Is there anything Apple Inc. (NASDAQ:AAPL) can’t do?

First it revolutionized the personal computing business. Then, with the launch of the iPod in 2001, it forced the music industry to change its tune. Against initial market reservations, the company succeeded at making Star Trek-like tablets hip when it released the iPad in 2010. And in Q1 2015, a record 75 million units of its now-ubiquitous iPhone were sold around the globe. The smartphone’s operating system, iOS, currently controls a jaw-dropping 89-percent share of all systems worldwide, pushing the second-place OS, Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)’s Android, down to 11 percent from 30 percent just a year ago.

As you might already know, the company that Steve Jobs built—which we own in our All American Equity Fund (GBTFX) and Holmes Macro Trends Fund (MEGAX)—is history’s largest by net capitalization. In its last quarterly report, Apple posted a record $75 billion in revenue and is now sitting pretty on a mind-boggling $180 billion in cash. Many analysts believe the company will reach a jaw-dropping $1 trillion in market cap.

So what’s Apple’s next trick?

How about moving the world’s gold market?

iGold

This April, Apple will be venturing into the latest wearable gadget market, the smartwatch, joining competitors such as Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), Garmin and Sony Corporation (NYSE:SNE) (TYO:6758). All of the models in Apple’s stable of watches look sleek and beautifully designed—just what you’d expect from Apple—and will no doubt be capable of performing all sorts of high-tech functions such as receiving text messages, monitoring the wearer’s vitals and, of course, telling time.

But the real story here is that the company’s high-end luxury model, referred to simply as the Apple Watch Edition, will come encased in 18-karat gold.

What should make this news even more exciting to gold investors is that the company expects to produce 1 million units of this particular model per month in the second quarter of 2015 alone, according to the Wall Street Journal.

That’s a lot of gold, if true. It also proves that the Love Trade is alive and well. Apple chose to use gold in its most expensive new model because the metal is revered for its beauty and rarity.

To produce such a great quantity of units, how much of the yellow metal might be needed?

For a ballpark estimate, I turn to Apple news forum TidBITS, which begins with the assumption that each Apple Watch Edition contains two troy ounces of gold. From there:

If Apple makes 1 million Apple Watch Edition units every month, that equals 24 million troy ounces of gold used per year, or roughly 746 metric tons [or tonnes].

That’s enough gold to make even a Bond villain blush, but just how much is it? About 2,500 metric tons of gold are mined per year. If Apple uses 746 metric tons every year, we’re talking about 30 percent of the world’s annual gold production.

To put things in perspective, the Sripuram Golden Temple in India, the world’s largest golden structure, is made from “only” 1.4 million tonnes of the metal.

TidBITS acknowledges that the amount of gold is speculative at this point. But even if each luxury watch contains only one troy ounce, it’s still an unfathomable—perhaps even unprecedented—amount of gold for a single company, even one so large as Apple, to consume.

Ralph Aldis, portfolio manager of our Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX), likens the idea of Apple buying a third of the world’s gold to China’s voracious consumption of the metal. As I mentioned last week, China is buying more gold right now than the total amount mined worldwide.

“If the estimates of how much gold each watch contains are close to reality, and if Apple’s able to sell as many units as it claims, it really ought to help gold prices move higher,” Ralph says.

But Can Expectations Be Met?

Here’s where this whole discussion could unravel. Although we don’t yet know what the Apple Watch Edition will retail at, it’s safe to predict that it will fall somewhere between $4,000 and $10,000, placing it in the same company as a low-end Rolex.

With that in mind, are Apple’s sales expectations too optimistic?

Possibly. But remember, this is Apple we’re talking about here. Over the years, it has sufficiently proven itself as a company that more-than-delivers on the “if you build it, they will come” philosophy. Steve Jobs aggressively cultivated a business environment that not only encourages but insists on “thinking different”—to use the company’s old slogan—risk-taking and developing must-have gadgets.

“Our whole role in life is to give you something you didn’t know you wanted,” says current Apple CEO Tim Cook. “And then once you get it, you can’t imagine your life without it.”

A perfect case study is the iPhone. When it launched in June 2007, the cell phone market was decidedly crowded. Consumers seemed content with the choices that were already available. Why did we need another phone?

Yet here we are more than eight years later, and as I pointed out earlier, 75 million iPhones were sold in the last quarter alone.

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So it’s not entirely out of the realm of possibility for Apple to move 1 million $10,000 Apple Watch Editions per month.

Early in January I shared the following chart, which shows various analysts’ Apple Watch shipment forecasts for 2015, ranging from 10 million to 60 million units. Of course, all models are included here, not just the luxury model.

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Looking at it now, many of the predictions seem a little understated. After all, Apple hasn’t released a dud product in at least two decades (remember the Newton?). Come April, we’ll see for sure what the demand really is—for the Apple Watch as well as gold.

Global Metals & Mining Conference

Last weekend I attended the BMO Metals & Mining Conference in Hollywood, Florida, along with Ralph, Brian Hicks, a portfolio manager of our Global Resources Fund (PSPFX), and junior analyst Alex Blow.

“Generally speaking, companies have streamlined operations and are focused on shareholder returns,” Brian said.

Alex came away from the conference with renewed conviction that the global climate is conducive for gold, citing central bank easing policies and increasing volatility in world currencies, both of which support the yellow metal’s performance.

“It looks as though gold has technical support and that a bottom has been reached,” he said. “If the eurozone really picks up, gold demand should rise, which would also benefit China since its primary gold export destination is the eurozone.”

Mark Your iCalendar

I invite everyone to join us during our next webcast, to be held this Wednesday, March 4, at 4:30 PM ET/3:30 PM CT. The discussion will center on our Near-Term Tax Free Fund (NEARX), which has delivered 20 straight years of positive returns. We hope you can make it!

Index Summary

• The major market indices finished mixed this week.  The Dow Jones Industrial Average dropped 0.04 percent. The S&P 500 Stock Index fell 0.27 percent, while the Nasdaq Composite moved higher by 0.15 percent. The Russell 2000 small capitalization index rose 0.12 percent this week.
• The Hang Seng Composite rose 0.28 percent; Taiwan advanced 0.97 percent this week and the Korean KOSPI gained 1.24 percent.
• The 10-year Treasury bond yield fell 12 basis points to 1.99 percent.

Domestic Equity Market

The S&P 500 took a small step back this week as cyclical areas of the market took a breather after a good run in recent weeks. Telecommunication services and consumer Staples, Inc. (NASDAQ:SPLS) led the market this week, while energy lagged.

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Strengths

• The telecommunication services sector was the best performer this week, rising almost 1 percent. AT&T and Verizon were the leaders on the back of the contentious net-neutrality ruling. Net neutrality requires internet service providers to act as neutral gateways, very similar to how telecommunication service providers operate.
• The consumer staples sector was also strong as airlines and aircraft-related areas outperformed. Monster Beverage Corp (NASDAQ:MNST) rose by more than 16 percent as the company beat analysts’ estimates. The company is seeing success in rolling out new products and expanding its distribution partnership with Coca-Cola, which also had a good week.
• First Solar was the best performer in the S&P 500 this week, rising by 21.88 percent. The company announced earnings this week, but the real driver was the announced partnership with SunPower to form a “YieldCo” joint venture. This partnership would likely spinout steady cash flow producing parts of the business that would garner a higher valuation than if consolidated within the existing companies.

Weaknesses

• The energy sector was the worst performer for the second week in a row as oil prices declined as oil inventories continued to build. The natural gas producers and offshore-related companies were among the worst performers.

• The utilities sector was also a poor performer this week even as weather and bond yields have been moving in the