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By Curzio ResearchSeptember 16, 2024

Gold is heading to $3,000

Investing in gold

The markets are eagerly awaiting this week’s Fed meeting… where it’s all but guaranteed the central bank will finally start cutting interest rates.

It remains to be seen exactly how much the Fed will lower rates—expectations call for either 25 or 50 basis points…

But either way, it’ll be incredibly bullish for one asset in particular…

Gold.

The yellow metal has been pushing higher for months… and a new, lower-rate environment will likely send it surging to new all-time highs. In fact, it could easily hit $3,000 within the next three to six months.

That’s great news for junior miners and other gold stocks.

Better yet, lower interest rates aren’t the only tailwind pushing the yellow metal higher…

Let’s take a look at why it’s time to get bullish on gold and gold stocks—and how to profit.

3 catalysts for gold stocks

1. Safe haven status

To start, gold doesn’t pay interest or dividends. In high-interest environments, investors tend to flock to interest-bearing assets. But now that rates will be heading lower, gold is becoming more attractive by comparison.

That’s particularly true as lower interest rates typically go hand in hand with a slower economy, a weaker dollar, and higher inflation. Gold is historically a reliable store of value during economic uncertainty… making it a beloved safe haven asset and a hedge against inflation and currency debasement. 

2. Government spending and debt

Government spending and debt are out of control… and that’s not poised to slow down anytime soon, regardless of who wins the presidential election in November.

The U.S. has over $35 trillion in debt, over $100 trillion in future obligations, and over $1 trillion in annual deficits.

That spells serious trouble for the economy, as it increases inflationary pressure and further devalues the dollar. (Not to mention, it enhances distrust in the government.)

But, as with any economic uncertainty, it’s good for gold as investors will seek the stability of the yellow metal.

3. A cash infusion for junior miners

Despite gold’s upward trajectory, junior miners have been out of favor over the past few years… But that’s already starting to change as investors look forward to lower interest rates.

One big reason for that: Lower rates make it easier for small companies to borrow money.

Many junior miners are small caps. That means they often don’t have the money to fund new operations—and higher interest rates make it much harder to raise capital. As a result, cash-strapped junior miners have been hurting for the last few years.

But now that rates are headed lower, the best junior miners will be able to start investing in growth again.

A ‘golden’ opportunity for investors

There are several ways for investors to profit from gold’s run higher…

Obviously, owning gold is always an option. You could also invest in a fund that follows gold’s price action—like the SPDR Gold Shares ETF (GLD). 

Many junior miners also present a solid opportunity right now, as many are significantly off their all-time highs. (And it’s worth noting that gold-related stocks tend to outperform gold during the precious metal’s rallies.)

Now, not all junior miners are created equal, so it’s important to be careful when selecting stocks. Look for established companies with solid assets.

Frank also anticipates adding several precious metal stocks to the Curzio Venture Opportunities portfolio in the coming months. 

The bottom line: Gold is poised to keep moving higher in the lower-rate environment—and take many junior miners along for the ride… If you don’t have exposure to gold yet, now’s the time to get it.

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