Newmont Mining Corp. (NYSE: NEM)
In mid-July, anyone investing in gold mining companies saw their year-to-date share prices fall to levels not seen since the 2008 financial crisis, down more than 50% on the year.
As Money Morning Global Investing Strategist Martin Hutchinson pointed out, no sector right now is more unloved than the gold sector.
The Outlook for Gold and the Dollar Make Newmont Mining Corp. (NYSE: NEM) a "Buy"
Newmont Mining Corp. (NYSE: NEM) is one of the largest mining companies in the world. And like Goldcorp Inc. (NYSE: GG), which I discussed last week, it stands to profit handsomely from any additional monetary stimulus enacted over the next few months.
So let's buy Newmont Mining Corp. (**), and hold on for as long as Federal Reserve Chairman Ben S. Bernanke is allowed to debase the U.S. dollar to help his friends in the banking industry.
Gold is hitting record-high levels in almost every fiat currency.
This bull market move up in gold hasn't gone unnoticed, either. There is a major buyer of gold future calls in the options market. The buyer of these calls is an extremely deep-pocketed buyer.
The size of this trade and the potential profits would be staggering if the price of gold breaks above $1,600 an ounce. I have seen estimates of $100 billion profit potential.
I honestly believe that only a central bank or one of the largest hedge funds has the capital and mandate to take this kind of risk.
If this trade starts to come into the money, and it is nearly there now, I expect that the senior gold producers will find a real market bid.
So let's talk about Newmont.
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