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[CHART] Gold Stocks Soared 136% the Last Time This Happened

If you want to make serious money – we’re talking “retire early” money – in today’s markets, you need to do more than simply match the indexes. Even spotting a good company with an innovative new product isn’t good enough.

After all, every other investor on the planet is trying to do the same thing.

But one way you can get ahead is digging deeper and finding the sort of data, patterns, and forecasts the average investor simply overlooks.

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That’s why we’re showing Money Morning readers how a disruption to one pattern could send gold stocks soaring.

And we’ll show you one stock at the center of this pattern with the potential to double your money…

How to Double Your Money with Gold Stocks

Companies producing and selling gold see their profits (and share prices) fluctuate right along with gold prices.

The relationship is so strong, gold traders have long turned to the gold-to-gold-stocks ratio to spot trends in the gold market.

And we’re currently witnessing a unique moment in this relationship.

Instead of gold stocks moving with the price of gold, they’ve actually been falling much further than gold prices.

Take a look at the relationship between the SPDR Gold Trust ETF (NYSEArca: GLD), which tracks the price of gold, and the VanEck Vectors Gold Miners ETF (NYSEArca: GDX) in the chart below.

Gold mining stocks largely tracked gold prices a year ago, but they’ve trailed substantially since then, and that’s a bullish signal for gold stocks…

gold stocks

You see, this situation will eventually correct itself, and gold stocks will snap back to their typical behavior mirroring gold prices.

And for that to happen, gold stocks will have to rocket higher to catch up to gold prices.

When the divergence between gold and gold stocks last peaked in January 2016, the GDX rocketed 136% higher by August 2016.

But it gets even better…

When the GDX last trailed GLD so much, gold prices hit their bottom. That kicked off a gold rally that amplified the gold stocks’ rebound.

That’s almost exactly like the scenario we’re witnessing today. In fact, Money Morning Resource Specialist Peter Krauth thinks gold prices are hitting their bottom right now, meaning a gold rally will kick off soon.

That will add even more fuel to gold stocks’ explosive potential.

But you don’t want to own just any gold stock. Even ETFs are bogged down by the worst stocks in the index.

Instead, we’ve found a gold stock with the potential to double your money in less than a year.

It’s a gold producer poised to rocket higher when gold stocks rally back to match gold prices.

And our proprietary stock ranking system says it’s the perfect buy right now…

Why Kinross Gold Corp. Is Our Top Buy

Kinross Gold Corp. (NYSE: KGC) is one of the best gold mining companies in the world.

It operates seven different mines in locations including Russia, Canada, and Africa, and it’s currently building a new one in South America.

Even though gold prices slid into a bear market earlier this year – a situation that could be enough to put some gold miners out of business – Kinross is still raking in a massive profit.

In the second quarter of 2018, right in the middle of gold’s slump, Kinross brought in $130 million in profits, and it even upped its operating cash flow to $184.5 million from $179.7 million a year ago.

For a gold miner to maintain such a substantial profit even during a gold price slump is a sign of strong management, which is one of the reasons we’re especially bullish on this company. We know once gold prices rally again Kinross will be printing money.

In fact, the company has even been able to expand during the slump, a luxury less profitable miners simply don’t have. Kinross completed the expansion of its Tasiast mine in Q2, with plans to expand even more once it gets government approval.

On top of that, Kinross acquired the mineral rights of 2.1 million ounces of gold on land near its Fort Knox mine in Alaska.

That’s part of why analysts are projecting Kinross’s stock will soar by more than 100% over the next year, surging from today’s price of $2.98 a share to over $6 a share.

We agree.

Right now, Kinross Gold has our top Money Morning Stock VQScore of 4, making it one of the best buys on the market right now.

 

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

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The post [CHART] Gold Stocks Soared 136% the Last Time This Happened appeared first on Money Morning – We Make Investing Profitable.

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