This page has been archived and commenting is disabled.
Inflation Expectation Tuesday: Gold and Silver: Time to Take Profits?
One of the
most common questions I receive on a daily basis is what investors should do
with their Gold and Silver holdings. After all, the two precious metals have
been on an absolute tear rising roughly 460% and 500% respectively in the last
10 years.
To be sure,
we’re talking about some SERIOUS gains here. And it’s not like those who
invested in 2010 missed out on the fireworks: thanks to the Fed’s QE lite and
QE 2 programs, both precious metals have gone into hyper-drive in the last five
months, rising 14% and 66% respectively.
Now, no
investment can move this much in so little time without needing a breather,
which is why precious metals investors are peppering me with questions about
whether or not to lock in their gains.
My answer
is: it all depends on WHY you own Gold and Silver.
If you own
these precious metals because you want to hold them as catastrophe insurance or
a hedge against inflation, then issues like short-term drops in price should be
seen as buying opportunities.
Indeed, Gold
bulls have already ridden out 13 corrections of roughly 7%, six corrections
ranging from 10%-16%, and three full-scale Crashes of 22-23% since the Gold
bull market began in 2001.
So if you’re
a long-term bull, you’re used to seeing some serious dips in the price of Gold
holdings. And if you bought more Gold
during those dips, you’ve profited handsomely.
In this
sense,
In contrast,
if you currently own Gold or Silver for trading purposes, you need to closely
watch the below trend-lines when gauging when to take profits .
First off,
Silver has exploded higher since August, rallying over 60% since that time.
The below
chart shows the clear trend-line for Silver today. If we take out this line,
then we’re likely going down to at least $27 per ounce, if not $26.
Gold hasn’t
gone on anything like the vertical jump that Silver has. However, it has formed a defining trend-line over
the last few months (see black line below). A break here would likely take us
down to support at $1325 per ounce. And if we break that line, the next real line of support is $1,250 per ounce.
Again, keep
your eyes on these trend-lines, they’re the best means of determining when it’s
time to take profits.
Good
Trading!
Graham
Summers
PS. If
you’re getting worried about the future of the stock market and have yet to
take steps to prepare for the Second Round of the Financial Crisis… I highly
suggest you download my FREE Special Report specifying exactly how to prepare
for what’s to come.
I call it The Financial Crisis “Round Two” Survival
Kit. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).
Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.
- advertisements -
Been Lurking.. for a while and even with my first post I can see "some folks you just cant reach" That said can't wait till $26. Buy the fucking dip!
yeah the partys over and the bills are coming due...the "powers to be" are just in the process of passing the check around the table to see which dumbfuck gets stuck the worst. Problem is they are ALL going to get stuck. and of course so are we...to varying degrees.....
guns, gold and god(pick the god you like best).
Hmmm, the problem that remains on everyone's mind, is what sovereign will blow up next. And in spite of what the deflationistas say, how long can a government play the smoke and mirrors game of aligning itself with bankers and screwing it's populace?
If you replace the tickers on those charts with something else (Instead of GLD, call it NFLX), all the folks here will be screaming that these charts look toppy.
I agree that they look toppy. I bought IAU around $13 (~$1325 spot price), and am willing to buy on the dip. Looking to buy physical silver coins on the dip too (sorry, can't pay $39 for a silver maple)
QE3, QE4 etc. is coming. If you guys think $8b POMO days are the rage, just wait until they're $80b POMO days!
Charting physical PM's (not GLD/SLV) and comparing them to entertainment stocks is somewhat laughable in the current economic environment.
Life is a bubble; gold is a shiny, hefty, and valuable article within the bubble of life.
Beauty withers and currencies devalue, but precious metals and stones over time do neither.
Gold is a HUGE bubble. No one wants it. People need CASH!
"no one wants it".....what fucking planet are you from?
Look, sgorem, let's face it, the guy is broke. He missed all the obvious opportunities so he comes here to whine. I'm not impressed nor moved, just bored.
Not so wise words from another poor fool who missed the run-up.
Don't come here and take a dump on the comments just because you failed to stay on top of the trend.
IDIOCY is the largest bubble of all --- and it would appear that you continue to do (more than) your part in blowing it up!
i think he's cornered the market.
owned mine since 1998 yeppers Im getting scared. What chart scares you the 1yr. the 5yr?the 10yr? LOL
Gold as insurance should be able to take care of you for the rest of your life, if everything else becomes very difficult. Like you can't get a job because you're too old, and social security has become pathetic.
So if an ounce of gold gets you a really good man's suit, you'll probably need about 1 oz per month for the rest of your life. Assume that's 40 years, and you have 480 oz, or $680,000 today. However, if you're still working you might keep that as a goal you're working towards. If you already have that much gold, just leave it there and keep building up other assets. If you own your house outright, you'll still need to pay for insurance, taxes, maintenance etc.
You have to decide if your investments are designed to save money or to make money. Gold is for saving. God help you if HAVE to make money in this snake pit of an economy.
My grandsons will need to pry a silver eagle (maple or phil) from my children's cold, dead monster box whenever they need to buy a new yacht, mansion or harem.
My only grandson from my eldest child is two years old, so I am sticking my neck out by giving both a value and time frame...
Of course, at some point, there will be a blow-off top, when the Dow:Gold ratio is 1:1, when the central banks, er, bullion banks, have to deliver to cover their shorts, and manufacturers will post not only their left nut, but both nuts (or 200 nuts, if leveraged 100 to 1), as collateral for real silver. Only then will it be time to swap ridiculously overvalued silver for absurdly undervalued real estate and stocks, etc. Don't even think of value in terms of FeRNs, which will only be a profane historical footnote at that point.
that's the point.. PMs to transfer your wealth to something else that you need or value once the price is right for you.. basically just use it smartly as currency
exactly Burt!
Yes, take your "profits" so I can take mine.
My profits are measured in ounces, rather than dollars.
I'll sell my PM's when Washington capitulates and there is a credible alternative!!!!!!
Dump the shiny and buy it back cheaper... The gubbermint is only going to confiscate at some point, sheeple.... and you ALL know that!
Fuck 'um. From my cold dead hand!
No government has ever confiscated gold and silver --- they can only illegalize their posession. If any government, particularly the US goverment, ever actually TRIES to call in gold and silver, they are only going to be met by laughter, and a giant and nearly unanimous "FUCK YOU!" from the gold and silver-holding public.
Only around 22% of the public's gold coins and bullion (as calculated by Milton Friedman) were ever turned in under the tyrant Roosevelt's shamefully dictatorial 1933 gold call-in --- do you REALLY think that even that many Americans would do the same today?
Can you say "buried cache"?
22% gold turn-in in 1934? no matter, it couldn't be used, couldn't circulate, and didn't rise in trade value until about 1972....a long long wait, while many 1930's technical stocks rose over 100x in that same time period of 40 YEARS...
you do remember the legal tender laws?
You clearly do not know your history very well. Gold actually was officially revalued at $35.00 an ounce in 1934, giving an automatic 74% gain to those who held onto their gold. And in relatively small quantities, such gold coins could ALWAYS be bought and sold, at least with numismatic dealers, at that revalued price. In addition, gold could always be taken out of the country and sold overseas, again at least in relatively small quantities that were childishly easy for the average person to smuggle through the non-invasive customs procedures of the time.
As for legal tender laws: Fuck them too. Immoral laws are only obeyed by sheep.
Regards non-invasive customs procedures of the time... what is the likelyhood that the TSA pat downs at airports are preparation for preventing gold smuggling? Off shore banking has already been all but eliminated right?
The level of misunderstanding about precious metals is simply astounding.
How do people not embarrass themselves making some of these comments?
They are merely parroting all the anti-gold articles I've read since the mid 00's. Tripe then, tripe now. One needs self-reflective capacity to become embarrassed. On a related note, supposedly 30% of people never feel existential angst and when told their life is meaningless their answer is "what's your point, I don't give a shit".
Who says they do not?
I know I am embarrassed for many of them, the extent of their willful ignorance often being positively painful to behold.
Instead they might get lead, "the other precious metal." When enough is flying and the minion enforcer class will no longer take paper for risking their @$$e$, the vampire class and their hapless parasite class will get rope.
...and the tyrant's real name was probably Rosenfeldt, a Rothschild cousin.
Disclosure: Long 3/4 inch Manila hemp
Selling my PM's, that would be a big NO. I don't know anybody who would at this point. Like selling your ammo so you can buy it back again if all stays well. Not a recipe for a good night sleep.
Good analogy. Secondary ammo market is a little soft anyhow.
To the person who junked you: Get a life.
The fact that the bullion market is rising and demand keeps growing on a industrial level and mining keeps going down is creating a real structural problem on the supply side.
Industry has been using old stocks to cover demand and the fact that investors have been buying everything the can get their hands on means that in the near future, the industry will have a lack of supply which will skyrocket the prices.
People aren't buying bullions for a short time investment. It will be there next year and if needed the year after also.
In short:
The silver market is in serious trouble. And once the speculators are playing the other side, a rising market for the next decades silver will be skyrocketing and even passing gold in price.
Agree that the fundamentals for silver look great. But equal to gold? That would be quite a stretch, I'll be stunned at 1:10 GSR. As prices ramp up more production can and will come on line. Yeah i know it takes years to get a mine working, but some existing mines will focus more on their silver then they have in the past.
The physical I own is catastrophe insurance; yes, I have bought on dips. The long term uptrend is intact and IMO will remain so until the debt crisis is solved.
One thing I have particularly enjoyed is loading the boat with HL each and every time the big players smack it into the mud. I've got about half a boatload right now at an average share cost of about $3.70.
My point? The physical is insurance, the stocks are for profit. The whole mess is sprinkled with other USD shorts (MOO, DBA, PHYS, CEF, FXF, FXC) and is guarded by a substantial cash position. No leverage. Strong hands; I will not be pushed off this position.
Dear central banks of the world: fuck you.
Where does Bache Halsey Stuart Sheilds come down on the matter?
Can you replace what you have, plus a LOT more with the profits, then yeah.
Immediately.
Other than that reason, only a fool would part with their core positions.
Things will NEVER go back to normal.
Hell, I cant even imagine normal anymore.
"Things will NEVER go back to normal"
2nd that.
I will continue to accumulate silver and gold and ammo until my safe is full.
Agreed.
i heard Blythe just bought some silver nipple rings
True, now we've a matching set.
I'm long GLD til March 2011 and long IAU til April 2011 and Long PSLV.
I'll keep my positions til I have reason to believe it's going into a permanent reversal. Ups and downs don't really bother me because my positions aren't weekly or even monthly trades. I do want to take profit at some point but I won't sell over a small reversal and then watch it head due north because of my fear. Then again I could get totally fucked out of all gains.
I bet people that took your advice mid-October are fucking pissed. I'm sticking this one out.
I trade paper gold and silver in small amounts, but have been acquiring physical silver for some time now and continue to do so.
How are the Hunt Brothers playing it?
reply for the poster; "it's a hundred percent free--" It's a hundred percent worthless. It's just ignorant babbling.
reply for the poster. Gold and Silver, is it time to take profits? A nice simple question, with a nice simple answer. No. The answer is no.
Gold and Silver - within two years gold back to cost of production, say $500 oz...
MEANWHILE the USA is in the real beginning of a New Bull Market in equity securities (not bonds, obviously)...DOW was near +100 mid-day...true its not really real money, but then logically the DEBT is not really real debt...its all sequestered (clever clever, only the USA FED has the financial resources to pull this off..
and pray tell what market fundamental, technical analysis or political geo economic factors do you see in the horizon to make this prediction? Or areyou just pulling it out of your ass?
Did anyone ever tell you that you're cute when you're an idiot?
Ya I love that one. How you going to produce gold at $500 an ounce when gas costs 20 bucks a gallon and your mining equipment sucks it up like a whore.
Please don't malign women who for either emotional or financial reasons feel the only way to support themselves is to exchange sex for money. It is unbecoming of you.
In the future, I humbly suggest you replace "like a whore" with something more appropriate, e.g.
"Like a banker".
Touche.
Yes, those limber bankers never cease to amaze me --- they seemingly effortlessly manage to suck like the aforementioned whore (and more so), while simultaneously giving it hard up the ass!