“Gold will recover from its current malaise and hit a new record high in excess of $2,000 a troy ounce in 2012, according to an annual survey of industry predictions.”
— London Gold Bullion Association
For serious gold investors, the London Gold Bullion Association is like the Farmer’s Almanac of price forecasting.
Their annual report, published in the first week of January, pools together dozens of predictions from fund managers, analysts, brokers, and speculators to boil down a single unified number. For years, it’s proven to be a reliable oracle of things to come in the precious metals universe.
This year, the LGBA is putting per-ounce averages at $1,766, with lows touching $1,500 and highs exceeding the magical $2,000 mark — slightly underwhelming, given all the wild-eyed analysts calling for $5,000/ounce by winter and $10,000/ounce by 2014.
But don’t lose hope just yet… because getting rich from the gold market has never been a better possibility.
And it isn’t just a matter of catching that historic price explosion for a one-time, retirement-making cash-out…
In fact, if gold did hit $10,000/ounce anytime soon, you can be assured thoughts of retirement would be moot, as it will likely mean a general collapse of the dollar — and the global economy right along with it.
Thankfully, making a fortune off gold won’t require a worldwide calamity or a two-decade hold time while precious metals reach those historic highs by more controlled means.
The best investors out there — those who know the business inside and out — will be making triple-digit gains by the summertime.
And they’ll be doing it even if gold does exactly what the LGBA says it will, and only appreciates to $2,000 per ounce or slightly higher.
What I’m talking about has nothing to do with major changes in the gold market, but everything to do with the seasons.
Here’s what I mean…
As anyone who’s ever visited the Yukon Territories, watched the Discovery Channel series Goldrush, or tried to invade Russia knows all too well, when it comes to operating in sub-Arctic climates, there’s one element which trumps all others…
Weather.
In the far-northern latitudes where winter lasts for approximately half the year, everything happens according to a very predictable annual cycle.
It starts in November, quickly turning the ground to ice as the temperature falls to an average low of -22° Fahrenheit.
Combine low temperatures with an average snowfall of close to five feet, and you have the perfect scenario for frozen diesel engines, rock-hard earth, frostbitten limbs, total cut-off from supplies and support, and a general breakdown in any mining operations.
Of course, extreme weather is only half of the equation.
This is the part that makes it interesting…
Since the first Gold Rush of 1848, over $80 billion in bullion (at modern prices) has emerged from this region.
And with every dollar that the price grows today — with every dollar that the explorers and miners can tack onto their profit margins — more companies, conglomerates, and individual prospectors are returning to the industry which first tamed these territories over 150 years ago.
Today, hundreds of private operations and dozens of publicly-traded exploration and mining outfits are expanding activity in the Yukon.
The problem remains that every November, winter still puts an effective lock-down on every pick, shovel, drill, and set of hands at work in the field…
For publicly-traded companies, the results can look something like this:
Like clockwork, when production shuts down each winter, investors start to lose interest and walk away from the market to seek fortune elsewhere.
In turn, Yukon gold exploration and mining stocks start to stagnate… then decline… then collapse.
Today, more of them than ever go through this annual transition.
But it’s not a permanent collapse, because as soon as operations start back up — and the fertile Yukon soil begins giving up more and more of its estimated 39 million ounces of unharvested gold resources — the stocks awaken like a hibernating bear.
You see, the only event that could ever break this pattern would be a collapse in gold prices, something which no reputable authority on the matter expects to happen in the next two years.
The pros will time their buy-ins to coincide with the winter dips — and will be making 30%, 50%, even 100% each year, year after year, even if gold prices themselves plateau.
And if prices do rise (or skyrocket) as many claim they will… well, then the profits will be incalculable.
Only time will tell.
Here’s what you need to keep in mind right now:
As you read this, the Yukon Territory is pretty much at the peak of its frozen season.
Stocks have been moving slowly, some losing as much as half of their paper value since the production season came to a halt a few months back…
But by March, as sure as the rise of the sun and the tides of the moon, these stocks will come roaring back as the industry reawakens.
Yours in wealth,
Brian Hicks
President, Angel Publishing
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