FINSUM + Magnifi: Gold Bulls See Second Stimulus Package as Tipping Point for Another Run

April 13, 2021

Gold had one of its biggest runs last August, but gold funds and ETFs have been the real victors. VanEck Vectors Gold Miners is up 50% over the past year which is 1.5x the gain in Gold itself, and smaller miners have been gaining traction with Canadian Amex Exploration up 128% and Starr Peak Mining up 300% over the past 12 months. As the Biden administration looks immediately to another trillion-dollar stimulus infrastructure package after just passing the first one, many are worried about the ‘Cobra effect’, a phrase coined by Lawrence McDonald. Where stimulus will be short-lived and people will be short-changed with hyperinflation. Junior minors such as Amex and Starr Peak are capitalizing on new territory and are in a position to benefit from macro factors the most.

(New York)

FINSUM + Magnifi: The cobra effect is too dire a projection for us, but a little stagflation (lower growth and higher inflation) is a potential possibility and growing debt makes that scenario increasingly more likely. Gold’s best performance usually occurs during stagflation.

Other news today: This Sector is at Huge Risk from Biden’s Tax Plan and Goldman Sachs says High-Yield Bonds are Income Investors' Fixed Income Solution

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