The Tidal Waves Of Fear and Greed In Precious Metals

With weather beaten gaze the fisherman scans the waters, watches and waits and then at the perfect moment, he casts his line. So we who are anglers for fish of silver and gold study the swirling waters and heave our hooks of small bait in hopes of catching the Big One.

The marketplace in precious metals is more complex than the ocean with its swirls and eddies and cunning currents designed to confound even the most skillful.  Yet the flows of fortune are constant if we but learn to read them. So we keep a firm hand on the rudder as long as the major wave in precious metals, uranium and rare earths is on the secular upswing. We ride the waves through their minor down drafts. Periodically, the moves catch in our throats and turn our stomachs. Still we hold on to our technical tiller and ride the major wave. We welcome such turbulent waters or down drafts as buying opportunities to make even more profitable catches.

It is important to take profits when there is euphoria and to patiently wait for levels when fear escalates and long term support is found.  In precious metals and the markets we have seen a huge tidal change in emotions from euphoria to fear. Gold and silver are having a healthy pullback and will be presenting additional buypoints.  It is moments such as these in the gold and silver secular bull market where one must be strong and not feed into the emotion that shakes out many traders from the long term trend in higher precious metals. Many advisers are becoming increasingly bearish which should signal now is the time to look for opportunities. Remember the market will make you euphoric and fearful at the wrong times. This healthy pullback we are experiencing is shaking out some of the momentum traders who were buying in the fall when the euphoria was extreme. This turned out to be a top and at that time the consensus was overly positive. Now the China Rate Fears is a way to shakeout retail investors and provide an opportunity for institutions and experienced traders to buy “real” money on sale.  Eventually precious metals will turn as deficits and debt ceilings are increased and the U.S. dollar breaks into new lows. The municipal bond crisis is just beginning and soon states will be asking for handouts.

We may see further bailouts from the federal government as many states are in danger of defaulting. The bankrupt states are already asking Washington for assistance. This devaluation of the dollar that Geithner and Obama are asking China for is to help the US pay off its debts and be able to raise its debt ceiling with cheap devalued dollars. This should be bullish for precious metal prices where investors will seek shelter from soaring government deficits and the possible loss of the U.S. dollar as the world reserve currency.

As opportunities await for the inevitable turning of the tides you are invited to join a free 30 day trial subscription at so that you may follow my continuing perception of the tidal conditions in gold, silver, uraniums and rare earths.