Ronald Stoeferle: Gold Is Dirt Cheap Right Now

Authored by Adam Taggart via PeakProsperity,com,

...and a new bull market for the metal is beginning.

Fresh from releasing his exhaustive 230-page annual report titled In Gold We Trust, Ronald Stoerferle joins us to summarize his forecast for the yellow metal.

Stoerferle, an author of several books on Austrian economics and head of strategy and portofolio management at Incrementum AG, concludes that gold is extremely cheap right now in dollar terms. And he sees a new bull market beginning for the precious metal -- one likely to quickly build momentum as the next (and long overdue) financial market correction arrives.

We're at the beginning of a new stage of a bull market.

We've seen a massive correction with a big drawdown, but we're now seeing the Commitment of Traders report suggesting that there's been a washout. We're seeing that sentiment is really negative. We're seeing that nobody really cares about gold and mining stocks, and especially about silver. Silver is probably the biggest contrarian investment, though silver mining stocks are probably even more contrarian at the moment.

We all know that the herd behavior in the sector is getting more extreme. I think it has got to do with career risk in the financial industry, so nobody really wants to make a contrarian call. But once we go above this $1,360-$1,380 resistance, which is also the neckline of a large inverse head & shoulder formation, I think gold will hit $1,500, $1,600 pretty quickly.

The most important thing is: in comparison to all the monetary printing that we've seen in the last couple of years, gold got significantly cheaper. Gold, in monetary terms, is dirt cheap at the moment. We're basically at the same levels like in 1971 when it comes to the gold backing of the US dollar. So gold is a bargain at this level.

Of course, we need some sort of catalyst. I think one of the main catalysts will probably be recession fears coming up and the greater volatility in equity markets that's going to go hand in hand. And we’ll see it sooner or later.

We should not forget that stocks have been trading at or close to the all-time highs, that real estate has been doing really well, that bond markets have been doing well, that cryptocurrencies have been kind of stealing the show, that people regained trust in the financial system, in banks, and even in politicians. Inflation is not a big concern at the moment. We're seeing rising rates and so on. Let's face it: those things are not an extremely positive environment for gold. But still, it's been doing pretty well.

If those headwinds become tailwinds, meaning that there will be some volatility kicking in in equity markets, that the bond markets start cracking, that people start losing trust in the system again -- early indications of which it looks like we may be seeing here in 2018 -- that's going to be the point in time when gold will pick up momentum big time.

And the other big thing is that the whole world is increasingly trying to diversify out of the US dollar. We're coming to a multipolar currency system sooner or later. That's a long process. This year we've seen the introduction of the oil futures in Shanghai -- that's a really big development -- volumes are enormous in Shanghai. Nobody would have expected that. And that's just another nail in the coffin of the US dollar.

And, of course, all those countries that are trying to avoid the US dollar in their trade, they are big holders of gold. So I think within the course of the next crisis, I think there's might chance of a revaluation of gold.

Click the play button below to listen to Chris' interview with Ronald Stoeferle (49m:22s).

Comments

Baron von Bud 0valueleft Tue, 06/12/2018 - 23:54 Permalink

One of two things will happen. 1) Global reset or the 2)US Inflates.
Real rates are negative. The Fed is raising rates into a rising inflation cpi. They need 4% inflation at a -2% real yield spread. They depreciate debts at 4% and debase the currency at 2%/yr. I don't know if gold is going way up but I think it's pretty safe to hold right now. This is fiscal and monetary stimulus together and it can't end or the world goes down. The Global Reset requires global cooperation. Maybe the G7/Canada unhappy attendee photos are meant to mislead us and they're all secretly re-configuring the world economy together. America's corrupt media means we can't believe what they're telling us. Thus I give this dual scenario a cowardly 50/50.

In reply to by 0valueleft

RAT005 Baron von Bud Wed, 06/13/2018 - 01:03 Permalink

Bitcoiners, imagine you are in Venezuela and all you own is a productive apple tree. Often you can trade apples for eggs and gasoline but sometimes all a person has is a token. Do you feel safer to take a gold token or a Bitcoin token that you will then trade with someone for something useful? Maybe half the people will trust Bitcoin, but don't you think that half and the other half will trust gold?

In reply to by Baron von Bud

Golden Phoenix RAT005 Wed, 06/13/2018 - 03:32 Permalink

How does a Venezuelan with no cash get gold?

Does he use the free local power to plug in a gold making machine?

Or does he plug in some computers and mine Bitcoin?

Then sell for gold if he chooses to?

It's not about protecting what they have because that's already gone. 

It's about them making enough of something not to starve to death.

In reply to by RAT005

J S Bach Coinista Tue, 06/12/2018 - 22:58 Permalink

I wonder, Coinista, if those wise investors and believers in tulips centuries ago thought the same way.   I guess we'll never know. 🤔

Well... what we DO know is that gold survived and held its worth against all fiat crazes of the past.  We "bugs" (as the naive colts like to call the stallions) don't claim to have crystal balls.  What we do have is a sense and understanding of history and human nature... some might call that wisdom. Remember that what you perceive in your brief lifetime is not all that has ever transpired.  There is much to be gleaned if you have the courage to research and learn.  Gold and silver will ALWAYS be money - despite your avaricious fantasies of crypto currencies.

In reply to by Coinista

Mementoil Coinista Wed, 06/13/2018 - 00:52 Permalink

Have you stopped to consider, oh great promoter of science, that as a naturally non-tarnishing and highly conductive metal, gold is vital in order to construct all those computers and servers needed to realize your vision of a global digital currency?

Crypto cannot expand without gold, physically speaking. So how could it possibly be "worthless"?

In reply to by Coinista

bombdog Coinista Wed, 06/13/2018 - 04:25 Permalink

The science of human preferences and choices is not the kind of science that you perhaps believe it to be. If the short history of digital information is any guide; being infinitely reproducible its value rapidly tends towards zero. Some folks used mathematics and called some tiny bits of this vast landscape of information "coins". So far so good... but I can't help noticing the HODLers must be getting nervous.

In reply to by Coinista

Nature_Boy_Wooooo LetThemEatRand Tue, 06/12/2018 - 22:50 Permalink

I'm talking about goldbugs thinking that raising ships full of sunken gold is a good thing.

 

It's comparable to alchemist hoping to find a way to make gold in a lab.

 
 

Gold basically only has value nowadays because it used to have a use, nobody uses it for anything other than a store of value or a way to show off your wealth. No way gold holds it's value over the next 20 years with the world heading into  a tech era.

 

I know this is the hardest thing for goldbugs to accept since the calculator replaced beans.

In reply to by LetThemEatRand

Nature_Boy_Wooooo BandGap Tue, 06/12/2018 - 23:04 Permalink

Right.....and smart people buy real estate also because the price always goes up.

 

Gold commercials on Fox news because they are trying to make sure all of the smart people watching Hannity get in on it.

 

Every gold article at Zerohedge has a link to a subscription service at the bottom of the page from some deadbeat selling gold who will also sell you a guaranteed 5 star dead lock winner on tonight's MLB card.

 

Yeah.......maybe smart people smarter than me are buying gold because that's what the smartest of the smart people do when they are busy being smarter than less smarter people.

In reply to by BandGap

WHATDIFFERENCE… Nature_Boy_Wooooo Wed, 06/13/2018 - 00:26 Permalink

Actually, the really really really smart people are stuffing their vaults with metals. And yes that techno world you claim on the horizon needs all those metals too. I learned three stock market crashes ago that in order to stay ahead "do as they do not as they say." My portfolio has since remained in tact and will do so when they "pull it."

 

In reply to by Nature_Boy_Wooooo

LetThemEatRand Nature_Boy_Wooooo Tue, 06/12/2018 - 22:59 Permalink

Gold can sit on the bottom of the ocean for a thousand years and still be the same.  40 years ago, the internet did not exist.  Do you really think you can predict that 40 years from now BTC will still be the "big thing" in technology?   Or blockchain for that matter?  I can reliably predict that gold that has been sitting on the ocean floor for 1000 years will be the same 40 years from now.

In reply to by Nature_Boy_Wooooo

LetThemEatRand Nature_Boy_Wooooo Wed, 06/13/2018 - 00:03 Permalink

Digital clocks were expensive when they first came out.

Crypto cannot make the physical connections inside computers that make computers and crypto work.  Young people have a tendency to see things in terms of years instead of decades.    It's okay, though, youth is more valuable than gold or crypto so enjoy it.  Us old folks would trade our gold for it.  But there is also a reason for the old saying "youth is wasted on the young."

In reply to by Nature_Boy_Wooooo