In my last Current Thoughts I mentioned that we could be close to a bottoming process in metals. Friday was a somewhat flat day but we are up +7.50 to 1233.20 now on Sunday and a good sign for gold bulls heading into Monday. Silver is up 18 cents to 16.42. The dollar was down to 98.42 and very close to a breakdown but bounced up on the news to 98.63, up 21 cents. We may see it later this week. If so, gold and silver have bottomed.
The markets knew Macron would win the French election and this should be bullish for the Euro as his intention was to stay. But Macron’s victory will be a short lived, maybe a couple months run in the Euro as the dollar falls and gold rises. There are just too many issues in Europe to have any long term faith in the Euro. Gold bulls will 100% enjoy this ride up but it’s not over. We do have one more leg down in gold and it will be a big one, catching many by surprise. The dollar will shoot up at that time past 100 to possibly 120+ and gold should hit some lower lows. I’m not a naysayer on gold at all, and if you have followed me long enough you know I’m not too bad in calling the turns, but I have written about this already in my book Illusions of Wealth.
We have sinned as a nation and we keep on sinning. What I mean is the perpetual debt that we keep adding to, left and right in government, and I have called it the elephant in the room no one in the financial media dare address. They ignore it like the plague and it is their sins too that will eventually be punished by a stock market that gets hit hard. Very hard. The coming contraction will be worse than 2008 but to say something like that now when the market is hitting new highs makes you an outsider. I’m ok with that label. I would rather be right for my clients sake than that of a pipe dream media person who is a good speaker but doesn’t understand monetary systems and economics too well. It’s ok to enjoy the ride higher if we get another move up in the stock market. Just know I would be cost averaging out of the markets on any moves higher, not adding to Apple, Facebook, Amazon, Alphabet (owns Google) and Netflix. 4 companies does not a market index make. Valuations do matter. Take those 4 stocks out of the indexes and you find the truth.
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
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