I spent last week at natural resource legend Rick Rule’s conference in Boca Raton, Florida.
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Rick and I have been friends for almost 35 years, and every year he puts on a conference I try to attend if my schedule allows.
Over 1,000 attendees and several dozen companies in the resource industry were there.
Consider it a place where the who’s who meets the who’s not… or at least, not yet.
It’s a chance to meet executives from Agnico Eagle Mining (AEM) and Seabridge Gold (SA). But there are also lesser-known companies that get a prime-time platform over this four-day event.
Several of them caught my eye, and I had a chance to sit down and chat with some of the CEOs.
I’ll be visiting with two of them next week at our Monument Traders Alliance Bootcamp in Vancouver. Depending on how it goes, you may see them grace the cover of my Monument Trend Advisory newsletter in the coming months.
What 1,000 People Agreed On
The things that met with unanimous acceptance at the conference…
- Gold is in a bull market and pullbacks are buying opportunities (what would you expect gold bugs to say… though this time I do agree).
- Central banks are still buying gold and selling U.S. dollars.
- The U.S. debt situation is out of control, but this time the rest of the world is diversifying instead of staring at the headlights.
- The war against Iran is artificially propping up the dollar via higher oil prices.
Let’s start with the fact that every gold bull market runs in multiples.
Look at this chart…
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Every gold bull market since 1970 has run in multiples, not percentages. From $34.75 in January 1970, gold went 5.6x into the December 1974 top. It corrected, then ran 8.2x into the January 1980 peak at $855.60.
The whole decade was 24.4x. The next one took 20 years to set up and then ran 7.5x into the September 2011 high at $1,895.60.
From the December 2015 low at $1,048.40 to the high we printed this January at $5,600, this bull market has run about 5.3x. That’s the low end of every cycle on that chart.
Money’s No Object
Now let’s put the rest of it together. Central bank buying hit 244 tonnes in the first quarter of this year alone, on top of three straight years above 1,000 tonnes.
The World Gold Council’s survey has 89% of reserve managers expecting global central bank gold holdings to keep climbing, and a record 45% saying their own institution will add over the next 12 months.
The European Central Bank (ECB) says gold has now passed US Treasurys as the world’s top reserve asset. When they were asked why, 68% pointed to economic risk in the reserve currency countries and named U.S. budget deficits specifically.
That’s point No. 2 and 3 in one sentence. Central banks aren’t diversifying out of spite. They’re diversifying because they can do math.
Why It’s On Sale
And point No. 4 is why gold is on sale right now.
Since the war with Iran started on February 28, gold has dropped by more than 11% from that $5,600 high.
Not because the story broke… but because oil ripped, inflation fears returned, rate-cut bets were pushed out, and the dollar caught a safe-haven bid it didn’t earn.
That’s a war premium built in, but war premiums expire.
So you have the biggest structural buyer in the world accumulating regardless of price… a reserve currency that 68% of central banks are actively hedging against… a bull market that has run for less time than every prior cycle on the chart… and an 11% discount courtesy of a conflict that will eventually end.
YOUR ACTION PLAN
This wasn’t just a gold conference. It was about silver, copper, other base metals, and also rare earths.
Being there in person allowed me to see a dozen companies and CEOs in one spot. And while I crossed a few off the list, I also confirmed that at least half a dozen merit a further look.