Gold and Silver Outlook 12-09-2014

Nice day for gold and silver! In yesterday’s Current Thoughts I made the following comments;

“If you haven’t traded JNUG long yet, and as long as gold stays above $1,200, then JNUG I think is still worth a shot tomorrow over 3.34 with stops.”

“Keep an eye on the dollar and if it breaks below 89 then unlike last week when the dollar dropped and gold also fell, this week we may get the good trade with the miners as long as gold wants to move higher. Perhaps tomorrow.”

“If the Euro has a technical bounce, then the dollar will fall and gold should rise along with the miners.”

Gold popped up $40 from it’s low at $1,200.30 but closed $9 off its high at $1231 and silver rose $1.10 from its low before closing down 12 cents from its high.

Euro Rally Dollar Fizzle

The Euro rallied off of those technical levels I mentioned yesterday and the dollar got hit today because of it. This gave gold an added push up along with some of the market selling in Asia and Europe that occurred overnight. Money was flowing to save havens of gold and silver along with U.S. Treasuries where we saw the 10 year rate fall to 2.22 after hitting 2.21 earlier in the trading session.

Miners Lagged but Still Playable

The short trend triangle turned up for GDX and NUGT but not for JNUG. The miners were a little slow to catch onto the gold and silver gravy train today but they were still a trade from pre-market to mid-day. I would still be buying the dips as long as gold can keep the momentum going and the dollar continues to fall. Whipsaws on the 3X plays can come but I would be looking at buying the higher highs until this short term trend reverses course.

Lower Prices for Gold and Silver Still to Come

I am still in the camp of lower lows for gold and silver. We have had these exciting turn ups many times and each time I have said I expect lower lows. I know you don’t want to hear it, but if it saves you some money by being a little more patient then we’re all happy. So far my indicators haven’t let me down and those following along have hopefully made some good trades to bide your time until you can buy the physical at hopefully better prices. My advice though is still to buy the dips by dollar cost averaging into a position. I’ll write more about this thinking as to why in a blog post soon.

Others I Watch

UGAZ gave us a little ride today but then gave it all back. Still liking it as a swing trade into next year unless nice profits hit us earlier. DGAZ is the ETF with the green weekly though and it can’t be ignored as the powerful forces of a trend are still against the longs in natural gas.

TZA was up a dollar earlier and gave it all back and then some by the close. The stock market is still in bullish territory and it may be for some time. Even 90 year old Richard Russell is bullish as can be on the stock market as he mentioned a couple days ago before this downturn. I don’t ignore what Russell has to say and TZA is still a tough play to go long. If you look at TNA though it has been consolidating since Nov. 12th, so something has to break soon. Either a good play in TZA is coming or TNA will break out. A move above 79.08 in TNA would be a good play to about 84. Then I would look for the 52 week high of 86.68 to be taken out.  TZA has to get over 13.99 for me to really like it.

USO has gone from 39 to 24 since June. It’s an ugly chart. The low of 22.74 from Feb 1st, 2009 is what we’re up against now. Will it be taken out? Don’t know but it would be something I would do if I was a market maker.