Precious Metals Update - Jan 23, 2018
Gold continues to stay within a sideways trading pattern that has been in place since 2013. If you are a short-term trader then you may want to consider the chart below.
Buy at $1260 - Sell at $1350. We are approaching the resistance zone on gold at $1350; if gold starts to correct in a couple of months, look for support between $1250 - $1280. If gold continues to rally and overtake overhead resistance at $1350, we can expect it to go to $1400 very quickly. If gold continues past $1400, then we have a new bull market and gold will soon revisit the highs at $1900.
I have been following and writing about precious metals for over 12 years, back in 2005 I realized we are in a bull market for resources, and I started to focus on precious metals in particular. Since then, I have been investing and following the sector up until the start of the bear market in 2012. Back then I knew we would be entering a bear market and I even told subscribers to my newsletter that would be the case and it would last for many years.
Since then, I started focussing on the Cannabis sector and write about it at http://www.investinmj.com/. But since this past summer, I have been looking at the precious metals sector again and I think have or are close to finishing off this multi-year bear market. If so, the next leg of the bull market in precious metals has now begun and it is a great time to be adding to positions or starting to invest in the sector.
I much as I am bullish on Gold, I am even more bullish on silver. With silver to gold ratio currently at 78.8, silver can outperform gold in term of percentage gains if it goes back to about 35 to 1 like it did in 2011, or better yet back to the historical norm of 15 to 1.
I am also quite bullish on silver because JP Morgan now has a huge position in physical silver under its control. It wouldn't surprise me to see them let the price rise, so they can start selling into that when it is over $50 and hitting new highs.
For now, I would suggest everyone continue buying physical gold and silver, maybe take some Crypto profits and buy the hard asset and store that away in safe keeping. I will be looking at mining companies over the coming months, they offer leverage to rising precious metals prices and the gains can be spectacular when the bull market really starts roaring, but I don't think we are there just yet... hopefully soon.
Let us know what you think below, will gold break out in a new bull market or stay within the sideways trading range....
Cheers, Vin.