Closed out my "short senior Gold stocks"
trade last week for good profits. My subscribers and
I bought the early Thursday AM lows in senior Gold stocks and silver. Think
we have begun a 4-6 week bull run into a spring top. After that, we'll have
to wait and see what happens.
I will be very interested to see how Gold does during this move. I think it
re-tests the 2011 summer highs. Here's a one year daily chart thru Friday's
After the spring top in mid to late March, we'll likely get a
significant correction. A new all-time high in Gold would likely indicate a
milder correction than if the price gets stopped at or before the old highs.
Either way, I am bullish for the next month in the precious metal (PM) sector
for my trading account and think all PM sectors will do well.
Longer term, I own physical metal and don't worry about it as an investment
at all. Now that the ECB is trying to [further] undermine the integrity of
its bond markets by putting itself at the front of the line and subordinating
other European sovereign debt holders in the Greek debacle, the final pillar
is coming into play. That pillar has been pointed out by Mr. James Sinclair
at jsmineset.com and it is that of the bond markets of the Western world.
Once people are seriously worried about the safety of bond markets and
currencies, Gold will really start to, ahem, shine. Everything is lining up to
create "the mother of all bull markets" in Gold and silver.
Of course, this is all just a normal reaction to the financial mania that
preceded the current secular Gold bull market. A secular correction in the Dow to Gold ratio down
to 2 or less (we may well go below 1 this cycle) will teach everyone to avoid
common stocks forever. Everyone will have learned their lesson the hard way.
This, of course, is when it will finally make sense to buy common stocks
again as a "buy and hold" proposition. In the mean
time, it's all about the bling bling for
this secular cycle. All you have to do to ride the wave is buy pieces of
shiny metal and watch your wealth and real purchasing power grow while paper
assets are debased into oblivion. What could be easier?