If you’ve been reading Exponential Investor over the last week or so, you’ll know that I have taken an interest in gold.
This is because I was allowed early access to research that Eoin Treacy has been doing into the gold market.
In his own words:
“My research tells me that something very interesting and shocking could be about to happen to the gold price. I’ve seen similar conditions in the gold market before, and I made my clients a small fortune from it.
“But what’s happening now is on a much bigger scale…”
If you’re not aware of Eoin’s history, he made his name spotting events like this and trading on them. In fact, he called the top of the last gold market and those that followed his lead would have made a fortune.
He is so good at timing the markets, in fact, that he is now trusted to manage over $600 million and is flown all around the world to share his knowledge with select groups of traders.
So, when he gets this excited about something, I tend to listen. And the fact that this is happening in the gold market, not the stockmarket, has me even more intrigued.
Personally, I am not a gold investor. At least not yet. It’s always something that has interested me, but I’ve never felt I knew enough about it to get started.
So I’ve decided to ask Eoin 10 questions about gold investing, what its main benefits are, and why he is so excited about the gold price right now.
If you’re like me, and have an interest but not enough knowledge, it should be very useful.
And if you’re already a full-fledged gold investor, I think you’ll be particularly interested in Eoin’s response to question nine: “What has happened to the gold price that pushed you to hold this summit?”
You can find my 10 questions, and Eoin’s answers below.
And if you want to take part in Eoin’s gold summit, all you need to do is get your name down here now.
Registration is free, for now. But soon the price to watch Eoin and six of the world’s top gold insiders will be £500. The five-day online summit starts on Wednesday 27 February. It’s already creating a huge buzz in gold circles. So do make sure to claim your all access online viewing pass as soon as you can.
Now, on with the gold grilling…
- What is the main benefit to investing in gold?
It’s uncorrelated. Gold is very much its own asset class that does not march to the beat of the drum governments or what the international community focus on. That is a particularly useful attribute because one of the clearest results of the era of quantitative easing has been the fact that asset prices have all tended to rise and fall together. That’s a big problem when you get a year like 2018 when everything went down together. Gold is therefore the ultimate hedge against not only the worst excesses of government but that of central banks.
- Is it difficult to invest in gold?
Not at all. Gold is the original investment vehicle so there are a wide range of available options. You can buy everything from jewellery to coins, bars, exchange-traded funds (ETFs), funds and miners. I will be focusing on the most cost-efficient ways of owning gold and how to develop investment leverage to the rising price which will require a brokerage account. In other words, I’ll be looking to amplify gold gains. In Episode #3 of The 2019 Gold Summit, I’ll share my #1 gold play with viewers.
- How much of their portfolio do you recommend people dedicate to gold, and why?
Historically, Swiss private bankers recommended about 10% of one’s portfolio should be in gold. I think that is a reasonable figure in a rising price environment because it provides diversification as well as acting as an insurance policy against financial crises in the wider world.
- Is it true that gold can do well even when the stockmarket crashes?
Yes, that is true but it is also worth remembering that it will not be immune from volatility. If lots of people have 10% of their portfolio in gold and the stockmarket goes down a lot, they may be forced to sell some of their gold to cover losses in other parts of their portfolios. That is just how crises evolve. However, the stronger assets are those that bounce first after a crisis and gold would be a major beneficiary of bargain hunting in that kind of scenario. And as I said in my first answer, gold is “unplugged” from the flawed financial system.
- What about gold stocks and gold ETFs, do they carry the same benefits as holding physical gold?
Holding physical gold means your asset will appreciate in line with the price of the metal but your will incur storage costs and/or the risk of theft. Investing in mining shares is riskier but they do offer the opportunity to benefit from leverage to the gold price and will often outperform gold by multiples. ETFs are funds that hold gold or gold futures. It is important to be very clear on whether the ETF you hold does in fact have allocated gold bars in its possession. If it does not then you are at risk if the sponsoring bank goes under.
- Can you ever make a big profit investing in gold, or is it more of a “safe haven”?
The one thing that gets people most excited about gold is not that it is a safe haven. You could buy an insurance policy that would give you some protection. The reason people like gold is because when it moves it really moves a lot. It tends to be a great store of value but its price is volatile and that means when it advances, it can really move a lot. So, yes, it is very possible to make a lot of money from gold. That’s what I’d like to show people in the summit. Gold is not just a buy and hold forever asset for me. There are ways to maximise the gold price move.
- Why don’t you hear about gold investments as much as stocks and shares?
The gold market is a niche investment but more important that that is the fact that gold does not have a cash flow so it does not submit readily to the dividend discount model of financial analysis. That pretty much precludes the conventional financial community from valuing gold. It is also a relatively scarce commodity with limited supply so there are a limited number of options for big financial institutions to express a view which keeps it a relatively small market compared to stocks, bonds or currencies.
- There is a lot of uncertainty over Brexit at the moment, is this good or bad for gold investors?
Uncertainty in the political sphere is good for gold. There is no equivocation on that point. It is the ultimate hedge against political turmoil.
- What has happened to the gold price that pushed you to hold this summit?
What many people fail to understand is that the financial markets are discounting mechanisms for what investors believe on aggregate the future will hold. Today bond prices are rallying because investors believe the central banks of the world are done with raising rates. We see populist movements popping up all over the world and they are all intent on spending money they don’t have.
This has led to the price of gold advancing in an increasingly large number of currencies. When that happens it is a clear sign governments are getting ready to debase their currencies and that makes owning gold now an urgent priority.
I am reminded of the question “When did Noah build the ark?” Before it started raining! You can be a year or two early with your gold investments and not regret it. But if you’re too late you’ll kick yourself!
- Where and when does your gold summit take place, and is it free to watch?
It’s a five-day summit. And it start’s on Wednesday 27 February. We will release one episode a day and give you 24 hours to watch each one. That way you won’t miss a thing. For a limited time, access is free (click here to register for free now).
I have flown in the top insiders and investors in the gold market to show everyone watching why the time is now to move into gold. The speakers are going to explain why gold could soon be the most important investment in the world for millions of people. That could cause a huge surge in demand – and price. And it’s my job to show you how to take maximum possible financial advantage.
And just in, I have two bonus questions from readers that Eoin has agreed to answer as well
- Are gold royalty companies likely to be better than mining stocks?
When I moved to the US five years ago we started looking at businesses to buy and I really tried to convince my wife to buy a pawn broker because it was the clearest way to buy gold at a discount to spot. That’s effectively what royalty streamers do so they do offer attractive qualities if production at their holdings rises with the gold price. Leverage to the gold price is delivered by controlling costs while boosting supply. It’s a difficult prospect, which is why mining and streamer shares are volatile.
- Are pure gold mining plays better than say miners who also mine other precious metals?
Gold is never really found on its own so there are always going to be other metals mixed in. We will of course be focusing on primary gold producers because that is the biggest most liquid market. Silver is directly related to gold as a monetary metal or “poor man’s gold”. Platinum and palladium are much more industrial than monetary metals and therefore perform differently at various times in the cycle.
Will there be an impact on the price of silver and other precious metals if the price of gold rises? Silver is high beta gold, it is a much less liquid market and is also a by-product of gold mining. That means they tend to do better at different times in the cycle. We will certainly also be investing in silver mines because of the potential for upside they represent.
I hope you got as much out of Eoin’s answers to these questions as I did.
But remember, this is just the tip of the iceberg. The main event gets started on Wednesday. So get your name down and secure your free online viewing pass.
You should know that everyone who signs up before the event receives an exclusive Summit Primer Pack, containing exclusive reports, guides and videos worth more than £200.
It’s a no-brainer for anyone keen to tap into the power of gold.
Make sure you get you name down for it here.
Until next time,
Editor, Exponential Investor
PS It’s not just us who are excited about The 2019 Gold Summit, some of the best investors I know are sending in messages about it:
“The fuse is running down fast on the next global financial calamity. If you can’t see that, then you just aren’t looking close enough. That means investors will soon start doing what they’ve always done in a panic – turn to gold. To stay ahead of the mania, grab your ticket. I’ll be watching – and so should anyone who cares about their money.”
New York Times best-selling financial author, Bill Bonner
Claim your free pass here.
“This could be the most important conference about gold you ever attend. I’ve been going to meetings about gold for twenty years (some tiny, some very large). But none with the calibre of presenters Southbank Investment Research has lined up for this gold summit.
If you want to know why gold still matters to the world’s financial system and what it role it will play in the future – plus how you need to position yourself for maximum safety AND profit – sign up for the summit. Run. Don’t walk.”
Dan Denning, gold investor and author of The Bull Hunter
“This summit is essential viewing for anyone who is serious about protecting and growing their personal wealth in the face of historic political and financial upheaval. At a time of massive global indebtedness, the prospect of inflation has to be a serious concern. Gold is the natural and time-honoured response to that concern. ”
Defensive Investor of the Year winner and £150m wealth manager, Tim Price
Claim your £200 Summit Primer Pack and free online ticket.