Dear Reader,

Two weeks ago, we warned readers that various indicators were signaling a near-term market crash in mainstream equities. We warned that if it happened, even gold could get whacked briefly due to the resulting liquidity squeeze. That’s not what’s happened—yet.

However, gold melted down significantly last week anyway, falling even lower than last December’s low, bringing it all the way back to prices not seen since 2010.

So did we get everything wrong?

Perhaps, but that remains to be seen. Upbeat Fed statements and encouraging US GDP numbers conveniently appearing the week before a mid-term election don’t persuade me that our wise politicians and their appointees have saved the global economy and everything is fine now. Our technical friends and other analysts we respect still say mainstream markets look poised for a fall.

Marin Katusa’s new book, The Colder War, tells us that Putin would love to play the role suggested by Nietzsche, pushing Western economies into a crash—not just because objects on the verge of falling deserve to be pushed, but because it advances the agenda he’s been pursuing relentlessly for decades.

Still, we understand how nerve-racking it can be when markets don’t go the way we want them to. It’s no surprise that many readers have written in with questions about our gold-centric investment strategy. Jeff Clark has boiled these down to a few main concerns, which he tackles in his Q&A article below.

I hope nervous readers find Jeff’s answers persuasive, because this is a time when it would be easy to panic and make the wrong moves—particularly realizing losses on good companies that have what it takes to pull through.

As we’ve said many times, when it comes to investing in the resource sector, one is either a contrarian or one becomes road kill, and this takes great courage and discipline.

Those attributes are being tested—and may be tested even more sorely if a broader market crash takes metals prices even lower.

That would, of course, be a spectacular buying opportunity, precisely because so few people will take it. Easy to say, tough to do, and not the first time we’ve said it. But that doesn’t make it any less true.


Louis James
Senior Metals Investment Strategist
Casey Research

Rock & Stock Stats
One Month Ago
One Year Ago
Gold 1,172.95 1,211.60 1,323.70
Gold (SGE) 1,172.56 1,232.03 1,354.43
Silver 16.16 17.06 21.87
Copper 3.08 3.01 3.30
Oil 80.54 91.16 96.38
Gold Producers (GDX) 17.21 21.36 25.10
Gold Junior Stocks (GDXJ) 24.47 33.62 37.58
Silver Stocks (SIL) 8.68 10.64 12.91
TSX (Toronto Stock Exchange) 14,613.32 14,960.51 13,361.26
TSX Venture 769.59 909.29 958.86