Fiat Currencies Are Crashing, Precious Metals Are Breaking Out

In late 2014, I expected gold to bottom and that there would be a massive January effect that would lift gold, silver and the junior miners in 2015.  Currently, gold is breaking above the critical 200 day moving average and the critical $1300 psychological barrier.  The period of lower highs has ended.

However, it is reaching a short term overbought condition, so a correction or consolidation is warranted and quite healthy.  Investors should expect a stabilization and look for a pullback to add to positions.  The long term downtrend appears to have ended so the 50 and 200 day moving averages should act as magnets of support not resistance.  Interestingly, gold and silver is rallying alongside the US dollar, US Treasuries and US Blue Chips as a safe haven.

Precious metals are rallying for many reasons.  First and foremost global central banks are slashing interest rates and instituting massive currency devaluations through quantitative easing to combat deflation.

The Yen, Euro, Pound, Canadian, Australian and New Zealand Dollar is crashing.  The Swiss Franc had a major bullish reversal after The Central Bank removed the franc’s peg against the Euro.  The Swiss showed the World that even though they may have not voted for a gold backed currency in 2014, they still want to protect themselves from currency devaluation by disassociating themselves with the crashing Euro.

The US dollar which has made a dramatic upturn as the only liquid alternative to other crashing currencies is overbought.  Now gold and silver are breaking out in terms of US dollars.  In due time, the volatility should lead investors to accumulate gold and the junior miners as a safer haven as the US dollar is still a thin blanket for a cold night.

Investment demand should increase as gold breaks into higher highs through $1300 and ends the four year bear market in 2015.  Silver appears to have bottomed at $15 and is now testing the 200 day moving average.

Take a look at these 3 gold miners. I believe they are on the verge of a major move higher as the price of gold stabilizes at higher prices.  Please do your own due diligence as there may be a conflict of interest as I would benefit if these stocks move higher as I am a shareholder and they are website sponsors.  Click on the links below to find out more about these three featured companies.