Mega Moon Time for Metals!

At long last, the media is starting to notice that tangible assets are in a generational bull market. People will latch on to a story after the move is already in progress, and that’s when the money really starts to flow in.

Hopefully, some of you added to your gold positions a year ago when it was below $2,000 per ounce. Then it was just a matter of waiting for the breakout – but as they say, the waiting is the hardest part.

For some people, the hardest part is not getting distracted. Everybody’s talking about NVIDIA’s earnings this week, since the mega-cap stock market’s rally has rested on this one company. It used to be Apple that held up the stock market, but apparently now it’s NVIDIA.

That’s on the front page of the mainstream news, but as usual, the best opportunities aren’t on the front page. The smart money looks for back-page news that hardly anybody’s paying attention to now but will be talking about later.

These are the news items that politicians would prefer to suppress, so you might have to do some digging to uncover it. For example, the U.S. federal debt is now up to $34.5 trillion, or roughly $11 trillion more than it was in March 2020 when the pandemic took hold.

Also during that time frame, the government’s annual interest payments have skyrocketed. Just the interest payments alone now exceed $1 trillion per year. None other than Federal Reserve Chairman Jerome Powell warned about this, saying, “We’re running big structural deficits, and we’re going to have to deal with this sooner or later, and sooner is a lot more attractive than later.”

Moreover, regarding the U.S. deficit, the Congressional Budget Office (CBO) projects a $1.6 trillion shortfall in fiscal 2024. “Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the corona­virus pandemic,” the CBO’s report stated.

This, more than any hope of short-term price moves, is the best reason to own precious metals now. By owning tangible assets that represent a universal form of money, you’re not subject to counterparty risk – and that counterparty is a government that refuses to manage its expenditures.

They can’t print gold or silver, which is why the government got off of the gold standard half a century ago. It’s been a slow-motion train wreck for fiat money during the past 53 years, with the U.S. dollar relentlessly and reliably losing its purchasing power.

However, that slow-motion train wreck doesn’t mean gold and silver will always go up slowly. That’s not how it works. Precious metals will typically go through choppy, sideways consolidation periods for a while. That’s when we find out who’s serious and patient, and who’s just a precious-metals tourist.

Central banks and smart-money investors hoard gold because they know what’s coming. Then, commodities traders wake up and smell the coffee. They start to panic-buy metals and the retail crowd jumps on the bandwagon, pushing the prices up even higher.

That process is just starting now. The deteriorating dollar is a major catalyst and will continue to be for the foreseeable future. Libertas Wealth Management Group President Adam Koos identified some other recent catalysts that are moving metals prices, including “economic uncertainty boosting demand for safe-haven assets, supply-chain disruptions impacting availability, and increased industrial demand, particularly for green technologies.”

We’re even seeing a breakout in copper prices, which has been long overdue and hardly mentioned in the mainstream press. People don’t think about copper very much, until they realize that it’s an essential industrial metal and there’s a major supply-demand imbalance.

The next thing you know, the copper price is breaking out along with silver, another crucial industrial metal that’s in short supply compared to the demand for it. Without copper and silver, there will be no green-energy transition that industrialized nations are now mandating.

Really, it shouldn’t be a surprise to anyone that copper broke above $5, gold moved above $2,400, and silver headed toward $32. This was inevitable and evident to investors who didn’t get sidetracked by the latest shiny object, whether it’s AI and NVIDIA or meme stocks or whatever the flavor of the month might be.

Truly, the most delicious flavor is the taste of profits and the vindication that comes with holding tangible assets through the various cycles. We stayed through the choppy phase, and now we’re entering the parabolic phase, which is only just getting started for gold, silver, and copper.