Our Favorite Chaos Hedge Just Made a Breakout

Don’t sweat the short-term volatility in gold prices…

That’s been Palm Beach Letter editor Teeka “Big T” Tiwari’s advice for months now.

Big T has been urging gold owners to be patient; as he always says, “Let the game come to you!”

Well, the game is turning in our favor right now. On April 11, gold broke a key indicator Big T’s been monitoring.

He told us during a phone chat a couple of weeks ago that “if gold breaks this level, it’s going to go higher… You’ve got to tell everyone.”

Before we tell you what’s got Big T so bullish on gold right now, here’s why we think everyone should add some gold to their portfolios…

Regular readers know our goal here at the Daily is to help you get a bit richer every day. And the key to building wealth is protecting what you already have.

That’s why we recommend you hold at least a small portion of your assets (about 5%) in physical gold as a chaos hedge.

In times of turmoil, gold will serve as a store of value for your wealth. And act as a ballast for your portfolio against any financial chaos.

But gold can also be a profitable investment. Based on Big T’s current price estimate of $1,400, we could see gold rise at least 9% from its current levels.

More on that in a moment. First, the indicator Big T wants us to tell everyone about…

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Gold Breaks Through Resistance

The indicator Big T’s been so pumped about is called the 200-day moving average (MA). The 200-day MA measures the average price of an asset over the past 200 days.

We’ve been watching this indicator closely along with him.

Here’s why…

The 200-day MA often acts as a line of resistance for asset prices. Generally, when prices approach this line, they retreat.

We saw this with gold over the past few months. It approached its 200-day MA four times and retreated each time before finally breaking through last Tuesday (see chart below).

Chart

Now that gold is above its 200-day MA, Big T believes the price will go higher from there.

(That’s because there’s another tailwind behind gold. See our Chart Watch below.)

As Big T says, stay focused on the long game, and you’ll make a killing in our gold stocks.

The two most common ways to hold gold is through gold bullion (coins) and the SPDR Gold Trust ETF (GLD). Either way, you’ve got a solid chaos hedge. Buy whichever one you’re most comfortable with… or a little of both.

Regards,


Nick Rokke, CFA
Analyst, The Palm Beach Daily

P.S. Big T’s followers know there’s another asset class he’s bullish on—cryptocurrencies. Over the past year, Teeka has met with bitcoin millionaires, industry insiders, and CEOs everywhere from Austin, Texas, to Lisbon, Portugal. He’s given his readers the chance to make as much as 199%, 206%, 286%… even 509% in as little as 13 days.

This week, Big T’s hosting a free training series on cryptocurrencies. In this series, he’ll show you the secret to being a cryptocurrency investor, how to set up your own cryptocurrency trading account, and reveal some of the fastest-growing cryptocurrencies you’ve never heard of.

You can register here to access the free videos and sign up for Big T’s webinar on Thursday. And for the first time ever, we’re giving away $250,000 in actual bitcoin, and all webinar attendees will have a chance to claim their portion.

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CHART WATCH

There’s another tailwind pushing gold higher…

It’s what Big T calls the “Magnet Effect.” The Magnet Effect is an inverse relation between gold and “real returns.”

A “real return” is simply the rate of return you get on a 10-year Treasury note after accounting for inflation.

[For example, if you earn 2% interest on your 10-year bond but inflation is running at 3%, you’d have a “real return” of −1% (2% minus 3%). So each year, the money you have in bonds would actually decline in value.]

When real returns go down, gold prices generally go up, and vice versa.

Investors are attracted to gold when real rates go negative… much like a magnet attracts metal. This sends gold prices higher.

And as you can see in the chart below, real rates are very close to negative territory.

Chart

As we said above, Big T’s price target for gold is $1,400. But if real rates continue their downward trajectory, gold could go even higher than that.

It’s definitely a good time to own our favorite chaos hedge.

—Nick Rokke

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BIG T’S 3-MINUTE MARKET MINDER

Don’t Let the Government Rob You of Your Cryptocurrency

On April 7, Poloniex, a major cryptocurrency exchange, announced it will suspend business activities in the state of Washington until further notice, effective April 21.

This action stems from uncertainty around state regulations.

It’s important that you move your funds by April 21. If not, they will be locked up in the exchange. It will be an arduous process to get those funds back.

In today’s must-see 3-Minute Market Minder (transcript included), Palm Beach Letter editor Teeka “Big T” Tiwari lays out the steps Washington residents need to take to protect any money they have on Poloniex.

This isn’t the first time nanny-state government officials have stepped in and decided that they know better than you how to live your life.

We’ll likely see more regulatory pitfalls as we continue this journey. So even if you’re not a Washington resident, you’ll want to keep abreast of what’s going on there…




MAILBAG

From James R.: Recently, you said PBRG co-founder Tom Dyson made $500,000 investing in bitcoin (“How I Made $500k From One ‘Asymmetric Bet’”). But in the past, you said Tom only made $350,000. In this age of deceit when it comes to money, it makes you look like a liar. Something must have been lost in the translation.

Editor’s Reply: Thanks for the message, James. To clarify, Tom invested in bitcoin when it was $5 per coin and started selling when it went over $125. He made more than $500,000 on his initial investment before taxes. After taxes, his net take was around $350,000, which he made clear in his initial essay.

Regardless of which figure you use (before or after taxes), it still shows how you can make hundreds of thousands of dollars from small stakes in cryptocurrencies.

From Jim W.: First, thanks to Teeka for helping us with cryptocurrencies and bringing them to our attention… It’s very satisfying to know there are financial newsletters out there worth counting on.

My only disappointment is with Coinbase. Abra looks good but it doesn’t recognize my small bank. Very frustrating… But I understand cryptocurrencies are in their infancy and that’s part of the reason they’re likely to be big money.

Editor’s Reply: Thanks for the note, Jim. If you’re a Palm Beach Letter subscriber, check out our Crypto Corner. Among other things crypto-related, we list several other exchanges you can use to buy cryptocurrencies besides Abra. PBL subscribers can watch the instructional videos right here. If you’re not a subscriber, watch our free video on how to set up a Jaxx wallet.

IN CASE YOU MISSED IT…

The maverick behind some of history’s rarest mining stock gains (1,608%, 3,900%, and 9,536%) has just made a new discovery.

One small, publicly traded small-cap owns the rights to this massive deposit. And when this news reaches the mainstream this month, share prices could go parabolic

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