At present any pullbacks in metals should be bought as we move higher. The only thing that is standing in the way of a further breakout, or a faster move higher is the Dollar Index staying above 100 as it is up 19 cents in early Asian trading with the news of worse than expected Japanese GDP. This has lowered the value of the Yen thus having a little effect on the dollar and pushing gold down a hair.
But silver is shaking off the news for now and Friday hit a new high and is up slightly in early Asian trading again to 17.98.
Many may be wondering, did I miss the low in silver Doug? The answer to that question is 2 fold. One is you should be buying the dips when they come and technically, silver at 18 is still a dip. Second, we will move higher I think for now but have one more smackdown that most will not expect. Many will jump on the metals bull and think we are off to the races with the dollar falling below 100. But they just don’t know how things will unfold, and that’s why I wrote a 444 page book; to let everyone know what I see.
Those of you who have followed me for awhile know I can call the micro moves in metals quite well. I should since I do run an ETF Trading Service that capitalizes on those calls for subscribers. We trade and profit on the micro moves and right now I am bullish on the metals and any pullback should be bought.
But we will reach a micro high and the dollar will bottom and take off higher again, higher than where it was when it hit a 14 year high. That’s the part most will miss. This in turn, if correct in my analysis, will put extreme pressure on gold. But it will be all assets that get hammered, similar to the 2008/2009 financial crisis. All except U.S. Treasuries which will benefit from “perceived” safety. But eventually those too will fall prey to the meltdown or deflationary credit contraction, and then gold and silver will reached those “undreamed of” heights. We seriously are not far away from this scenario playing out.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.