<p>Last Wednesday, I wrote a “Peace Breaks Out” headline and noted that the conflict with Iran was the shortest in U.S. history.</p>
<p>In the interim, it seemed the peace may have also been the shortest ever!</p>
<p>It also seemed that my skepticism regarding the deal had been well-founded, as Iran quickly announced it was closing the Strait of Hormuz while the current Iranian president openly bragged how they had sandbagged the U.S.</p>
<p>It looked like we were in store for another round of disappointment, accompanied by another round of selling in risk assets, including metals and miners.</p>
<p>However, President Trump’s threats over the weekend in response now appear to have gotten peace talks back on track, whether or not one believes that track is advisable or sustainable.</p>
<p>Regardless, gold and silver bulls aren’t getting pummeled again today, and in fact both metals are up nicely on the “news.”</p>
<h2>Where Now?</h2>
<p>So is the bottom behind us… and has the next rally begun?</p>
<p>My view: Perhaps the former, but not yet the latter.</p>
<p>As this metals and mining market has tumbled along in the turbulent wake of the Iran war, we’ve had one false breakout after another as peace deals emerged and crashed one after another.</p>
<p>Then came the latest “Warsh out,” as the newly installed Fed Chairman struck a decidedly hawkish tone after his first meeting.</p>
<p>As you know, I viewed that hawkish stance about as skeptically as I’ve viewed each peace deal — unlikely to last, given long-term evidence.</p>
<p>The cold, hard reality…the irrefutable arithmetic…is that today’s federal debt load requires lower interest rates to prevent the entire house of cards from collapsing under the weight of debt service expenses.</p>
<p>In my opinion, Warsh’s positioning was preapproved by Trump, and the new chairman will eventually, by choice or by the sheer force of the numbers, revert to the ever-easier monetary policies that have kept the current financial system intact.</p>
<p>In the near term, the combination of an elusive end to the Middle East conflict, Fed rhetoric and market seasonality will keep gold and silver restrained for another month or so.</p>
<p>But these types of liquidity-driven corrections are par for the course in gold, as our friends with the In Gold We Trust report just reiterated in one of their invaluable charts:</p>
<p><img class="mx-auto p-3" src="https://www.moneymetals.com/uploads/content/liquidity-driven-setbacks-are-an-integral-part-of-bull-markets-chart-560×316.png" alt="Liquidity Driven Setbacks are an Integral Part of Bull Markets (Chart)" width="560" height="316" loading="lazy" /></p>
<p>This chart, taken from their great, just-released “Top 20 Charts” report (which I urge you to download <a href="https://enews.jeffersoncompanies.com/q/0K3UyXcXPvLY8oyuY0XeBqQ9hm6Ya62Da4cPZcOJU1RFRkFOLkdMRUFTT05AaW5kZXBlbmRlbnRsaXZpbmdidWxsaW9uLmNvbcOIKh8h0fXoc6IhuOHdegJnCCwaJA" target="_blank" rel="noopener">here</a>), shows that these kinds of liquidity-crunches are to be expected in a long-term, fundamentally based gold bull market.</p>
<p>The goal is not to let these corrections shake you from your convictions and out of the market.</p>
<p>The age-old adage maintains: In a bull market, <i>buy the dips</i>.</p>
<p>We are in a bull market for metals and miners. And in my opinion, it’s the greatest one yet, with much more to come.</p>
<p>We don’t have much longer to wait for the next up leg, and our job now is to take advantage of the bargains that these periodic dips provide.</p>
