These Six Gold Companies Could Create Exceptional Wealth Sooner Than You Think: Jeb Handwerger

For smart investors watching the gold-Dow ratio rather than mainstream media headlines, this is an exciting time to be a precious metals investor. The world seems to be conspiring to push the price of gold higher, with continued zero interest rates, Chinese stock market volatility and more unrest in the Middle East. In this interview with The Gold Report, Gold Stock Trades Editor Jeb Handwerger lays out his short list of junior mining companies that have been actively adding value, and that will be in demand when all eyes are on the sector.


The Gold Report: In your last interview with The Gold Reportyou said that a Federal Reserve interest rate hike would be the best thing for gold. As we now know, the board decided to keep rates at almost zero. How does that impact your projections for precious metals?

Jeb Handwerger: It was almost a done deal that the Fed was going to raise interest rates in September, but then the Chinese market began to crash and just the threat of raising interest rates caused a price decline in the S&P 500, the likes of which we haven't seen in a long time. It was a record drop, breaking a major four-year uptrend and forming a technical bearish pattern. The Fed announced on Sept. 17, when it was expected to raise interest rates for the first time since 2006, that it is uncertain about the economy, that the equity markets are too volatile, and that there are too many dangers of another recession. Now the Fed is doing whatever it can to prevent a recession.


The global stock markets are beginning to roll over, something I predicted in that same interview, due to fear of a rate increase before the end of 2015. The reality is we have a slowing global economy with the threat of higher interest rates, and that sparked a rally in the precious metals. The gold-Dow ratio is now beginning to turn in favor of precious metals, which are once again seen as a safe haven to preserve capital and protect against markets that are completely overinflated and experiencing record volatility. That is why I have always advocated for a diversified portfolio, including precious metals commodities and high-quality junior mining equities. I would not be surprised to see gold at $1,600/ounce ($1,600/oz) and the S&P500 at around 1,600 before the end of the first half of 2016.

The bottoming process for the juniors could be taking place now, after a seven-year decline. All of these factors make this a phenomenal time to find assets not correlated to the stock market, the bond market and the U.S. dollar. The best assets inversely correlated to those things are precious metals commodities and junior miners.

Now, the junior miners are even cheaper than they were in the late 1990s, when gold was below $275/oz. This could be a once-in-a-lifetime value proposition that may not last much longer. The safest havens during these periods of deleveraging are assets trading near their intrinsic values or at liquidation levels, which we've seen. Many of these miners are trading even below their cash values.

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1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold ...

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