The world’s best crisis hedge, gold, has broken out and reached $1,500 for the first time in over six years, and dollar bulls are panicked – they can’t believe that their precious fiat money has peaked. Gold has gained 26% since its September 2018 lows and has made all-time highs in at least 72 currencies as of January 15, 2019. What will happen to gold when the dollar finally crashes?
That’s the only thing holding gold back from doubling or tripling in value right now: the U.S. dollar has managed to stay uncharacteristically strong for a year and a half. We’re seeing a highly unusual situation in which both gold and the dollar are elevated, but they can’t stay that way for much longer.
Remember, President Trump is in a relentless currency war with China: he wants a cheap, competitive dollar while China wants the same thing for the yuan. Trump will get his massively devalued dollar soon (you know he’s relentless when he wants something), and that’s the final piece of the puzzle that will send gold and miners to the moon.
That’s not the only catalyst that’s gold-bullish: you’ve got the tariff war between the U.S. and China, which is creating international tensions and spurring central banks to stockpile tons and tons of gold. Meanwhile, in Europe, there’s even more tension with Brexit and the euro, meaning more uncertainty in the markets and fiat currencies, which is precisely what gets people and institutions to flock to gold as a safe haven.
Courtesy: Bloomberg, U.S. Global Investors
In times like this, when international stability is imperiled and fiat currencies are under siege in the U.S., China, Europe, and elsewhere, gold becomes more precious than ever. We’ve already seen this in the price of gold against dozens of international currencies, and when Trump gets his cheap dollar (with the Fed’s help, of course, as they love to print dollars into oblivion), gold’s next leg up will take it easily and quickly beyond $2,000.
Plus, and very few retail investors know this, but billionaires are watching this closely, gold production has fallen by 5% per year for the past four years. Resource companies’ gold reserves have been getting smaller, meaning that there’s a looming gold output shortage: it takes a good five years to develop a gold mine, and many exploration companies are years behind schedule.
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The output crunch will naturally put tremendous pressure on the price of gold, and investors will put a premium price tag on a company that can efficiently mine large quantities of high-grade gold – a company like Marifil Mines (TSX-V: MFM, OTC: MFMLF), whose mineral-rich San Roque project in Argentina is operating well ahead of schedule.
In fact, Marifil Mines just received an encouraging update from geologic and engineering consulting firm Tetra Tech Canada Inc. for their San Roque property: 32,891,400 metric tons of 1.42-grams-per-tonne gold equivalent, plus an estimated silver content of 12,770,600 troy ounces.
Even in the midst of an imminent precious metal shortage, Marifil Mines is preparing to drill for tons of premium-grade gold, silver, and other metals. This will incentivize investors to hold their Marifil Mines shares for years as the dollar deteriorates and the gold price surges relentlessly upwards. I suggest that you buy the shares before this happens, and look for MFM shares to go vertical while the dollar gets cheaper – it’s been years in the making, and now’s the time to take action.
Chief Editor, CrushTheStreet.com
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. We have been compensated by Marifil Mines two hundred thousand dollars for a one year agreement. We currently own shares purchased through their most recent private placement. We will never sell any shares during any active email marketing campaigns. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.
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