Two More Legs in Gold Bull Market Expected: Mining Shares Still Undervalued

Gold mining shares have underperformed the precious metal itself, leaving them near historic lows despite gold's retreat to $4,000 an ounce. Don Durrett, founder of Gold Stock Data, attributes this disconnect to the US national debt of about $40 trillion, which is growing by roughly $2 trillion annually.

This, according to Durrett, has trapped policymakers into choosing between fighting inflation and supporting economic growth at the same time. He believes that Washington will ultimately prioritize economic growth through monetary expansion, supporting a prolonged rally in gold.

Durrett sees two more stages of gold's bull market ahead, with a second leg expected to begin in the third or fourth quarter. This could lift gold prices to $5,500 and silver between $80 and $100 by year-end. He also forecasts the Federal Reserve to cut interest rates twice this year and twice more in the first half of next year after an equity market correction.