Welcome to the first day of July.
Today the Canadian stock exchange is closed for Canada Day, but the US stock market will be open today. Some will be looking to buy gold, silver, and mining stocks after the opening bell, because yesterday the price of gold hit another new 52-week high and it is trading up again this morning in pre-market action.
This is the start of the year of triumph for gold bugs.
Take a look at this chart of gold.
Gold has been one of the best performing assets for all of 2020. As big money managers see the first half of the year go by they are in need of beating the market now going forward. Gold is going up and gold is also acting as an alternative safe haven for bonds when bonds yield nothing. This is why only more money is going to flow into the precious metals world. The easiest move they can make is shift some of their money out of bonds and into gold.
And higher gold and silver prices mean more profits for mining companies and rising stock prices.
There are a lot of great mining stocks now lining up and I will have a new pick tomorrow. But one thing you do not want to do is buy into the toxic ETF JNUG. This is a leveraged junior mining stock ETF and as you can see from its chart it has barely gone up while gold and mining stocks have.
This ETF malfunctioned in March and has never been the same ever since. Several people – myself included – have been warning people for years to avoid this ETF. The problem is leveraged ETF’s like this have decay factors in them that make them bad investments over time and the more leveraged they are the more they are at risk of malfunctioning.
And it happened with JNUG in March.
Avoid NUGT too.
In fact you must avoid all leveraged ETF’s for precious metals and commodities.
If you want big gains the best place to place your bet is in small cap mining stocks now so stay tuned for my new stock pick tomorrow.
-Mike
