Posted By Isaac Nuriani
Astute readers will recall, in last week’s blog, we pointed to bullish developments for Barrick Gold, a large mining company, and explained how this tends to confirm the underlying strength of precious metals. Barrick is not an isolated outlier! For confirmation this week, we look at Northern Star Resources, which just announced an increase in gold reserves from 2.3 million ounces to 3.5 million ounces. This news goosed share prices 3.8 percent last week.
Northern Star has been astutely buying up other producers, such as the gold mines named Paulsens, Kanowna Belle and Plutonic. When the capacity of these mines are added to its own exploration, the company forecasts gold production of up to 575,000 ounces in 2018.
Gold Miners and Shareholders Bullish on Gold Investing
Now, the first thing you have to understand about gold miners is that they don’t expand production unless they see a continued uptrend in gold prices. In other words, whatever the short-term volatility, gold miners and shareholders are bullish on gold over the intermediate/long term.
Turning to the short term, I found a new article from Seeking Alpha particularly informative. Respected commodities guru Andrew Hecht sees fundamental and technical support for gold. On the fundamental side, the weak dollar serves as a forecast that the Federal Reserve will slow down interest rate increases -- a positive for gold. That’s because gold competes better when bonds pay less interest. His technical analysis reveals a slow climb toward $1,300 an ounce, with the possibility of hitting $1,400 before the year ends. Hecht likes the looks of the gold chart, and forecasts new highs if gold can break above the $1,428 level. He also points out that gold withstood mini-crashes on June 26 and July 6, a sign of long-term strength.
With this and signs seen in the other actions of companies like Barrick, it seems that now is a particularly critical time to monitor gold prices. Remember the age-old adage: Buy on the dips. Gold prices are volatile right now, which means you have plenty of opportunities to stock up during temporary retreats.
And we think the best way to build a gold stockpile is using it to protect an IRA and 401(k). One of the best ways to do that is through an Augusta® Gold IRA. Just think of the benefits. First, you get a tax deduction on your physical gold IRA contributions -- up to $6,500 a year for folks 50 and older. Secondly, you don’t have to pay taxes on your gold while it remains in your IRA. You only owe tax when you withdraw gold from your IRA, hopefully when you are in a lower tax bracket. Don’t delay! Open a physical gold -- or silver -- IRA today with August Precious Metals, the perfect vehicle for investing in gold.
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