Gold, Silver & Other Commodities

What is taking place around the world these days is analogous to the children's game of Musical Chairs, where everyone is happily going round and round at the beginning of the game but they all know that at some point soon the music will stop and those without a chair to sit in will be out of the game! I see PMs as being the chairs and, when the current financial music stops, those without PMs will be left holding nothing but paper money and history is full of examples of paper money suddenly becoming worthless!

There are so many articles - good and bad - available to read on the internet it is impossible to read them all. Many go under the radar because either the title of the article (an extremely important component) is insufficiently catchy to garner one's attention or, on the particular day they are posted, other articles come to the fore. Below are 8 - still very timely - articles you probably missed.

Gold has a long and impressive record of warning of trouble ahead in the global economy. It has usually been right in the past — and it is telling us right now that the outlook is much less secure than the market assumes. You ignore it at your peril.

Silver has moved above its 200-day moving average which is a signal for silver prices to challenge the $50 area, overcome it and then traverse ‘blue sky country’ to target the upper trendline shown in the chart shown below.

People are focusing on the price of PMs, treating gold and silver as vehicles for increasing in price relative to their cost of purchase and not on the reality of what the artificially suppressed market is showing. It is the reason for buying and holding gold and silver that matters. Know this: It does not matter what you pay/paid for owning physical gold and silver. Price is temporary; physical is permanent. That being said, however, a red flag is in currently in effect regarding gold & silver. Below I explain why.

Over the next couple of months everything should generally rise together but once the dollar puts in an intermediate bottom sometime in March or April, commodities and gold will move down into an intermediate correction as the stock market completes its final blow off top. After the stock market parabola collapses later this summer it will be time to put the pedal to the metal in the commodity markets, and especially the precious metal markets as the Great Inflation begins in earnest.

Both the short and intermediate term outlook for gold and silver stocks continues to be very positive. Historical analysis shows that GDX & GDXJ could rebound 100% and over 150% respectively by the end of this year. Both forecasts would be below the average of the one year rebounds following the 2005 and 2008 bottoms.

Buckle in, stay the course and be sure to remain situationally aware. Now is not the time to look away. Continue to remain patient, diligent, yet patient. February will be a very exciting and consequential month.

Charts capture the essence of timing so lacking in fundamentals providing information on how, (long or short), and when to enter, and at what price. Charts allow you to actually see how the markets are developing into trading opportunities, as well as when to avoid committing money. Below are analyses of gold and GDX (as a proxy for the relatively large cap gold producing stocks), in chart form, that may help you better understand what trades you should, and should not, take.

Obama has introduced the MyRA account and it is the prelude for eventually taking over the country’s entire pension programs, taking over all the accounts, (stealing your lifetime savings), and exchanging them for the US Treasury Bonds the Fed cannot sell to countries anymore. This is the only way the US government can cover its trillion $ (and growing) deficit spending. Got gold- physical gold?