Gold and silver managed to stay above the levels I have spoke about the last couple days; $1,160 and $15.68 for silver. The miners, GDX, NUGT and JNUG gave back what they made yesterday and are now approaching once again their 52 week lows. GDX score moved back to -100 and GLD and SLV remained the same as yesterday.
I would not be going long gold or silver at this point because we are so close to breaking down. If we do break below those levels above, JDST may be a play to reap some profit from. Please practice patience and wait for the right set ups. Yesterday I said to be flat metals and today’s advice is the same until we see the right set up develop. JDST seemed to ignore that advice today and jumped up over 14% and is now up almost 100% from just a few weeks ago.
On these dips dollar cost averaging into physical gold and silver is the play.
From the Trading Desk
It’s been a particularly rough few weeks for gold and silver… Last Wednesday’s FOMC commentary stipulating the end of asset purchases and quantitative easing sent gold and silver lower. At the end of last week, Governor Kuroda of the Bank of Japan caught the markets off guard with an unprecedentedly large monetary-stimulus program of 80 trillion yen. The USD surged against the JPY and gold and silver collapsed through long term major support levels. Gold couldn’t maintain its footing above $1,180, a former triple bottom and a four-plus year low. Stops were triggered right around there and the yellow metal traded all the way down to $1,160 on by far the biggest volume day of the December gold contract thus far. There is now a double bottom in place at $1,160 while $1,180 has become strong resistance. Silver fell 4% and is currently just trying to tread water above $16. With the US taking QE off the table as other countries still have it firmly entrenched AND with the USD trading at multi-years highs, the short term direction doesn’t look particularly rosy for gold and silver.
UGAZ
UGAZ was up another 8.91% today closing at $14.91. I would be all out of any speculative position by tomorrow except for those traders that want to risk holding through a report that can have UGAZ turn on them quickly. Keep stops either way, and of course, take profit. Return thus far from $11 is 35.54%. The score for UGAZ is +70.
USO
USO did break below that $29 mark I mentioned yesterday and bounced a bit higher to close 29.30, down 46 cents or 1.55%. I had said we may get a bounce off of $29 and if anyone bought under that for a trade they would be profitable. If USO opens higher I would probably sell as this is still in a downward trend and the score is -90. USO is not a triple leveraged play but at some point, like gold and silver, will be a wonderful addition to one’s portfolio.
10-04-14 GLD CHART
10-04-14 SLV CHART
10-04-14 GDX CHART
10-04-14 USO CHART
10-04-14 UGAZ CHART
10-04-14 UGAZ 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.