When Golden Opportunities Knock - And It Is Time To Open The Door
Update from the Allan Barry Reports
Brought to you by Advance Gold (AAX.V)
It was an interesting week with the largest player in the market, China, closed for business. With the whole country off to celebrate the Chinese New Year. Usually, this week is a soft period for the price of gold, it was again, but, gold still showed relative strength during the week and finished the week on a positive note.
Before I discuss other important bullish points for the price of gold, I have a couple points on how to find my work. The best source to find all my work is on the website for the Allan Barry Reports.
On the website you can find all my past reports, and an email sign-up form. The first people that receive my reports are those on the email list, so, sign-up if you would like to be first to receive all reports. There is no charge to receive the reports.
I’m always trying to grow my audience, you can help me a couple ways. One, is to share my reports to your contacts that follow the market. Secondly, if your friends would like to receive the reports first, encourage them to sign-up for the email list. I’m always promoting the industry and mining related companies, this is a great way for you to help promote my work to help me grow the audience.
All right, back to business. The relative strength this week in gold, while the Chinese were off celebrating Chinese New Year, was very encouraging. We also got bullish commentary from the Federal Reserve for gold.
Well, they don’t exactly call it commentary on gold. But, gold and the US dollar (USD) move in opposite directions, their comments on interest rate policy directly impacts the USD and by extension, gold as well.
On Thursday, St. Louis Fed President James Bullard, said that the Fed’s current stance on interest rate policy is slightly restrictive. Whenever trying to decipher Fedspeak, it always helps to put things in context.
James Bullard has been considered dovish since 2016, and considering last months no rate increase and the Fed’s comments, it looks like the rest of the Fed are getting more dovish on rates as well. I would argue interest rate increases are on hold for the foreseeable future.
They had been on a run of raising interest rates, and even though they said they were data dependant, it looked like they were much more focused on normalizing interest rates. Whatever normalized rates is considered these days. They wanted to have some ammunition in case of an economic slowdown.
They really were playing with fire, considering national and household debt is higher than annual economic growth. With that big pile of debt, it doesn’t take a big mistake on the tightening, to cause an economic slowdown.
Some of the economic numbers over the last few months have been showing they were pushing the envelope. Especially with the Trump administration fighting a trade war with its largest trading partner, China.
It is understandable that the Fed wants some powder dry in case they need to combat an economic slowdown, but, they don’t want to be the one to start that fire. Especially when the guy in the White House, is holding a burning match with his tariffs with large trading partners and an all out trade war with China.
With Trump in the White House, calling himself “Tariff Man” like it is a badge of honour is a troublesome situation. Plus, he is pushing to build a wall between America and Mexico and threatening to shut the border down completely if he doesn’t get his way, adds to the worries. Mexico is another big trading partner and the economy would be crippled if he shut down the border.
Somebody has to be the adult in the room, it looks like the Fed has realized they better stop with the interest rate hikes with debt so high and growing rapidly. While at the same time Trump is waving the “Tariff Man” sword around like he just doesn’t care.
Trump’s tax cuts, without any cuts on the big expenses has driven the deficit up to the trillion dollar mark. It doesn’t seem to dawn on a lot of economists, politicians or the White House, that the last time deficits were this high was in the early days of the Obama administration just after the 2008 economic collapse.
This has to be weighing on the Fed’s decision to stop raising rates. It is one thing to run up sky high deficits when dealing with the worst economic collapse since the Not So Great Depression. But, an entirely different matter for the deficits to be so high during an economic expansion that has been going on for several years.
For those that have been following my reports over the years know that I’m no fan of the Fed. In fact, I have often thought they have overdone it in rate increases or lowering. So, I have another reason to be pissed at Trump for making me agree with the Fed.
I even have to point out that, Trump had been saying the Fed should stop raising rates. Which was making me angry with the Fed for making me have to agree with Trump. Now, it seems like we are all on the same page, the Fed looks like they are done raising rates.
This is such a huge issue for me and anybody following gold and other commodities because where the USD goes, gold, silver, copper and other commodities I’m bullish on go the other direction. Commodities are priced in USD and the most watched quotation of prices on them is how they are priced in USD.
Where interest rates go, so goes the USD, when they are rising, the USD goes up, and when they stop rising and then are lowered, the USD is under pressure. This pressure is very good for the price of gold and other commodities. We could see in the trend for the price of gold since late 2018, that the market was getting the sense the Fed’s policy was about to change.
Since it has changed, the USD has topped, and gold has gotten significantly stronger. This has added wind to the sails of gold stocks, from the largest to the small exploration juniors.
In recent reports, I wrote about bullish technical indicators on the gold chart. One of those was the cup and handle trend from April 2018, until January 2019. Another crucial indicator I follow is, as we came up the bullish side of the cup, gold also had a Golden Cross with the 50-day moving average breaking through the 200-day moving average. At the same time of the handle forming on the cup trend, we had the Golden Cross and gold broke out aggressively to the upside.
While these trends were coming together for gold, USD hit a top and started to roll over. Now, it is getting close to a Death Cross, which combined with the change in Fed policy, should send it down. Doing the opposite of when gold went through the the Golden Cross, the Death Cross for the USD will likely be as powerful of a move to the downside. Look out below time for the USD is here.
Some are starting to talk about the next move by the Fed being an interest rate drop. I still think it will be awhile before the Fed is lowering rates, although I agree their next move will be to lower rates. The current economic expansion is long in the tooth, debt is now higher than economic growth and there is a loose cannon with “Tariff Man” in the White House.
With the clouds looking dark and gloomy for the USD, it looks like blue skies ahead for the price of gold. With plenty of room to go higher and bring other commodities along for the ride.
Another big trend that I’ve been writing about is how cheap the valuations are for gold stocks. From the biggest to the smallest, they had been pounded into oblivion. One of my friends said it was like a nuclear winter, I had to agree. But, I also added that people are starting to see a light around the corner and not afraid it will be a train running into them.
People are starting to open and read my reports again, my phone is starting to ring again, it has been a refreshing change. The doom and gloom for gold stocks is starting to lift. Best of all, picks are starting to react to the upside after they put out good news.
For a long time, good news for the gold stocks was a reason to hope for liquidity that investors used to sell into. Things got so brutal for valuations, that they were back down to levels that I hadn’t seen since the late 1990s to the year 2000, just before the great gold bull market of 2001-2011 got underway.
As the sentiment has started to shift for gold and the gold stocks, I could sense the change and started to crank up my reporting again, in October 2018. I mean I love writing and discussing the sector, but, I hate it when nobody is listening and it is like I’m talking to myself.
Sure one has to be careful picking stocks, following the truth machine for good drill results and paying serious attention to valuations. I’ve been having no problem finding quality drill results and cheap valuations.
I still think it is a stock pickers market and we are a long way from the tide lifting all of the gold stock boats. The change in the tide has definitely been rewarding for several of the picks in the report.
Investors in the space need to be diligent about staying away from heavily diluted stocks, even if they have good results. The weight of the anchor of those diluted stocks suffering from so much overhang, turns it into everhang, that should be avoided like the plague.
On the other hand, hunting selectively, with a rifle not a shotgun, for solid potential to valuation setups is paying off. I see it continuing to reward those taking advantage of the bargains.
Alright, now that we have set the stage for a bullish argument for gold and gold stocks, and you are ready to call your brokers to fill up your boots with top notch gold stocks. Let’s get into updates on picks in the reports.
When Golden Opportunities Knock - And It Is Time To Open The Door
Timing is everything when it comes to investing in any sector. As I described earlier in this report, and in recent reports, the times they are a changin for gold and gold stocks.
I’m also very bullish on silver, copper and some other commodities, but, when it comes to silver stocks they aren’t easy to find. The other commodities I don’t think the timing is as good as it is in gold.
When it comes to metals price trends, especially the big moves, gold is always a leader. It has been leading of late and I have been even more bullish on gold stocks.
Especially the ones with solid potential to valuations setups. Plenty of the picks are showing the strategy to buy cheap gold stocks over gold itself has been paying off and will continue.
To make it easier for folks to compare, when I give updates for the picks below, I will also include the date and price they were when picked and the closing price on Friday.
Updates are starting with the most recent. If you would like to read the past coverage from the original pick and subsequent updates, please visit the Allan Barry Reports website.
VR Resources (VRR.V)
Date picked: Feb.5/2019
Date picked closing price: $0.18
Friday closing price: $0.21
VR Resources is a brand new pick of just a few days ago, nothing more to add at this point. I picked them as I like the region, Nevada is a great jurisdiction, and the team involved.
Walker River Resources (WRR.V)
Date picked: Jan. 30/2019
Date picked closing price: $0.11
Friday closing price: $0.10
Walker River Resources is a Nevada company, that reported high-grade gold results from early exploration. They have large zones to explore and have pending results that should be out shortly. I own shares in the company at an average price just over 11 cents.
Viva Gold Corp. (VAU.V)
Date picked: Jan. 29/2019
Date picked closing price: $0.17
Friday closing price: $0.185
Viva Gold has a high-grade gold project in Nevada, with the intersections fairly close to surface. They have more holes pending and a tight share structure, giving them a reasonable valuation and plenty of catalysts to move the valuation higher.
Newrange Gold (NRG.V)
Date picked: Jan. 28/2019
Date picked closing price: $0.195
Friday closing price: $0.19
Newrange announced results from twinning a reverse circulation hole with core drilling that came back with significantly higher grades. They proved that they are losing gold with the reverse circulation drilling. They have more holes pending to further test this concept. Those results will be out soon and I think it will cause them to switch to core drilling in future drilling and increase the gold grades.
Westhaven Ventures (WHN.V)
Date picked: Oct. 20/2018
Date picked closing price: $0.73
Friday closing price: $0.83
Westhaven is a new discovery play in south BC, near roads and infrastructure, they have found high-grade gold in an epithermal vein system. Recent work has been geophysical work to further understand the known veins and look for more. They are also cranking up the drilling, so, they will have a strong flow of news in the coming weeks and months.
Amex Exploration (AMX.V)
Date picked: Jan. 27/2019
Date picked closing price: $0.58
Friday closing price: $0.71
Amex caught my attention with their bonanza grade gold results from drilling on their high-grade zone. They followed that up with additional high-grade that showed from top to bottom drilling into the zone has hit bonanza grades of gold. Another pending hole was a 25 metres step out that encountered visible gold.
Great Bear Resources (GBR.V)
Date picked: Dec. 17/2018
Date picked closing price: $2.01
Date picked: Jan. 21/2019
Date picked closing price: $2.59
Friday closing price: $3.68
Great Bear is on fire, this week they hit an all time high, and it is all due to the drilling results from their Dixie Lake project in the Red Lake mining district. The project is just off the main road going into Red Lake, it can be drilled year round, they are currently drilling and financed to drill aggressively all year. I’m expecting to see them put out more news shortly, possibly early next week is my guesstimate. I also expect them to have a strong news flow throughout 2019.
Advance Gold Corp. (AAX.V)
Advance Gold is the company where I’m the President/CEO, therefore I will leave them without a date picked and prices as I talk about the company regularly in the reports. We are only 7 drill holes into the discovery of a cluster of epithermal veins, in a region of Mexico where 10% of all the silver ever produced worldwide has comes from mining epithermal veins. We just announced a private placement to fund an upcoming drilling program. The goal of the drilling will be twofold. One will be to test the near surface oxide zone where a 12 metre intersection of a vein was hit and could be a place with potential for near term production as the project has a mining permit. Secondly, we will drill deeper into the epithermal vein system as all but one of the veins hit were blind, suggesting we are at the top of the system and need to drill deeper to hit the boiling point of the system.
Sokoman Iron Corp. (SIC)
Date picked: Oct. 8/2019
Date picked closing price: $0.20
Friday closing price: $0.125
Sokoman made a new discovery of high-grade gold, in Newfoundland, during the second half of 2019. The project is right beside a highway, so it has great access that gives them the ability to drill year round. Recent results disappointed the market, but, it also gave them more information on how to drill the high-grade discovery on their project. They have started drilling to target the high-grade and are awaiting ice to build on the lake covering the discovery zone. Once they can drill from the ice, which should be shortly, they will be able to roll their sleeves up and seriously go after the high-grade zone.
Minaurum Resources (MGG.V)
Date picked: Oct. 28/2018
Date picked closing price: $0.465
Date picked: Dec. 17/2018
Date picked closing price: $0.45
Friday closing price: $0.46
Minaurum is a Mexico precious metals company with a cluster of epithermal veins, in Mexico, at their Alamos project, that hit high-grade. Peter Megaw is one of the key people involved. He is the geologist responsible for MAG Silver’s high-grade silver discovery in Mexico. When the mine goes into production, it will make MAG Silver one of the lowest cost producers of silver in the silver mining sector. Needless to say, Peter Megaw is a serious minefinder and it looks like he has the chance to do it again with Minaurum.
Equinox Gold Mines (EQX.V)
Date picked: Oct. 28/2018
Date picked closing price: $1.00
Date picked: Dec. 17/2018
Date picked closing price: $0.95
Friday closing price: $1.13
Equinox is a Ross Beaty company that he has focused on becoming a large gold producer, to take advantage of the upcoming bull market in gold he sees coming. They are a miner already, with a plan to buy and put more mines into production. This one is a core holding for folks that want exposure to gold mining stocks.
Premier Gold Mines (PG.T)
Date picked: Dec. 17/2018
Date picked closing price: $1.56
Friday closing price: $1.78
Premier Gold is a gold focused company that I’ve followed for many years. They are a former member of my website sponsorship program, which I’ve reported on them as they have grown from an explorer into a producer. They have an impressive pipeline of projects in Mexico, Nevada and Ontario from exploration to production. Including partnerships with several major mining companies. They are a very well run company that can grow with their cheque book buying mines that they add value with drilling or straight exploration. They are a core holding for anybody interested in gold stocks that will likely easily outperform gold in the upcoming gold bull market.
When I started cranking up my reporting in early October 2018, I had the feeling that the market was way too bearish for gold. And that the juniors were too pummeled to stay down for much longer. During the past four months, the reports have been all over the change in the trend for gold, and the improving action in the gold stocks.
Valuations on the gold stocks, from the biggest to smallest are at cheap valuations, and starting to improve. This is a seminal turn in the sector that I think we will look back, years from now, and see how close it was to the early days of the 2001-2011 gold bull market.
I’m finding lots of companies with excellent potential to valuation setups and expect to see strong moves ahead for them. I have more picks coming, I’m working on some website sponsorships that will help me bring more reports and interviews.
Stay tuned, there is serious action ahead for gold, silver and the stocks focused on these metals heading to go into overdrive. I plan to lead the pack in reporting on the sector, and in quality of picks.
Don’t forget to visit the website, share the reports, join the email list if you aren’t already. And encourage others that are interested in the markets and stocks I follow to join as well. Help me help you and you help me.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.