Why you need to know about this obscure market manoeuvre

Wednesday, 21 March 2018
Melbourne, Australia
By Bernd Struben

  • Why gold is poised for a big move higher
  • Lifting the lid on ‘the Silent Crossover’

Did you read the email you received from our Head of Research, Greg Canavan earlier today?

If not, be sure to check your inbox. After you’ve finished Port Phillip Insider, of course.

Even if you don’t subscribe to any of his paid services, you’re probably familiar with Greg. He’s been researching and writing financial newsletters for Port Phillip Publishing longer than anyone else…save for publisher Kris Sayce.

These days Greg writes for our free e-letter, Money Morning. He’s also the editor of one of our newest premium services, Greg Canavan’s Exclusive IPO Investor.

But the email he sent you has to do with Crisis & Opportunity. That’s the highly successful introductory investment service he’s been spearheading since day one.

More specifically Greg’s email invitation involves a new research report and investment recommendation he only just released today.

You see, Greg is convinced gold is poised for a massive rally. All the signs point to a potential price surge the yellow metal has only enjoyed twice before.

The first time was in 2001, following the dotcom crash. Over the next seven years gold gained 280%.

The second time was in January 2009. I’m sure you recall that time as fondly as most investors. The GFC was gutting stock markets around the world. And gold began a run that would see it gain 115% by mid-2011.

All of Greg’s research indicates gold is on the verge of a similar historic run. One that could see bullion gain 50% over the next two to three years.

If you’re holding bullion that will come as good news to you.

But Greg Canavan’s recommendation isn’t to buy more bullion. Instead it has to do with an obscure market manoeuvre. One he expects to deliver early investors a 100% return before October. Longer term, he believes the gains could be 10 times that much.

Now, there is a speculative element to this.

But as Greg says, ‘I’m not a speculative guy, I like to minimise investing risk as much as possible.’

We’ll look at why he believes gold is about to rocket right after the markets.

Or you can click here now to get all the details from the man himself.

Markets

Overnight, the Dow Jones Industrial Average closed up 116.36 points, or 0.37%.

The S&P 500 gained 4.02 points, or 0.15%.

In Europe the Euro Stoxx 50 index finished up 17.29 points, or 0.51%. Meanwhile, the FTSE 100 climbed 0.26%, and Germany’s DAX gained 90.31 points, or 0.74%.

In Asian markets, Japan’s Nikkei 225 is closed for the Vernal Equinox. China’s CSI 300 is up 0.64%%.

In Australia, the S&P/ASX 200 is up 16.92 points, or 0.27%.

On the commodities markets, West Texas Intermediate crude oil is US$63.76 per barrel. Brent crude is US$67.61 per barrel.

Gold is trading for US$1,310.33 (AU$1,703.72) per troy ounce. Silver is US$16.20 (AU$21.06) per troy ounce.

One bitcoin is worth US$8,904.38. That’s up 3.5% since this time yesterday. And it’s up 9.00% since I penned Monday’s Port Phillip Insider…when we revisited our November ‘sell the banks and buy bitcoin’ premise.

But when it comes to all matters crypto, don’t take my word for it. Get your bitcoin advice from the experts here.

Oh, and the Aussie dollar is worth 76.91 US cents.

Why gold is poised for a big move higher

Greg cites five reasons why he expects gold to go on new bull run. Any one of them should be enough to see gold surge.

  • Concern over a possible global trade war
  • A pick up in global inflation expectations
  • A flight to safety in the event of a general market correction
  • Continued weakness in the US dollar
  • Playing catch-up to other commodities that have significantly outperformed gold over the past few years.

We don’t have the time or space to detail all five points here today. But let’s take a quick look at some key points.

First, the US dollar. Greg explains that a weak US dollar almost always correlates to high gold prices. And as the US dollar index falls, gold almost invariably rises.

The latest data from the Federal Reserve index that tracks the US dollar indeed shows a very strong correlation.

From Bloomberg:

From 1974 through the end of 2017, a Federal Reserve index tracking the dollar has increased in 25 calendar years and fallen in 19 of those annual periods. The average annualized returns for gold when the dollar was up in a given year was minus 1.7 percent. In the years when the dollar index finished down, gold was up an annualized 16.4 percent. So gold does much worse in a rising dollar environment. In fact, the correlation of the prices of gold and the dollar is minus 0.6 since 1974, signaling a strong inverse relationship between the two.’

So how is the US dollar faring?

Greg showed the following chart in today’s Money Morning:



chart image

Source: Optuma
Click to enlarge


As I’ve confessed before, technical analysis isn’t my forte. But as Greg explained, the US dollar ‘broke down through long term support in January, which was a bearish development.’

Now the US dollar may gain some ground if the Fed raises interest rates overnight (Aussie time), as is widely expected. But the dollar still has a lot of work ahead for the dollar index to finish up.

Score one for gold.

Next up is the flight to safety in the event of a general market correction.

Now if markets truly crash gold is likely to suffer short term as investors sell whatever they can to cover their losses.

But in the event of a correction investors tend to flock to safe haven assets. And gold has long enjoyed top billing as a safe store of wealth.

We saw early signs of a correction earlier this year. The Dow lost 10.36% from 26 January to 8 February. And it’s still down 7.34% from its 26 January peak today.

If markets take another turn for the worse, gold will almost certainly benefit.

Next up is global inflation expectations.

Inflation in Australia remains ‘stubbornly low’ at around 1.9%. (Regular readers will know this is about 1.8% higher than the target I believe the RBA should set. But that’s a story for another day.)

Inflation in the US isn’t much higher, at 2.2%.

But the country’s 4.1% unemployment rate — essentially ‘full employment’ — coupled with Donald Trump’s US$1.5 trillion tax cut and massive spending plans, could see inflation take off a lot faster than most suspect. Which is why new Fed Chairman Jerome Powell is looking at raising interest rates three, if not four times this year.

Gold, of course, is a great hedge against inflation. And if inflation takes off, or even if investors believe it may, the gold price should rise accordingly.

The last thing I’ll briefly cover today is the spectre of a global trade war. I’ve cautioned about this since Trump’s first days in office. He’s been crystal clear about his intentions to address what he sees as unfair trade practices.

Steel, aluminium, solar panels and washing machines have already been hit by tariffs. But with the US’ record US$375 billion deficit with China in mind, Trump’s not done yet.

From Bloomberg:

The Trump administration plans to impose tariffs worth as much as $60 billion on Chinese products as early as this week to punish Beijing for what the U.S. perceives as intellectual property theft from American businesses, according to two people familiar with the matter.’

To date, China has been stepping lightly in terms of any tit for tat response. The Chinese, after all, have a lot to lose in a trade war. But that doesn’t mean they’ll take every new round of tariffs lying down.

If trade ructions continue to heat up, that uncertainty will also be good for gold.

And Greg is convinced he’s found the best way to play this. But not by loading up on gold bullion. He believes there is a ‘much more lucrative way to play this potential move’.

You can find out just what that is by clicking here.

Lifting the lid on ‘the Silent Crossover’

The response to Ryan Dinse’s yet to be released Whitepaper has been overwhelming.

The report is titled ‘How to Land Mega-Baggers from ‘Silent Crossovers’’. And 2,536 people have already signed up since we opened registration to receive the report yesterday.

A ‘silent crossover’ occurs when a small-cap stock grows to a point where it is suddenly just large enough to attract institutional funds. And when that happens, at least with a quality company, it can see a wall of money flood into the stock.

I don’t need to tell you what happens to the company’s share price when that unfolds.

The trick, then, is uncovering this crossover before it happens. And taking a position in the small-cap stock before the institutional money pours in.

Ryan explains exactly what to look for, and how you can ride ‘the Silent Crossover’ to true ‘mega-bagger’ gains in his brand-new Whitepaper.

And it’s absolutely free to anyone subscribing to one of our paid services. But you’ll only get it if you register your interest.

To make sure that you get your hands on his new Whitepaper — at no cost to you — register here.

And finally, from The Australian Tribune:

Trump Defies Critics, Moves to Improve Relations with Putin

If the entrenched politicians in Washington had their way, relations with Russia would remain hostile for decades to come.

It’s convenient to have an enemy, after all. One you can blame for your own policy failures.

Not to mention there are plenty of powerful vested interests…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd