Gold and silver were a little weak on Friday but both are still above the $1200 and $17 marks. The miners lost some and JNUG came close to breaking to the 52 week low hitting 2.60 before closing at 2.66. I like it at this price or lower for a trade as long as gold and silver maintain some strength but read about the Fed meeting this week below before you try and guage strength or weakness in the metals. In Asia, gold and silver have both opened higher a bit with the dollar down 7 cents.
On Friday I wrote an article about the economy and how we are experiencing deflation. The Illusion of an Economic Recovery. As such, oil is now down to $55.64 which gives hope that lower prices might be good for companies that utilize oil and gas. Deflation isn’t a bad thing. It’s just that the Fed doesn’t function in such a climate.
The Fed is meeting this coming week and on Wednesday we’ll see what they have to say about raising interest rates. I don’t think they’re foolish enough to do such a thing but they will talk the talk because they think unemployment numbers are fine and the economy is recovering. Meaning, they see the same thing the CNBC cheerleaders who are always bullish see. I just can’t get on that bandwagon so I had to write an article showing you what is really going on in the economy.
Natural Gas has gapped up over 10 cents and that’s good news for those in UGAZ. I thought DGAZ would be a good play hitting a higher high on Friday but got stopped out. Market makers love to break the high and then pull the plug and that’s what they did to DGAZ on Friday. UGAZ hit higher highs and those long will be rewarded Monday despite the warmer than expected weather forecasts. Because of these forecasts, I would be quicker with taking profit.
USO did what it does and ended lower again. Monday we may get a bounce to trade. Look for a higher high before catching this falling knife for a trade.
Expect a volatile week for gold and silver again with the Fed meeting coming up. Whipsaw is the name of the game where market makers will take gold one way and then reverse it. They may do it before the meeting or they may do it Wednesday the day of the announcement and Yellen’s speech. Just expect it and trade the trend and take profit while keeping stops if you catch the wrong side or it reverses quickly after you get in.
GLD CHART 12-14-14
SLV CHART 12-14-14
GDX CHART 12-14-14
NUGT CHART 12-14-14
JNUG CHART 12-14-14
GDXJ CHART 12-14-14
JDST CHART 12-14-14
DGAZ CHART 12-14-14
UGAZ CHART 12-14-14
TZA CHART 12-14-14
USO CHART 12-14-14
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About Doug EberhardtDoug 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
Disclosure:
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.