Gold and silver did see some more selling today as we march towards the potential of lower lows into next year. If you think about it, we are only $184 from hitting the $1,000 mark. Do you think, that with a stock market breaking to new highs and market makers knowing they would like to break the back of gold bugs that we will actually hit $1,400 before we hit $1,000? Why? What will be the catalyst?
Gold needs some fear to come into play and we’re just not seeing that come quite yet. If you live in Russia you have fear. If you live in Japan and hold Yen you have fear. Many in Europe might have a little fear with the new capital requirements for banks coming into play next year. Stay tuned for that developing story. But here in the U.S. with the 10 year treasury yielding only 2.20%, there is no real fear and the weaker prices in the metals show this.
There is no money velocity occurring and without inflation, we are still mired in deflation. Just look at the price of oil to see this. Because oil is falling in price, Russia is also crashing. Do you see how RUSL, UWTI and the metals are all related in some form or another? And how TNA has been the story of late? \
But you can bet on my radar we have TZA and the aforementioned UWTI and RUSL again if it gets closer to $10 (which was the equivalent of $1.60’s the 52 week low pre-inverse split of 1:6).
Natural gas bounce a bit above $3 today after trading below for the first time in a few years last week. UGAZ smiled at this and was up 10% today. If you look at the weather map, it is quite cold everywhere, even here in San Diego. But I don’t use the word “cold” here like I did when I lived in Chicago. I know what cold really means! Please note that DGAZ daily turned red but we don’t have a green for UGAZ just yet. Something to keep an eye on though and risk vs. reward is now with UGAZ over DGAZ as long as the weather remains cold.
Couple more days of gold falling could occur with Mutual Funds getting the junk off their books for end of quarter and end of year reporting. The miners are all stuck in the red. JDST couldn’t get too much going today with the decline in gold. See if it breaks to a higher high tomorrow. Could set you up for a nice trade or to protect your longs if you hold the physical.
12-29-14 GLD CHART
12-29-14 SLV CHART
12-29-14 GDX CHART
12-29-14 GDXJ CHART
12-29-14 JNUG CHART
12-29-14 JDST CHART
12-29-14 NUGT CHART
12-29-14 DGAZ CHART
12-28-14 UGAZ CHART
12-29-14 TZA CHART
12-29-14 USO CHART
12-29-14 UWTI CHART
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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.