These High-Return Gold Stocks Are Worth the Risk

Junior gold miners are soaring today. And history tells us this investment is worth the risk in the near term... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] These High-Return Gold Stocks Are Worth the Risk By Sean Michael Cummings, analyst, True Wealth --------------------------------------------------------------- In 2018, Colombian guerrillas murdered four people working for Canadian miner Continental Gold... The guerrillas were battling for control of the region's more valuable mineral resources... including gold mines. Continental got a contract to mine in an area full of illegal mining operations. It was working to close down these competitors. And so the Colombian guerrillas retaliated... Guerrilla warfare isn't a typical risk on a company's balance sheet. But it's just a hazard of doing business for junior gold miners like Continental Gold... These small mining companies must overcome extraordinary challenges to deliver their product. They work around political instability, foreign governments, and high operating costs. All of this translates to a lot of volatility in gold-related stocks... When junior gold miners fall, they fall hard. But when they rise, they can absolutely soar. The latter is exactly what we're seeing today... --------------------------------------------------------------- Recommended Links: ['GET OUT OF BANKS IMMEDIATELY']( Salting away your cash in a T-bill is one of the worst things you could be doing with your money. A little-known vehicle outside of banks could double, triple, or even quadruple your life savings if you know where to find it right now. And it has nothing to do with any typical stock, bond, or crypto. [Click here for the full details](. --------------------------------------------------------------- [The World's Biggest Multibillionaire Investor Group Is Buying THIS by the Tons]( Most folks have completely missed the fact that there's one group of investors so powerful they're literally buying ONE THING by the tons... stacking it in their locked vaults on pallets in record numbers. [Find out what it is and see how you can get in with just a few dollars](. --------------------------------------------------------------- Junior gold miners are going stratospheric. Gold has been outperforming in recent months, surging 12% since March. But junior gold miners have skyrocketed 28% in the same period. These returns show how junior gold miners can amplify the gains of gold itself. They act as a leveraged bet on the metal. That's because when gold prices rise, these miners can earn a lot more in profits without any increase to their costs. Of course, this same leverage can punish these companies severely when gold declines. Based on the recent price action, these companies have more upside ahead. Here's why it's worth the potential risk... During their recent rally, junior gold miners went on a rare win streak. They rose five days in a row into April... after rising six days in a row into March. We can see these win streaks by looking at the VanEck Junior Gold Miners Fund (GDXJ). This exchange-traded fund ("ETF") contains a basket of junior gold miners. It's a useful way to track the sector as a whole. In the chart below, you'll see the fund's two multiday win streaks since February. Check it out... Gold miners strung together six days of increasing prices from February to March. And then they made a second streak of five days from March to April. I wanted to know what the more recent streak meant for junior miners going forward. So I tested every example of GDXJ rising for five days in a row going back to 2009. I didn't use a rolling five-day period... meaning if GDXJ rose for six days, like in March, I only used Day 5 as a trigger. In short, five-day win streaks are rare for GDXJ. The fund has only generated this signal on 1% of days in the past 15 years. However, the signal has a chance to lead to outperformance in the near term. You just have to dig a little deeper into the numbers. First, check out the broader outlook... Overall, junior gold miners tend to lose money in the long term. The category falls about 4% in an average year. But buying on a five-day win streak tends to generate a positive near-term return. Junior miners are up 1% on average three months after a five-day streak. And they're up 2% on average in six months after the signal. But buying on a win streak comes with some risk. GDXJ was only up 50% of the time in three months, and only 45% of the time in six months. So your odds are a little worse than a coin flip if you hold for six months. However, if you do hold that long, you might be in line for some serious outperformance... The average positive return for a six-month period was 35%. The average loss was 19%. But what's most striking is the maximum return after this signal. After a five-day win streak in 2016, junior miners went on to return 133% in six months. That significantly outweighs the maximum six-month loss... which was just 45%. With good timing, you can use the volatility in junior gold miners to your benefit. And based on GDXJ's recent run to the upside, now looks like an excellent time to go long. Good investing, Sean Michael Cummings Further Reading Gold recently hit "overbought" levels based on one metric. Normally, that's a bad sign. But according to history, this doesn't mean the rally is over. Similar instances have pointed to future upside... [Read more here](. Palladium is an often-overlooked metal. And right now, sentiment is near its most bearish level yet. That's great news for contrarian investors. Based on history, prices have more than doubled after hated setups like today's... [Learn more here](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK Curtiss-Wright (CW)... "offense" contractor Thomson Reuters (TRI)... media, finance, and more Interactive Brokers (IBKR)... online brokerage Markel (MKL)... insurance Welltower (WELL)... health care REIT Qualcomm (QCOM)... semiconductors Garmin (GRMN)... GPS and wearables Procter & Gamble (PG)... consumer goods Colgate-Palmolive (CL)... household goods Domino's Pizza (DPZ)... pizza Sprouts Farmers Market (SFM)... grocery stores Carvana (CVNA)... online used cars General Electric (GE)... manufacturing 3M (MMM)... manufacturing Ryder System (R)... logistics Duke Energy (DUK)... utilities Agnico Eagle Mines (AEM)... gold NEW LOWS OF NOTE LAST WEEK Bristol-Myers Squibb (BMY)... pharmaceuticals CVS Health (CVS)... drugstores and vaccines Walgreens Boots Alliance (WBA)... retail pharmacy Etsy (ETSY)... online marketplace VeriSign (VRSN)... domain-name provider Starbucks (SBUX)... coffee "World Dominator" Warner Bros. Discovery (WBD)... entertainment --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized financial advice. © 2024 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.