Gold has been the comeback story of the investment year to date. After falling for 4 consecutive years from $1895 in 2011, it bottomed in mid-December 2015 at $1050. Of course back then analysts were on TV predicting $6-700 gold within a year. That did not happen. At the time of writing gold sits comfortably around the $1340 price level.

What I find particularly interesting is that this is happening at a time when the S&P 500 is making new all time highs. Over the past 4 years, gold fell time and time again when markets went up and vice versa. That pattern now appears to be broken.

Given that gold is up $300 over the past 7 months (roughly 30%), the companies that make a living mining the yellow metal are up anywhere from 100-400%! Goldminers are a leveraged play on the price of gold. Meaning a 10% move in the price of gold can lead to a 30% move or more in the value of a gold mining stock.

The reason for this is quite simple. Many gold-miners operate with razor thin margins. When the price of their product spikes whilst their extraction costs remain the same, their profits … TO READ ON SUBSCRIBE AND BECOME A PATREON.

  • Max

    What do you think about buy physical gold ?

    • Too vague a question. Can you elaborate?

      • Max

        Buy gold coins or bars and have them physically

        • Doing so doesn’t give you any interest or dividends. There’s also the problem of storage which will either cost or if you do it at home, leaves you exposed theft.

          I prefer mining ETFs over physical gold.

  • Cecil J

    Hey Harald
    What’s a recipie for location independence? Is affiliate marketing dead ? Would freelance work on something like ODesk be better now?

    • Hard work! All roads still open 😉 But it’s harder than holding down a normal job for sure.

  • disqus_q14bh9K8Yv

    Harald, thanks for sharing your analysis and creating content.

    What is your idea about investing in VanEck now, I read a notice that prices might drop more in december, but iam not sure that fits the total curve.

    What is your idea about investing today (since I saw your important point about getting in early)

    All the best! Have a great one

    • I assume you mean VanEck’s ETF GDXJ and not VanEck itself (which is what you actually wrote). I never like to buy something that has just trippled. I will make a deeper analysis of Gold miners though in my podcast.

      • disqus_q14bh9K8Yv

        Yes a slight misstake, you’re on point!

        Thank you, iam listening to your newest Pod right now =)

        It will be exciting to see what opportunies Trumps win brings.

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