (biggest dividend yield of any large-cap stock at 6.04%), Leggett & Platt (super-solid manufacturer of everyday items), and Archer Daniels Midland (largest agricultural company of its kind – brilliant inflation hedge and bet on hard assets). I plan to publish which of these I’ll be personally buying in the weeks ahead.

3. Franco-Nevada (FNV) and Royal Gold (RGLD): what can I say that hasn’t been said already about my favorite gold royalty companies? BOTH are trading at fresh all-time highs, up NEARLY every day since we profiled them on June 14^th.

In the early stages of a bull market, the big names rally first. Then silver joins in, at which point the small-cap miners go nuts. I expect that to begin happening once silver hits $17.00/ounce.