Yes, gold is on sale. You don’t have to pay $950 plus a premium to buy an ounce of gold. You can buy gold in the ground for a fraction of its normal price. The same holds true for many other essential natural commodities like silver, oil, uranium or copper.This opportunity has been brought your way by the same thugs that imploded global stock markets in 2008 via an historic combination of fraud and greed. Yep, they did a number on the commodity market as well as the associated stocks were decimated across the board. Select resource stocks are now outperforming.

Many gold stocks are presently priced as though gold was a mere $500 due to the carnage. Excellent companies with proven and growing resources are being largely ignored. This represents nothing short of an opportunity to buy gold at a discount.

I’m not in the habit of making gold price projections but this is not the time to abstain. I expect gold to take out $1000 and touch $1200 per ounce this year. $1200 is “only” a 26% increase from the current price. That’s certainly attractive but nowhere near where the price is ultimately headed. Few have any idea how $1200 gold will play out in the small cap resource stocks.

As mentioned, there is presently a huge disparity between the gold price and gold stocks. A gold price well north of $1000 will bring so much attention to the sector that gold shares will, once again, show leverage to the price of gold. This is an opportunity you can count on.

Resource stocks were indiscriminately thrown away late last year as hedge funds and overleveraged players were caught in a liquidity vice. The bottom came around mid-October. You would be hard pressed to find another market sector that received anywhere near the damage of small cap resource stocks. The larger stocks have rebounded nicely since that time frame but they are just getting warmed up. Practically no one yet has any interest in the smaller gold exploration or development companies.

The resource market is set to change. Company fundamentals, higher gold prices and a return of speculative money to the markets will bring gold related companies back into focus. The downside risk is much better protected on all of these stocks that have been mindlessly trashed. The upside is better than ever.

The companies that survive this carnage are going to be the ones that will bring in gaudy profits in the coming years. This is exactly what happened ten years ago in the resource sector but there is one key difference … gold and silver prices are much higher now than earlier this decade and they are just getting warmed up!

Crisis always presents opportunity. We have been focusing primarily on larger gold stocks since last fall but my Resource Windfall Speculator also has numerous smaller companies. Their time will come again and I doubt it will be far off. Rest assured that $1200 gold will do the trick.

Any market that can give you 2X, 5X, 10X or even 100X on your money can also cut your account in half. That’s the nature of the beast. The best time to enter such a market is after capital has received a haircut. This is a very cyclical market.

Our opportunity is two fold. Many stocks have been thrashed. Gold and silver, the monetary metals, are at attractive prices now but are also ready for a rocket launch. This is as good as speculation gets. The market carnage of 2008 will be a distant memory at some point.

Yes, you should consider what $1200 gold and even much higher levels will bring our way. Resource stocks are supposed to be leveraged to their underlying commodities. That leverage has been missing for an extended period of time now but it will no doubt return. $1200 will be an absolute catalyst if this doesn’t transpire before then.

I hear a lot of pundits project significantly higher gold prices but somehow fail to project how this will play out in the exploration sector. There is no way that the greed factor will not kick in as gold leaves $1000 in the dust. Human nature has not changed. Small cap stocks will be a rage once more. Smart money has already taken up positions.

Our market is prone to official interventions. It is a “managed” market but there is extraordinary stress built up in it projecting to take it much higher over time. A managed market needn’t frighten you away. No market can be suppressed long term against its fundamentals. It’s a failed strategy. It’s also an unbelievable opportunity for those with the courage and understanding required.

Gold is under no more suppression now than it was at $250. The end results will be the same.

Why is $1200 gold in sight this year? The simple answer is that ongoing monetary events have baked this result into the cake. Almost all countries are eroding the value of their respective currencies through extremely high use of the printing press. Gold sniffs out monetary chaos.

We are now moving to a multi-polar world where currencies from other countries or regions will be used in international trade, thus bypassing the US Dollar. There is also a distinct possibility that gold and/or oil will be used to back currencies once again.

Debt levels are beyond the point they can be serviced on national, state and local levels. Defaults are inevitable. The problems are too big to be papered over. The feds can engineer bank earnings or even an impressive stock market rally. They can’t solve the deeper underlying structural problems by attempting to rescue their foolish and nonviable banking buddies.

Buying gold (and silver) for your back yard is strongly encouraged. You have to pay retail for that privilege. You can, however, still buy gold in the ground on the cheap through gold producers and explorers. The same holds true for numerous other resources that remain in a long term bull market.

One of the tiniest explorers in my Resource Windfall Speculator has documented one million ounces of gold on just one project in their vast portfolio. The entire company is valued at $7.18 million Canadian in the present market. They hold over $4 million in cash! You get a million ounces (and growing) of gold, exceptional management and a terrific portfolio of projects for a little over $3 million.

That’s a mere $3 or less for an ounce of gold through this company. Yes, much work needs to be done to bring this project into economic production but this is the type of anomaly found in the disparaged resource sector at the present time. This Scotsman loves a discount!

Buy Resourcefully,

Rusty

P.S. I mentioned two resource companies, Riverside Resources and International Royalty Corp, in a Holiday issue five months back. They are up 50% and 100% respectively. ATW Gold was mentioned in a recent piece. All three of these companies remain in buying mode.