This is the hottest trend in gold stocks right now.
It’s a simple idea.
It’s historically proven.
And the small group of companies using this strategy are trouncing the rest of the gold market by three or four times over.
The Best Gold Stocks To Buy In Bull Market
Before I get into this unique idea that’s making a fortune for gold investors, I have to give you a warning.
The stock I’m going to show you today is merely an example of this idea. It’s not a recommendation. The stock is already up nearly 500% this year and is hardly the best value in the sector anymore (note: later today I will show you the best value in gold stocks today).
Just wanted to make that clear. Now let’s get to it.
The hottest trend in gold stocks is “gold banking.”
If you haven’t heard of it, you’re not alone. Not many have.
At the rate things are going though, everyone will have heard about it in a few years time. And those learning about it now and deploying it will be sitting on fortunes by the time they do.
Gold banking is simply buying the companies with the largest gold reserves and resources in the world.
These are not the big gold miners.
They’re not the mid-tier gold miners.
They’re not the exploration companies hoping to find the next big gold discovery.
Gold banking companies have taken the latest bear market to develop past discoveries and prove up how many millions of ounces the deposits contain and acquire gold deposits that are still in the ground at great prices.
One of the best examples of the “gold banking” trend is Brazil Resources (BRIZF).
Over the last five years this company has been steadily acquiring gold deposits.
It has acquired a total of 13.4 million ounces of gold in historically proven resources in Brazil and a few other places around the world.
The company basically says it has no intention of taking on the risks of building a mine to tap the gold contained in these deposits. It’s just acquiring and “banking” them for future sale to someone else.
That last part is the key. The value of the gold deposits tend to rise exponentially with the price of gold.
A report today mining consultant SNL Metals & Mining found the total average cost of mining an ounce of gold is $833.
So when gold is $1,050 an ounce as it was earlier this year, there isn’t much money to be made in mining. Especially considering the risks, time, and money involved in building a mine.
As a result, many of the world’s gold deposits were pretty much worthless.
Granted, they contained a few million ounces of gold. But were never going to be mined at current prices.
However, when gold jumps to $1260 as it did yesterday, that changes everything.
All of a sudden the potential mine that was going to net $200 an ounce in profits is going to net $400 an ounces.
That $200 spread is really the difference between having a shot at building a mutli-million dollar mining operation and a worthless mountain of dirt.
The difference in share prices is reflected in those extremes.
And it’s why the run in gold prices from $1050 to $1260 led to a run in Brazil Resources shares from 26 cents to $1.50.
In this case, the idea of “gold banking” turned a 20% move in gold prices into a near 500% win in stocks.
That’s the power of gold banking.
In the end, a bull market in gold will create a lot of fortunes.
Everything gold related will do well.
If you want the best though, gold banking is where it will really be at in a couple of years time.