Big Profits Ahead In
Gold & Silver
Gold & Silver
I'm convinced that big profits are coming in gold and silver; and most likely in the precious metal and commodity stocks as well. Of the three, I consider physical gold to be the safest. $1300 gold this year is very doable.
This does not mean one or the other will have the biggest return on investment when all is said and done. Very often assets or investments that have greater risk also have greater upside potential. It's a question of risk versus reward and how it all unfolds.
It is important to note that I do not see this move higher starting tommorrow, or next week for that matter, although the latter is possible.
A correction in precious metals appears likely over the short term. After this correction plays itself out, a new leg up in the ongoing bull market is expected to begin. The charts will tell us when.
I'm so convinced of this move occurring that I'm willing to put my money where my mouth is. I'm offering a money back guarantee to all new subscribers to the Honest Money Gold & Silver Report during the next two weeks.
If physical gold doesn't reach $1000 an ounce by the end of the year, I will return all new one year subscription fees taken out during the next two weeks. You get to keep the free book and other reports no matter what happens.
Today (2/2) physical gold & silver were hit pretty hard, the precious metal stocks a bit less so. This is part of the correction I see coming. Volatility still reigns. There will be violent moves both up and down. Taking profits when they appear seems to be the most prudent action.
As stated above: gold is the safest asset to own regarding preserving purchasing power. Silver is next. The precious metal stocks are a distant third. If all goes right, however, the stocks will provide the best return on investment.
The most significant risk to pm stocks is overall stock market risk. The stock market is mired in a bear market. If another leg down develops, it will most likely take all stocks down with it, including the precious metals. If a bear market rally occurs, as presently appears likely, the precious metal stocks will benefit.
Many of the charts in this weekend's market wrap showed either negative divergences or overbought levels. Together these indicators signal that a short term correction is highly probable.
A lot depends on the direction of the dollar. It is a bit troublesome that the dollar is down hard today (2/3), yet gold is down as well.
The reasons could be many - it really doesn't matter, as price action trumps all else.
They don't pay you anymore if you know why; nor do you lose less for knowing why. This week's market wrap will explore the possibilities.
Right now there is a lot of press coverage on gold and silver, as they have been moving ahead quite strongly. Such zealous emotions generally coincide with short term market tops.
As the chart below shows, gold (GLD) is in overbought territory and several indicators have turned down, including a negative RSI divergence. Gold can remain overbought longer than most can remain solvent, however, so keep that in mind.
The next chart shows the various resistance and support levels. Gold has run into solid resistance around $925.00, which coincides with last fall's highs.
This past weekend's market wrap mentiond that this resistance would probably NOT be taken out on the first attempt - so it has come to pass.
This is not a "bad" thing, as gold is backing and filling and building a stronger base from which to launch the next assault on $1000, and then the old highs. The stronger the base - the stronger will be the next move up.
If $900 does not hold then $875 becomes the next support level. If that is taken out then the bottom trend line and 65 ma both reside at $842.00. I do not foresee this level being breached, but anything can and does happen.
Any reasonable correction or consolidation that occurs will offer great value as long as the bottom of the channel is not breached.
Mr. Market likes to fool as many people as he can, as often as he can. To run with the herd can be dangerous, while contrarian thinking can reap large profits.
The gold stocks are showing a couple of negative divergences per the chart below. Price made new highs while the indicators did not follow suit.
Price action could turn back up and resolve the divergences; or price will go down aligned with the divergences.
I invite you to stop by the Honest Money Gold & Silver Report website to check out this week's full report that contains thirty charts & graphs, including individual charts on the stock watch list. Available on site are both a written and audio version of the new book Honest Money.
See up to date charts of the precious metal stocks with the best chart patterns and profit potential. It takes time to keep track of the markets in today's fast paced world. Leave the work to us and enjoy your free time.
A free copy of the book Honest Money is included with every new subscription along with two special reports: Investment Vehicles for Bull & Bear Markets; and How to Protect Your Assets in today's turbulent markets.
The first is a list of over 50 ETF's and other investment vehicles offering profit potential on both the long and short side of the markets: stocks, bonds, currencies, gold, oil, water and more.
The second special is a list of actions that can be taken to help protect your assets; including T-Bill Only Money Markets, wire redemptions capabilities to gold depositories, both here and abroad; and more. This week you can request a onetime free full market wrap report on the site via the email provided.
The new book Honest Money explains the constitutional history of gold and silver money; and it contains a new monetary system that is in accordance with the gold and silver coin system mandated by the U.S. Constitution.
Remember, I am so positive on the precious metal markets that I'm offering a money back guarantee if $1000 an ounce gold is not hit this year. Plus, you get to keep the book and other reports regardless. That's an offer that's hard to beat. Stop by and check it out.
Good luck, good trading, and good health.
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