Gold Guru's Junior Favorites

04/05/2017 2:50 am EST

Focus: COMMODITIES

Brien Lundin

President, Jefferson Financial, Inc.

You should never buy gold based on short-term geopolitical events or a temporary shift in trader sentiment; that's like building a house on a foundation of shifting sand, cautions Brien Lundin, sector specialist and editor of Gold Newsletter.

That said, the real reason to buy gold is for long-term protection against the inevitable depreciation of fiat currencies. Gold's primary role is to safeguard your wealth.

The debts that the U.S. and other developed economies have built up are monstrously large, and still growing. Their size demands some significant level of currency depreciation, and every investor needs to insure themselves from this eventuality. That means gold and silver.

Meanwhile, the miners have been trading weakly as a group since mid-February. Given my longer-term outlook for the metals, I think this can be considered a buying opportunity in general.

Among my favorite junior gold miners is Auryn Resources (Toronto: AUG), which I added to our portfolio based on the strength of its management team.

That recommendation was also based on the resource defined at, and the potential for expansion on, its Committee Bay project in Nunavut, located within a large land position along a 300-kilomter, high-grade gold trend.

Management has since added the Gibsons MacQuoid project in Nunavut, the Homestake Ridge project in British Columbia and four copper-gold projects in Peru.

Given the scope of the company’s prospects and its financial ability to explore them properly, current levels for the stock are a rare bargain for one of this group’s flagship ventures.

Avino Silver & Gold Mines (ASM) is generating substantial profits with silver prices at current levels. Take this performance as an indication of the profits to come if silver continues on an upward track during the balance of 2017.

The company's San Gonzalo and Avino mines, both part of its Avino Mine complex in Duragno State, Mexico, produced 2.6 million silver equivalent ounces for the year. Cash costs for the year averaged $8.48 per silver equivalent ounce.

Avino stands to do very well in the silver bull market I see unfolding in the coming months. It remains a buy at current levels.

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