What if gold crashes to $3,000 per ounce?

A little over a month ago, in early September, after careful analysis and detailed study, my team and I reached an important conclusion. And we started telling our audience almost immediately.

Gold had just crossed $3,500 per ounce, silver had just crossed $40, and many gold and silver mining companies had experienced astonishing gains.

Of course none of this came as a surprise to our readers. We’ve been saying for the past few years that gold in particular was going to go much higher, specifically because foreign governments and central banks were buying up gold by the metric ton as a way to diversify their strategic reserves away from the US dollar.

That extra demand from central banks totaling a few hundred billion dollars sent gold prices rocketing higher. And we also said this trend would continue.

Similarly over the past couple of years, as we were predicting higher gold and silver prices, we also predicted that mining companies would benefit, and generate record revenues and record profits as a result.

At the time those mining companies had been left for dead in financial markets, with share prices so cheap they were practically being given away.

We told our audience over and over again in print and in our podcasts that this wouldn’t last, and that mining companies would surge in value.

And that’s exactly what happened. In fact, many of the companies we featured in our premium investment research are up 3x, 4x, 5x, even 6x this year alone.

But early last month we realized there was another near term catalyst that would likely send these companies’ share prices even higher. These businesses are all publicly traded, and so they have to report their earnings, usually every quarter.

Q1 earnings were great. Q2 earnings were fantastic. But we realized that gold and silver had been rising so quickly, that Q3 earnings—which would be reported sometime in October—would just be out of this world.

We did the math and crunched the numbers ourselves, and based on our analysis, even companies that had risen 4 or 5x were still undervalued based on projected Q3 earnings.

And we anticipated that for many of these companies, their share prices would jump after their Q3 earnings were announced.

The first of those companies reported its earnings earlier this week, and we were absolutely right. Its record profit dazzled investors, and its share price jumped nearly 20% in a day.

It’s also up almost 52% since we made this prediction a month ago.

We’ve also done the math to see what would happen to these businesses if there were a sudden drop in precious metals prices.

Well, to give you an example one of the companies we featured in our investment research, which is up more than 5x, would still be incredibly undervalued.

Based on our analysis, even if gold were to drop below $3,000—roughly 30% from here—that company would still be making money hand over fist, and based on its current share price, still trading at around 5.5x earnings.

Oh, and did I mention they pay a substantial dividend?

It’s not that every mining company is in the same boat. There are thousands of companies out there, and many are just terrible businesses with pitiful management and terrible balance sheets.

But if you’re willing to do the hard work and find the highest quality management, and the most pristine balance sheets, there are still undervalued gems out there.

This is what we focus on in our premium investment research.

And we believe that many of them could see similar upside over the next few weeks as they report bonanza Q3 earnings.

If you want to learn more about our premium investment research and all the high quality real asset companies that we feature, we’re offering a limited time promotional discount of 40%. Click here to learn more.

Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/what-if-gold-crashes-to-3000-per-ounce-153717/