What a difference a day makes in a sharp turnaround for gold and silver. What was the reason? The Fed minutes came out. Anytime we have Fed meetings and the release of Fed minutes, we always have volatility. Gold opened lower then the release of the Fed minutes came out and gold shot up as seen in the chart below, and trended higher the rest of the day.
Federal Reserve minutes from the January 27-28 meeting expressed growing concerns about low inflation (some -like me-may call it deflation) and this could keep rates lower into the future.
“Participants noted that inflation had moved further below the Committee’s longer-run objective, largely reflecting declines in energy prices and other transitory factors. A number of participants observed that, with anchored inflation expectations, the fall in energy prices should not leave an enduring imprint on aggregate inflation. It was pointed out that the recent intensification of downward pressure on inflation reflected price movements that were concentrated in a narrow range of items in households’ consumption basket, a pattern borne out by trimmed mean measures of inflation. Several participants remarked that inflation measures that excluded energy items had also moved down in recent months, but these declines partly reflected transitory factors, including downward pressure on import prices and the passthrough of lower energy costs to the prices of nonenergy items. Nonetheless, several participants saw the continuing weakness of core inflation measures as a concern.”
Also in the minutes was the Fed’s concern about foreign issues and how they could hurt growth here in the U.S.
“Many participants continued to judge that a deterioration in the foreign economic situation could pose downside risks to the outlook for U.S. economic growth. Several saw those risks as having diminished over the intermeeting period, with lower oil prices and actions of foreign central banks both being supportive of growth abroad, but others pointed to heightened geopolitical and other risks.”
The mining ETFs, which all hit a daily red yesterday, reversed higher along with the metals today. Higher highs could have been played, but anyone going long gold, silver, or the metals would have had to be sitting at their computer with a buy order ready to execute once the news hit to catch the wave up. This is not an easy thing to do. We may get a continued trend higher tomorrow. Look for any dip and then break of the highs to go long. The Fed minutes do nothing to change my point of view about gold breaking to lower lows. We got under $1,200 in gold at one point today and I am confident we will be under it again. Presently you can’t ignore the run up from under $1,200 as a trade. Gold presently is at $1,213.80 and silver $16.60.
DWTI was the star of the day. It broke to a higher high at 98 and that could have been ridden up to the close at 100.24 and if adventurous, sold after hours as it jumped up to 107.25 at present. My overall deflationary call hasn’t been too bad for oil and DWTI. Many times it has traded back into the 90’s and could have been bought for 10 points or so each time. If one keeps a stop, I would continue to play long the dips in DWTI. UWTI is down to 3.30 after hours. Reversals are tradeable and always keep an eye open for them and trade the higher high. UWTI doesn’t get the higher range so you have to trade larger shares to get a decent profit from it.
RUSS and RUSL were not really tradeable today.
TNA is slightly still bullish, struggling to move higher. We didn’t get the normal 4 point swings in TNA today and I would attempt a trade in TZA on a break of 11.22 tomorrow. TZA moves slower, so you have to trade with larger shares to get a decent profit.
UGAZ was a small scalp trade only today on a higher high. Again, you need larger shares on this one too to make decent profit. It broke to a new high, then reversed course but it did not break to a lower low so you shouldn’t have got stopped out of it.
The mining package that we will be offering has been waiting for a release that I feel would coincide with my overall view of gold and silver prices reaching the targets I think they can fall too. Many so called experts last year in July thought the miners would take off and next thing you know they broke to lower lows. Some called this latest run up the final fall for the miners. It obviously hasn’t been and I know that’s frustrating for many who are long or have been long for some time. There is a reason why I have been patient with its release. There is also a reason why I chose the stocks I did and I’m excited about their potential. The mining package release date will be announced soon. There will be an email that goes out to all that have signed up. If you haven’t signed up yet, please click on the link at the bottom. Thank you.
Gold and Silver Stock Mining Package
We will be coming out with a mining package where we pick what we believe to be the best mining stocks to buy based on my research the last 8 months. We have been patient in releasing this because of the timing in purchasing these mining stocks can be tricky. We were one of the only one’s who recommended selling mining stocks in September of 2010 when the HUI was trading at 512.56. Much has transpired in the mining industry since that call with many companies disappearing or being taken over. Today many companies are struggling and if we do get a further pullback in the price of gold and silver, more companies will go bankrupt. Knowing which companies have the best opportunity moving forward will be key to you getting returns that we believe will be in the 100% to 500% range, and possibly much higher for some of the miners. This package will be released in the next few weeks and we will announce it on the site.
If you are interested in this Gold and Silver Stock Mining Package let us know by clicking this link below and completing the form.
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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