Right now, you can buy a dollar's worth of gold for about 36 cents.
That sounds impossible. Here's how it's real.
The major gold miners are throwing off record cash flow — even after gold's recent pullback. The four largest have never had this much free cash on hand. Ever. At today's gold price, they're running margins as high as 75% — the most profitable they have ever been.
Which hands them a problem.
Go here to see the problem — and why the majors are about to go on a shopping spree for the ages.
When a major gold miner makes record profits, it does one of two things: hand the cash back to shareholders, or buy the best junior mining assets to secure future production.
And here's the piece the market is missing:
The best junior assets are still priced as if gold were stuck at $1,800 an ounce — not north of $4,000, where it trades today.
So the majors are staring at their own future production shrinking, sitting on record cash, looking at top-tier junior assets trading at a fraction of what that gold is worth at today's price.
They don't have a choice. They buy — or their output keeps shrinking until they're out of business.
That's how you buy a dollar of gold for 36 cents: you own the junior before the major is forced to pay up for it.
The gap between what these assets are worth and what they trade for has a name. I call it the Golden Anomaly. It only appears early in a gold bull market, and it closes fast — usually the moment the majors start writing cheques.
So you can pay full price after the gap closes…
Or buy the dollar for 36 cents while the Anomaly still exists.
My name is Garrett Goggin, CFA, CMT, and it's why Porter Stansberry recently called me:
"THE most knowledgeable gold investor in the world."
Go here to see my Golden Anomaly portfolio — and the three names next on the majors' shopping list.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio
