J.P. Morgan Sees Golden Opportunities for Huge Gains in 2014 With Gold and Silver

San Francisco (Dec 23)   With serious inflation still only a gleam in the eyes of the ardent gold bugs, 2014 looks like a tough year for gold miners. The metals analysts at J.P. Morgan think it is easy to look at the cost of new mines and conclude that current prices are unsustainable. But new mine projects may not be needed for several years if more of investors’ above-ground gold horde is unwound. Here is where the story gets more interesting.

For many on Wall Street the question of future inflation is a when, and not if, proposition. Central backs around the world are printing money at a furious pace, debasing the value of their local currency. So whether it is a question of gold and silver as a hedge, an industrial commodity or simply a straight contrarian stock trade, the J.P. Morgan team thinks now is the time to look hard at Gold and Silver. They also think the downturn in prices has created a golden opportunity.

Contrarian investing has paid off big for patient investors. It can pay off even bigger when the whole world is negative on the asset class. Think about the end of the American dream of owning a home just a few short years ago. The major homebuilders traded in the single digits. Think about the banks and brokerage firms after Lehman Brother went bankrupt in 2008. Some stocks traded in the single digits. Nothing with any staying power goes out of favor forever. When inflation rears its ugly head after years of currency printing, the patient gold investors may again have their day in the sun.