In Thursday’s Current Thoughts I write that I was bullish on gold and silver no matter what the outcome and said the following; “Gold can still move up to $1,400 on momentum and short covering and any move higher towards that number I would be a seller, especially for mining stocks.”
Gold got to $1,368 on that run and closed at $1,315 range and today is opening up in Asia as high as $1,336 so far and silver as high as its resistance at $17.99. This may trigger some short covering of the sellers who thought we had topped on Friday after the $50 drop in gold from the highs. But a nice market maker trick is to push to new highs so $1,400 is still on the table for now.
Brexit is two years away, but some serious damage has been done to the markets. It’s not 2007-2009 era trouble yet, but the markets are definitely feeling some pain and I would use any bounces to sell longs.
The dollar is moving up with gold but if the market gets a nice leg down then gold and especially gold mining stocks will take a hit as the dollar continues a march to 100 again. From there it will be decision time for gold. My book research tells me what’s coming next and I am sticking with it for now. But my book also is VERY bullish gold for a MULTITUDE of reasons for the long run. We’re just trying to get this micro analysis on the right side of the trade and so far I have done ok with that.
Earlier today, on Seeking Alpha in the comment section on my last article I was asked about buying leveraged ETFs that short gold. Here is my response written before the gold/silver markets opened higher in Asia.
“personally I would like gold to hit one more higher high to $1,400 to trap more longs before a move down. Not sure the dollar moving higher will allow it though. I wrote on Thursday in my Current Thoughts that no matter what the outcome of the vote I leaned bullish gold but did not expect a big push. However, that thursday before the run up I did say that as we approach $1,400 I would be a net seller. We got to $1,362 and closed at $1,316. DGLD would be the most riskiest. If you play it, just have a pre planned stop in place. I can enter what I think is a good trade many times to catch the beginning of a trend and not get hit hard but reap larger rewards, simply by keeping a stop when I am wrong.”
There was an article on Seeking Alpha today that I had to make a comment on as the author didn’t seem to have a ragap on why gold should be part of a diversified portfolio. The article was called; Weekend Reading: Gold Is Worthless. Buy At Your Own Risk. I think the author purposefully wrote that title because he simply wanted people to read his article and get paid to do so by each person who clicks on it. I say this because his reply to what I wrote
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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