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years. This shouldn’t go to our heads. After all, if the super bull case to which I subscribe proves to be remotely right, what we have seen of late is a mere appetizer – what the Germans call Vorspeise. Moreover, until a bottoming cycle is well and truly over, one should always make room in one’s calculations for the kind of sharp pullback that is designed to inflict psychological carnage on latecomers. Downdrafts to flush out the weak hands are normal and to be embraced.
Despite these admonitions, we have nonetheless likely passed a key moment. Gold is not by any stretch a crowded trade that would require a shakeout in order to remain a healthy market. Thus, even if that head fake were to occur, it is my considered opinion that it would be the last pullback of its kind – and hence a massive buying opportunity. For whatever the shorter-term gyrations, gold has the potential to constitute a generational trade. In my experience, when one is a long-term investor, this kind of inflection point within a generational trade suggests it is time to make sure one has taken a position, with some dry powder left over to buy on weakness if one is lucky, and maybe also to average up on a breakout. This is a time for the prepared minds. If not, one may miss the first juicy part of the move and be paralyzed when gold really starts to move impulsively to the upside.
Think of those who made the money when the Dow took off. It wasn’t the old-timers who had “been there, done that” and seen enough false breakouts that they were conditioned to take trading profits. It was in fact the young bucks, who understood that the breakout was real when it happened – and that, contrary to the old adage, it really was different this time. I suspect that this will be the case in gold. Those who have few scars to speak of will make the big bucks (or their golden equivalents in Krugerrands, Pandas, and Maple Leafs) and will be able to approach the market objectively and without psychological baggage. Untraumatized by past disappointments, these relative neophytes will say, “Wow, the argument for gold is as good as Bitcoin; I’ll take some of that!” Oldtimers – like me – who don’t pretend to even care about cryptocurrencies, regardless of their merits or demerits, should just prepare to double down and hang on for the ride as a new generation rediscovers the unassailable brand that is gold. Repeat after me, and say it out loud: Gold! It sounds good, doesn’t it? You don’t even have to be a gold bug to appreciate its iconic appeal. It just comes naturally. Money – real, honest, unprintable (and damn near impossible to find) money – will do that to you.
So what has really, unequivocally changed over the last year? A lot, actually. Putting aside encouraging chart formations and price movements, it is the anecdotal indicators that are to me the most impressive. The first is the speed with which sentiment among smart-money names has evolved with regard to the merits of gold ownership. The rapidity of the pivot has surprised even me. The Great Pivot, in and of itself, is a very, very good thing for gold’s future trajectory, and certainly a phenomenon that requires some elaboration.
Reflect for a moment on how, only a year ago, it was likely at best a most intrepid fund manager who (almost apologetically) would propose to his shop an allocation of any kind to the “barbarous relic.” The snickers on CNBC that accompanied even merely a constructive attitude to gold gave away the whole story. Gold was viewed with near unanimity as an atavistic throwback, with any misbenighted proponent risking professional self-immolation just by raising the subject. While I am sure that the reflexive prejudice against gold still endures, even in the vast majority of places, it now no longer exists in enough places to alter the backdrop of the next phase of the gold bull market.
For if one looks at the raft of smart-money names willing to attach themselves publicly to gold now, it does represent a very windy change in sentiment. But it is really only a flurry reserved for a still very alert segment of the financial world. So while self-proclaimed contrarians may see in this gust of interest a flashing red light, this surely would be a mistake on their part. First of all, if these contrarians don’t own any gold, it is quite possible that they themselves are less contrarian than conventional. For the endorsement of precious metals by multiple experienced – dare one say, truly and experientially “contrarian” – investors and analysts is not remotely an indication of a crowded trade. The really, really big institutional money has not yet appeared and, despite several green shoots of validation from those with superior track records, gold remains one of the most under-owned trades in the financial world.
What will change that? Rising prices for gold. As is the case with most financial assets, the big money will

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