Both the technicals and the fundamentals are now firmly in favor of gold. This is good, and there’s more to come, asserts gold sector expert Brien Lundin, editor of Gold Newsletter.

It’s good news that gold has put some distance between it and $1,300. It’s not uncommon for the metal to drop back below big number levels before clearing them for good.

There are some relatively minor resistance levels just ahead, but the big target is the $1,372 level that represents the 2016 high. That’s relatively close to the really big target of $1,400.

There’s little technical resistance above that big number before we get to the all-time nominal highs around $1,800-$1,900. So if gold gets above $1,400, we’ll see massive buying coming in from generalist funds and traders.

SSR Mining (SSRM) — a Vancouver-based mining company — released its full-year production numbers a couple of weeks back, and the results outlined another stellar year in 2018. The firm's mines produced 345,000 gold-equivalent ounces for the full year and 88,000 gold equivalent ounces during Q4 2018.

Those numbers were supported by Marigold — a mining operation in Nevada. The company’s Seabee operation in Saskatchewan hit its highest production total in its history. For 2019, the company is forecasting 395,000 gold-equivalent ounces of production at cash costs of $700 per ounce.

I had the chance to meet recently with a member of the SSR management team, who pointed out how the company has demonstrated greater leverage to gold and silver prices than most, if not all, of its peer group.

Why? Well, for one, Marigold is a low-grade deposit that provides excellent leverage. The mine’s Red Dot deposit contains around one million ounces of measured and indicated resource not currently classified as reserves. At $1,400/ounce, this mineralization becomes economic.

Another levered asset is the company’s Pitarrilla project in Mexico. Pitarrilla is one of the largest undeveloped silver projects in the world, with a measured and indicated resource of 500 million ounces of silver. Pitarrilla effectively acts like an out-of-the-money call option on silver, one that will provide huge leverage on a big rise in silver prices.

SSR Mining is a great option for any gold or silver bug looking to anchor their junior portfolio with a solid producer. It’s a buy at current levels.

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