This just come to me from a professional trading service, and just happens to coincide with my opinion exactly!

“What to Do With Gold, Silver, and Precious Metals Stocks Today

Wednesday, April 5, 2017

Gold, gold stocks… Silver, silver stocks…

They’ve had a great start to the year.

The slowest mover in the bunch – gold – is up more than 9% since the close of 2016. The rest are up 12% or more.

If you’ve been watching closely, though, you know they haven’t climbed in a straight line. They all ripped higher after the Fed raised interest rates in mid-December… then pulled back sharply. This past month, they have bounced higher again.

So what now? That’s what we’re looking at today…

As you’ll see, gold, silver, and their related stocks are all at important levels. The charts tell the story better than words… So we’ll look at a handful of charts today. But before we do, let’s review a few chart-reading ideas…

We’ll start with “support” and “resistance.” Support is a level at which folks tend to buy an asset and prices often stop falling. Resistance is a level at which folks tend to sell an asset and prices often stop rising. If an asset breaks through support or resistance, it will often continue to move in that same direction.

Support and resistance take different forms. They often show up as straight lines on charts. But the major moving averages – like the “200-day moving average” (or “200-DMA”) – act as support and resistance, too.

Professional traders watch these levels closely. They may not trade based solely on these “lines on a chart.” But they – and we – use these levels to gauge the strength or weakness of certain assets.

First, let’s look at some charts. Then I’ll share my thoughts below…

The first chart we’ll look at today is a two-year chart of gold along with its 200-DMA. You can see that the price of gold stopped rising or falling multiple times right near its 200-DMA. Right now, it’s testing that resistance level for the third time in less than two months…


Gold stocks – represented by the VanEck Vectors Gold Miners Fund (GDX) – are still below their 200-DMA. But they’re close to bumping up against a downtrend line, which is also likely to act as resistance…


Next, let’s look at silver. It broke through its 200-DMA on its first rally this year… then fell back below it shortly after. Now, it’s once again trading back above the long-term moving average…


Silver stocks – represented by the Global X Silver Miners Fund (SIL) – look just like gold stocks. They’re bumping up against a downtrend line, too…


Of those four assets, silver is the strongest. It’s trading above its 200-DMA… And the 200-DMA itself is rising, which is another good sign. If we had to put money into the precious metals sector today, I’d lean toward silver and silver miners.

But I don’t suggest making that move just yet. If gold doesn’t follow silver higher, silver’s upside is limited. The two don’t move in opposite directions for long.

And when we look at a longer-term chart of gold, we see that gold faces a big resistance level at about $1,300 per ounce…


So even if gold breaks through its shorter-term resistance, we won’t get aggressive in the sector until gold breaks though this longer-term resistance level. And gold only has to rise about 4% to get there.

In sum, it’s a good sign that precious metals and stocks are all testing – or in silver’s case, breaking through – resistance levels. A breakout for any (more) of them would be a step in the right direction.

But don’t be surprised to see these assets remain choppy for the next month or two. We don’t have any clear trends in place. (Even silver is too close to call “clear.”)

For now, my advice is to hold what you have… But don’t open new positions in precious metals stocks now. If you don’t hold at least 5% of your investable assets in precious metals, buy the physical metals (coins or bars) today. You’ll find the information for some trusted dealers in the Training Center below.

If you don’t want to own physical gold and silver, the next best thing is owning a fund that holds the metals in a secure vault, like the Central Fund of Canada (CEF). Right now, it trades at a big, 8% discount to the actual value of the gold and silver in its vaults. That’s a great deal.

As you can see, CEF is trading right near resistance, too…


This is not an excuse to avoid precious metals if you don’t yet hold any. Remember, physical gold and silver are financial-disaster insurance. Even if the timing isn’t perfect, you should still own some. That’s not what we’re talking about today…

Today, we’re looking at the right time to speculate on higher gold, silver, and precious metals stock prices. And on that front, we don’t have an “all-clear” buy signal yet… But we may soon.”

What have I been saying? We’re at resistance, and which way will we go? We will learn relatively soon.

Harold

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5 thoughts on “An Identical Opinion

  1. Looks like The Fed FOMC Meeting Minutes were released and in them they discuss beginning to reduce their US Treasuries holding starting in 2017.

    Their Balance Sheet is currently $4.5 Trillion. That’s a lot of zeros.

    Like

    1. To reduce their holdings, they have to sell. That causes the dollar to go down and the interest rates to go up. Gold, silver, etc., should also go up.

      Like

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