Investors are in love with gold right now. Individuals and institutions are pouring cash into the yellow metal.
Meanwhile, industrial metals remain one of the most overlooked commodities around. They’re often outshined by their “precious” peers.
I’m talking about metals like aluminum, copper and nickel.
This week’s chart focuses on one special member of the industrial family. It has done so well this year that it’s actually managed to beat gold - one of the hottest assets on the planet - by more than 60%...
I’m talking about zinc.
Zinc is one of the most widely used metals in the world. It’s a basic component in most of the items you use on a daily basis like cars... household fixtures... paints... rubbers... smartphones... the list goes on.
Unlike gold and silver, zinc and its industrial counterparts are generally not looked upon as crisis assets. Rather, zinc’s value as a commodity is grounded in good, old-fashioned supply and demand.
So if fear and panic aren’t driving up zinc, what is? It’s simple.
Until recently, supplies of zinc have been lavish. But now analysts are expecting a global decline in zinc supplies over the next few years.
Zinc mining resources are drying up in major producing regions such as Peru, Australia and Canada. Macquarie Bank, a global investment bank based in Australia, has estimated that the global zinc supply has dropped as much as 15% in just the first half of 2016.
In order to meet global demand, it will take millions - if not billions - of dollars in investments to develop enough productive mining operations. It will also require several years to bring those operations online.
As supplies contract, growing demand will become harder to satisfy. That means the outlook for zinc prices is extremely bullish.
One way you can play this trend is to buy shares of a miner like Trevali Mining Corporation (OTC:TREVF). The stock is up 209% from its low in November of last year.
Trevali is a Canada-based zinc producer with operations in Canada and Peru. Its mining project in Peru is the Santander (MC:SAN) mine, which produces 2,000 tonnes of concentrate per day.
Trevali has an agreement with Glencore PLC (LSE: LON:GLEN), one of the world’s largest commodity trading companies. Glencore buys 100% of the Santander mine’s production. Which means, no matter how high zinc prices move, Trevali will have no problem profiting on its production.
In commodities bull markets, it’s the producers who stand to profit most. That’s often true even when a metal is in decline. As The Oxford Club’s Resource Strategist Sean Brodrick says, “Miners make money when others don’t.”
But as investors, we can earn even greater returns. In fact...
Sean uses an indicator that pinpoints the optimal day to buy and sell mining stocks for the best shot at a massive gain. He refers to it as a “Golden Light” (and with good reason).