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Posts Tagged ‘precious metals’

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Is The Resurrection Of Undervalued Miners in 2012 Beginning?

In Market Analysis, Stock Movers on January 6, 2012 at 9:14 pm

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Once again at the end of 2011 we heard the voices of negation sounding the fear of the bursting of the commodities bubble.  The naysayers come out with their Cassandra calls whenever commodities go into a characteristic and salubrious selloff.  They never really learn to respect the importance of gold (GLD) and silver’s (SLV) role in the long range secular multiyear ongoing rise.

Gold Stock Trades emphasized the importance of avoiding knee jerk reactions when precious metals experience healthy pullbacks.  Today the commodities (DBC) are rising across the board as they return from the premature grave to which the naysayers have assigned them.

One wonders how the short sellers are enjoying this periodic resurrection in vital metals such as gold(GLD), silver(SLV), rare earths (REMX) and uraniums(URA).

Attendant to a new rise in these vital commodities, the economic base should be prepared to receive them.  On January 24th-25th the Federal Open Market Committee will be meeting once again in Washington.  One of the areas on which they will be focusing is the travails of the U.S. Housing Market and new methods to bring down the high unemployment rate.  The Fed is promising a transparent horizon of record low interest rates to provoke the banks to lend money.

It is important that the Eurozone malaise undergo corrective measures in order to restore Europe to health.  Recently Christine Lagarde, Head of the International Monetary Fund, has expressed broad generalities toward the need of fiscal reforms.  It is hoped that Lagarde will not be a laggard in the birth of the “EuroTarp” by whatever stimuli to be applied.

It is important that a coherent plan of attack be formulated rather than the indiscriminate printing of Euros(FXE), which we are currently witnessing.  The Euro is rapidly losing value.  This procedure of currency devaluations is counter-productive unless corrective measures are instituted such as serious spending restraints, permanent tax rate cuts and regulatory relief.  In plain language, the Europeans and the Americans can’t print more dollars (UUP) without building on a base of budgetary restraint.

How does this affect our selected precious metals stocks(GDX), rare earths (REMX) and uraniums(URA)?  This week the rare earths are emerging from their  second half 2011 slumber.  It is felt that they will lead the upcoming recovery.  This week certain of the rare earths are producing impressive percentage gains as an augury of things to come.

As of this writing we believe Tasman(TAS) and Ucore(UURAF) are leading the pack.  These stocks possess unique features to which attention must be paid.  Ucore owns a mountain of high grade heavy rare earths right here in the United States.   Tasman dominates the European Continent as the only possessor of a 43-101 resource with heavy rare earths and a high percentage of the vital element dysprosium.    Rare Element Resources (REE) released news that they have just expanded their resource to show potential for heavy rare earths.  The market is reacting favorably as it has nearly doubled in one week.

Ucore, Tasman and Rare Element Resources have broken downtrends on record high volume the first week of 2012.  Molycorp (MCP) has underperformed and still needs to break above resistance as it is lagging the sector.

China is playing a dual role not only for their own domestic needs but in establishing a quota system for exports to other nations.  This emphasizes the importance for the West and Japan to establish an independent role in their own destiny.  No matter what happens in the pending appeal with China at the World Trade Organization, The West has learned a valuable lesson in geopolitics as the external industrial nations recognize the importance of rare earth independence.

The uranium sector is enjoying a profitable day as well.  No other area has had to come up from taking a count so many times.  The press has obscured, misrepresented and sensationalized the true story about the role of nuclear energy(NLR) in a modern, industrial world.  The media has relegated uranium mining to the status of selling newspapers and  TV commercials.  The truth be damned.  Imagine when the true story is finally told.  Not once have the talking heads mentioned that reactors that are being built are portable, economical and safe.  The truth can not be suppressed much longer.

Uranerz (URZ) is within 12-18 months of producing yellowcake at a profit even in the less than ebullient marketplace.  Remember that Hathor (HAT:TSX) a mine far removed from production has been bought by Rio Tinto (RIO) who outbid rival Cameco (CCJ).  This emphasizes the undervaluation of our nuclear miners especially Uranerz, which is the next U.S. producer of uranium.  It must not be forgotten that over 90% of uranium in the U.S. is imported.

In conclusion, our sectors and recommendations are once again emerging from their long bases.  Reiterating the long ascendance of these sectors, patience is paramount albeit painful.  We have been advising our readers that this correction in commodities would be far from terminal and represents a classic buying opportunity.

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Disclosure: Long GLD, GDX, SLV, UURAF, URZ and TAS

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The Day Is Coming For Nuclear and Rare Earth Stocks

In Market Analysis, Stock Movers on November 23, 2011 at 9:09 am

Our carefully researched select rare earth and uranium stocks are actually becoming more attractive to hostile takeovers from foreign entities who recognize the true value of our national resource assets. Realize that the Russians and Chinese have donned their cowboy hats and own large chunks of uranium in Wyoming and Molybdenum in Nevada.

Do not be surprised that at this moment of transient disappointment, we may be on the verge of mergers, acquisitions and hostile takeovers. These companies have been offered large premiums at today’s prices, which they have been steadfastly rejecting. Witness the recent bidding war between Cameco and Rio Tinto over Hathor. This week the Chinese offered a 73% premium for Jaguar Mining.

These are signs that the day is coming when the true value will be recognized of these extremely bargain priced assets. Timid investors race from the battlefield even before they whiff the smell of gunpowder. Our chosen sectors of uranium, rare earths and precious metals require patience, whose payoff will result in geometric gains.

The markets have spoken in response to the failure of the Super-committee to reduce spending in Washington with a major decline. This is less than a stellar review for currently elected officials going into the 2012 election. At this point, the marketplace is saying that the “Emperor’s Have No Clothes”. The word emperor is deliberately chosen. Latter day royalty comports behind the scenes in collegial collusion. It is not too far fetched to suspect the unbelievable. The fix may be in.

Isn’t democracy wonderful? When the cameras are on its a different story. There the class struggles continue for the edification of the masses. Behind the scenes, it is buddy time, while the middle class undergoes what is either benign neglect or outright betrayal. The real economic issue is that we are being overly regulated into legislative paralysis. We guardedly hoped for our leaders to come up with visionary vistas. Instead, they have concocted a compote of pap. Washington got there one year payroll tax cut, a few jobless benefits and a few more jobless benefits. This is not what was needed. The impact on job growth will be tepid at best.

Look at what happened to the 2009 stimulus of $800 billion. This did not help job creation. Unemployment went up where today the government publishes statistics of 9.1% unemployment and a rise in national debt to $15 trillion.

The morning after the super committee failure has left investors with a profound sense of disappointment. Washington is proposing a puerile prescription in the wrong pharmacy. Washington could seize the moment to propose truly heroic measures by a simple stroke of their pens to remove the regulatory impediments from essential American resources in the areas of rare earths (REMX), uranium(URA) and precious metals mining(GDX).

There is a need for the fast track approval of our own American critical assets on which our economic future is dependent. We have a national debt of over $15 trillion dollars. Imagine if these U.S. assets in the Earth would be unshackled. The fast track emancipation from regulatory restraints would result in thousands of jobs and go a long way to wiping out our enormous deficits.

The reality is that Washington is aborting job growth and simultaneously going deeper into debt. It is time for us to disenthrall ourselves from hoping that our leaders might seize the day by simply removing the bureaucratic road blocks preventing the development of our country’s mineral wealth. What we got instead was palliative pie in the sky, temporary stalling and political campaign moves for the 2012 election.

As long as Washington continues to treat vital American mining interests with benign neglect, the resultant impact on growth will be modest to say the least. We continue to be a nation in executive denial. Instead of throwing dollars at loyalists that can not be translated into domestic growth, how much more productive use could these monies be better utilized and a truly spectacular return on investment? At the same time it would make this country stronger both fiscally and defensively with a lucrative resource base of precious metals, rare earths and uranium.

What does this mean for investors? Never have so many road blocks been thrown into the paths of uranium and rare earths. Nevertheless, we maintain our buy strategy in the face of this excessive doom and gloom. Sooner or later the realization must dawn on our leaders that these sectors represent true wealth and the most profitable places to invest stimulus funds.

In conclusion, we are aware that the areas of nuclear and rare earths are out of fashion. This is not a time to cash in chips that are going through an artificially induced bottoming area as the result of administrative inaction and the manipulations of the short sellers.

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Short Term Correction in Gold and Silver Provides Buying Opportunity

In Market Analysis, Stock Movers on September 15, 2011 at 6:49 pm

Deflationary Repeat of 2008?

There is fear in the land. Many are asking where to go if a deflationary repeat of 2008 is in the cards. The response to such an event may be an initial decline in all holdings across the board. The market roller coaster may take us down, but if we keep our eyes open, at exactly the same moment we could see a sudden rise directly ahead in certain sectors.

The drop might initially reflect a short term decline in commodity markets which are inherently volatile. Nevertheless, the eventual payoff may be worth the ride. Global debt crisis woes may be causing the recent breakouts in hard assets such as gold and silver as global speculators search for authentic safe havens.

Dollar Vs. Euro: Greater Leeway For QE3

The old game of wheeling and dealing is going on behind the scenes as the G-7 meets. The US needs to have a cheap dollar in order to pay off rising debts. The weakness in the euro has caused a bounce in the US dollar and is only cosmetic. The dollar long term downtrend is still apparent as it attempts to rise above the declining 200 day moving average. The rise in the greenback gives greater leeway for the Fed to institute accommodative measures. Conversely, the Chinese require a rise in the yuan to fight inflation and need access to the West’s natural resources, which they can purchase with their hordes of cash and US treasuries.

Further Government Interventions

Indeed, there may be further interventions and potential easing measures by government and politicians for a short term extension of the ongoing drama, as they dot the I’s and cross the T’s in the publication of some kind of interim bailout.

Our elected representatives will play the old game of kicking the can down the road to the 2012 election. This will serve a major purpose of deflecting blame away from the foxes who raided the hen house in the first place.

They then will be able to shift the blame to the people who are busily paying taxes and government salaries. They will walk away exclaiming that the people have spoken. Little wonder that the public’s belief in politicians is at an all time low.

Bullish On Commodities

My firm maintains our faith in the natural resource sectors and wealth in the ground assets is the place to be. Surely there might be other conventional safe haven plays in such venues as the dollar and treasuries. These countertrend moves are transitory in nature. The bubbles are in long term US debt and deteriorating Western paper currencies, not hard assets and natural resources. Any short term decline in our chosen sectors should rebound violently to the upside.

Investing wealth in the ground is exactly what our Chinese counterparts want to do with their paper assets in the dollar and long term debt.

Look for increased Chinese participation in acquiring mining assets. I believe this is only the beginning in the long range rise in mining resources.

Safe Havens

So where are the safe havens now? Is it in treasuries, which are a promissory note by a government whose fiscal integrity is being questioned? Or is it the US dollar, which is constantly being inflated? Look at your grocery bills and the rising costs throughout the economy. These sectors will surely be punished by Ben Bernanke, a student of the Great Depression.

My firm chooses to regard our natural resource mining sectors as increasingly important safe havens. They represent not only real money, but realistic, non-fiat money of which no more can be manufactured. Do not be diverted or distracted from the path of sound money by bandaids, bailouts, and cosmetic “touch-ups”.

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Summer Doldrums In Gold Miners Concluding

In Market Analysis, Stock Movers on August 17, 2011 at 8:14 pm

One of our favorite mining equities has been the ongoing advance of New Gold (NGD). On several occasions we have made doubles in this ongoing saga since we first highlighted it in early 2009. Click here to see original recommendation. The chart is extremely powerful. This could well be the hallmark of an ongoing powerful advance. It refused to violate its 200 day moving average despite sector weakness.


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This relative strength may be telling us that New Gold may well be one of our leaders as we return to an equity that has shown consistent strength in volatile markets.

They have one of the best cash flows in the business. Additionally, they represent a strong presence in gold and silver as well as copper.

This abundance of riches increases with the little noticed but all important and fully funded New Afton Project in the friendly jurisdiction of British Columbia. The bride becomes increasingly more beautiful when one considers that New Afton is fully funded, permitted and ready to be carried across the threshold of productivity.

New Gold is strategically positioned to profit from this new upward leg in precious metals. They have a strong balance sheet in the hands of experienced management represented by Oliphant, Gallagher and Lassonde, who have a proven track record of building major mining companies.


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Gold Stock Trades has maintained a strong hand on signaling the completion of the basing process in mining stocks (GDX) in relation to gold (GLD) and silver (SLV) bullion prices. Right now it will suffice to alert readers that one of the most salient technical signals is occurring right now-The dreaded death crosses are being transmuted into euphoric crosses of gold.

For the past four months, an eagle eye has been kept on the number $52.50 on the gold mining equities (GDX). That was the line in the sand that we drew for our subscribers. It represented the technical juncture of key support levels, which can be referred to continuously in our published archives. That line held. The basing process is being completed at this very moment.


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Currently as of this writing it is rising above its 200 day moving average, the critical long term trend indicator. This reversal now above the all important 200 day moving average is among the most bullish of buy signals as the death cross of the 50 day which reversed below the 200 day in June now crosses above making a bullish golden cross.


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Many analysts had been concerned as to the effect of the expiration of QE2 on the global financial markets and left the commodity arena. Instead, gold stock trades maintained a steady hand on the wheel. Unflinchingly, we stated it was a short term, positive and characteristic correction, necessary to eventually propel us into new highs. As any runner might attest the sprint forward is preceded by a move backward out of the running block in order to gain momentum for the breakout ahead.

At the same time silver is also breaking its own 50 day moving average to the upside despite a series of increasing margin requirements designed to temper the upward move. This upward move is quite bullish as it may signify that the advance in silver is not to be thwarted. As gold is breaking new highs, silver is just beginning to play catch up.

Careful monitoring of the uptrend is required.

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Perfect Storm For Gold and Silver Prices

In Market Analysis, Stock Movers on July 18, 2011 at 8:50 pm

Originally published on marketwatch.com

“This year, investors have been engulfed by the perfect storm for gold, resulting from the Japanese earthquake and tsunami, Middle East and North African turmoil, credit downgrade warnings in the U.S. and the exacerbation of euro-zone debt fears, amongst others,” said Jeb Handwerger, editor of GoldStockTrades.com.

This chaos has had a positive effect on gold bullion and now investors are finally jumping on board,” he said. “This may be a significant move for several weeks.”

So why should anyone even suggest the possibility for any sizable declines in gold prices?

If the market develops a “parabolic rise” it may encounter “severe downturns,” said Handwerger, who’s also a natural-resource analyst. “Investors in any asset must grow cautious as a trade becomes crowded.”

Tides can turn

Finding out just how much caution to take is a challenge in a market where, apparently, a bullish stance is most common and supportive news for gold prices is plentiful.

But silver is a good example of just how quickly a tide can turn.

For the month of April, silver prices were up 28%, then posted a drop of 21% for the month of May following a series of margin requirement increases that squeezed some investors out of the market. Read the May 31 story on gold and silver.

“The recent spike in silver, followed by a waterfall decline due to the raising of margin requirements, reminds long-term precious metals investors that one must be prepared to accumulate products when there is a panic and sell them when there is euphoria,” said Handwerger.

Read the original article at marketwatch.com

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Gold Soaring In Comparison To Stocks

In Market Analysis, Stock Movers on June 10, 2011 at 8:29 pm

A seminal speech was delivered a few weeks ago by President Obama at the State Department, in it he outlined a radical switch of policy in the Middle East.  Such an error in judgement was made once before when Jimmy Carter suggested that we democratize Iran.  What occurred was  destruction of an ally in the Shah and replacing him with a purported force for democratization in the persons of the Ayatollah and the Mullahs.

Just look at what we got stuck with.  Our present course in the Middle East may be a repetition of this error.   There is no guarantee that what may be thought to be democratic for Westerners, may be counterproductive in a completely different arena.

Far from there being an Arab Renaissance, we may be witnessing the formation of a Islamist Spring, followed by an Arab Winter.  Hope may rise eternal that American style democracy can emerge from a fundamentalist, theocratic mindset.  This may be a thin blanket for a cold night.  Anti American and Israeli sentiments may not be far from the surface of what is though of as a movement toward Jeffersonian Style Democracy.   Suffice it to say, The U.S. may be imposing Western beliefs on Middle Eastern customs and traditions established for over a thousand years.

Such developments may well constitute exactly the opposite of what our strategists are planning.  Black swan anyone?  Turbulence, instability and uncertainty have usually been a prescription for precious metals and natural resources as a safe haven.

From where is all the money coming to pay for all these planned excursions?  Can an already troubled financial system handle additional burdens that threaten to break the camel’s back?

We read about debt limit, budgetary woes, foreclosures, unemployment, Eurozone debt crisis, the possible loss of a AAA credit rating and a myriad of domestic travails.  Shouldn’t we first repair our own home first?  Sound money and a sound fiscal body is vital for our national health.

Interestingly, the precious metals and mining indices are moving higher, while the equity markets are declining showing relative strength breakouts.  The Dow-Gold Ratio has shown a major breakdown through the 8 to 1 ratio.  We are seeing an eerily similar setup to the Great Depression and the 1970’s where paper money such as equities are seen as less valuable than hard assets.  Investors are seeking protection in precious metals due to this dollar devaluation and disappointing economic recovery.  Despite bailouts, record low interest rates and quantitative easing the Dow-Gold ratio shows that the economic recovery has been ineffective and inflationary.

Gold and Silver are showing signs of fortitude during these equity sell offs maintaing its status as an authentic safe haven .  A significant continuation in trend may be beginning where precious metals may move higher while equities continue to correct as investor look to hold real money over paper.  This breakdown in the Dow Gold Ratio signifies major inflation and economic weakness ahead.

The S&P is showing negative divergences between price and momentum an indication of further price decline.  The absence of relief rallies over five weeks in equities and the outperformance of gold indicates investors are interested to hold hard assets going into the conclusion of QE2.  All eyes are on the financial markets as QE2 expires.  Investors are exiting the dollar as well as equities and moving into hard assets.  The market may be signaling future accommodative measures especially if the equity market continues declining.

I invite you to follow my favorite sectors (precious metals, uranium and rare earths) with me on a daily basis with my technical intelligence reports and intra day chart videos by clicking here.

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Gold and Silver Soars As U.S. Dollar Crumbles

In Market Analysis, Stock Movers on April 14, 2011 at 2:46 pm

Gold broke out of its 6 month consolidation and cup and handle pattern. The gold bulls are now in control and short covering should begin to cause an explosive move to my late January target of $1600 on gold and $40 on silver. In late January, gold and silver were in a sell-off and many were predicting lower prices as moving averages were broken. Now we are on our way to the January target in gold of $1600. Many ask what to do as they sit on hefty gains. I have learned through many years of studying the markets that the use of measured moves and technical targets when making a selling decision is quite important and must be followed. Institutional investors sell into strength at overhead resistance and are able to take profits. At those times of extreme optimism is when one must get worried and take some risk off the table. For some people it may be going off margin, for others it may mean raising cash. At times when technical targets are reached, risk management becomes crucial as the most difficult time to sell is when the consensus turns positive. Please stay tuned to daily bulletins on when technical targets are reached.

What is interesting about last weekend’s breakout in gold is that it occurred simultaneously with China raising rates.

In November and December, when China was battling inflation and increased rates, sharp reversals and selloffs occurred in gold and silver to the downside. Now the exact opposite has happened. Excellent price action on negative news from China raising rates shows the yellow metal’s relative strength at this juncture. When precious metals rally and breakout on interest-rate increases that are supposed to slow down inflation, it’s a very bullish sign. This may signal that any rate hikes will not be enough to get inflation under control. Jesse Livermore teaches us that it is not the news item itself that should be monitored, but the market’s reaction to the event is most which is most important. Are we seeing the clues that precious metals are leaving for us? This breakout might cause a powerful 10% move to the upside and a powerful four to six week rally.

Although you may start getting excited with the major gains you’ll be seeing from the late January buy signal and all the Johnny come lately analysts buying gold during this euphoric breakout, I ask you to not get overly optimistic as technical targets will soon be reached in gold, silver, and my mining recommendations. Please reward yourself and take profits when technical targets will be reached. No one gets poor by taking profits.

Many investors have fled the yen (FXY) and are looking for alternative currencies to hedge their positions. The Japanese Earthquake may have many positive benefits to their local manufacturing. For months Japan was concerned about a rising currency and the falling US dollar (UUP) as this affected their exports. Japan was intervening in the foreign exchange markets, buying the US dollar to prevent devaluation. A weak US dollar and strong yen caused major concerns to Honda (HMC), Toyota (TM), and other export giants. This waterfall decline in the yen has not caused any rebound in the US dollar as investors have sold yen, buyinggold (GLD) and silver (SLV) instead. The weakness in the US dollar, a historical safe haven in times of uncertainty, is causing investors to reevaluate that status. This is definitely a catalyst for gold and silver.

The euro (FXE) is reaching technical resistance. Interest rate hikes in China and Europe will not derail this rally in precious metals as inflation is spiraling out of control. Investors are nervous about fiat currencies. Moody’s just downgraded Portugal and may consider further reductions in their bond ratings. If cuts are not made in the US and the debt ceiling is raised, we may see the US get downgraded. This will cause further weakness in the US dollar and rising bond yields. All this may be negative for the global equity markets and will be carefully monitored.

Although investors are celebrating new highs in equities and commodities on Wall Street, leaders in Washington are facing some serious decisions on how to balance the budget. The reckless spending in the government is forcing lawmakers to make some important resolutions about raising the debt ceiling and reducing entitlements. This uncertainty in the US Government combined with the Middle East Crisis escalating has caused investors to seek out the safety of silver and gold. Investors are seeking out the safety of precious metals as gold broke out of its cup and handle pattern and silver races towards my $40 target from late January.

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Precious Metals Breakout on Middle Eastern Turmoil

In Market Analysis, Stock Movers on February 21, 2011 at 9:53 pm

This is an excerpt of what my premium readers received Friday Morning 2-18-11.

We are constantly being advised that the Egyptian military has the situation under control. As the situation develops it’s becoming increasingly apparent that there is something wrong with this picture. The military and the media assure us that the morganatic wedding between the generals and the masses will proceed as scheduled. As the old song goes, “It’s time to wind up the masquerade… the piper must be paid.” Is Iran sailing through the Suez sending a message of who may be trying to gain power during this chaos?

There is a great hunger in the land. The people have access to Facebook and the faces they see increase their rage. They see generals, unnamed and anonymous, promising to give them bread and democracy. However, they see that the truth is otherwise. They are well aware, as we may not be, that the Egyptian military runs beach resorts, banks and bread factories. Their subsidiaries manufacture automobiles, televisions, furniture, washing machines and other myriad necessities. They even have the hubris to control the bottle water industry. The brand is named “SAFI” after one of the general’s daughters. From this gigantic conglomeration of businesses, the generals pay no taxes, use drafted workers and buy real estate on advantageous terms. They are not responsible to report anything to the Egyptian people or to the legislature. The ousting of Hosni Mubarak was merely a placebo to attempt to cover up the fact that the generals have been the power behind the government. Their names are unknown except for the leader, Field Marshall Tantawi, who has often been referred to as “Mubarak’s poodle.” They have established marshal law, dissolved Parliament and cleared Tahrir Square with the carrot stick of eventually permitting democratic elections.

Still unanswered are the protesters with the release of thousands of political prisoners. Such brazen exercise of authority might be justifiably interpreted as a conflict of interest. However, the masses in Egypt as well as the rest of the Middle East are growing increasingly restive.

The old games of propping up despots such as Baptista and Trujillo are in this age where internet is accessible to the men on the street and the students in the universities, is growing increasingly thin.

In Russia, the czar was overthrown only to be replaced by a small minority party called “The Bolsheviks.” In Germany it was the “Nazis” that replaced the Weimar Republic. The Iranian Revolution gave us the “Mullahs” instead of the Shah. The recent elections in Lebanon gave us the terroristic Hezbollah. What is to be the future role of a military that has for the past 30 years played a crucial behind-the-scenes role in preserving its own vast business interests? With Iran moving ships through the Suez the situation remains in flux. This a test of the Egyptian military. The cards have been dealt and Egypt, allowing the Iranian boats through the Suez, will show Israel the military’s hand and whose side they are truly on.

This morning the newspapers said that the military has already “begun taking steps to protect the privileges of its gated economy, discouraging changes… that are crucial if Egypt is to emerge as a stable and prosperous country. Protecting its businesses from scrutiny and accountability is a red line that the military will draw… And that means there can be no meaningful civilian oversight.”

Some other disturbing headlines in today’s papers are:

“Battle Lines Harden Across the Mideast as Rulers Dig In”

“Dozens Reported Killed in Libyan Crackdown”

“Yemen Protesters Face Off for the 8th Day”

“The Committee Formed to Protect Journalists Fights Attacks”

“Egypt Disappearances Raise Concerns About the Military”

What does all this turmoil, restlessness and upheaval mean to us as investors? The message can not be clearer: Precious metals will assume a more salient role as time goes by. It is interesting to note that when tyrants depart they make sure that the gold they stole has preceded them. In Tunisia, the ousted leader Ben Ali made sure that he looted the government gold coffers before he left. In Egypt, Mubarak’s son Gamal was reported to have carried off large amounts of gold. We do not have to be weathermen to determine which way the winds of change are blowing in the Middle East. Precious metals will remain a viable store of wealth and a quasi-currency, especially if these riots turn violent. Already there are reports that protesters were fired upon in Bahrain.

See the video below.

Silver has broken out of a six-week consolidation into new highs and is currently showing incredible relative strength. This morning iShares Silver Trust (SLV) made an ascending triple-top breakout on the point and figure chart at $31. I believe we can start seeing another major leg higher and acceleration of the trend in precious metals. The physical demand is increasing in silver and it could continue its rapid rise higher because it’s in new high territory.

Gold is showing similar strength as it broke the 50-day moving average to the upside. Gold and miners reached oversold levels in January not seen in more than a year and that is exactly where we went long in my premium service.  This interview was recorded at the end of January on thestreet.com.

Now many of the bears who sold out and expected a steeper correction will be returning, pushing gold, silver and mining stocks into new high territory. This is the perfect storm for precious metal investors. The buy signal on January 25 has proven to be a short-term turning point and the break into new highs may look to be one of the best buying opportunities in years. Investors who did not trust the two-year trendline made a major mistake and sold out into the fear. Those times where fear reaches an extreme turn out to be the best opportunities.

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Don’t Be Blinded by Current Equity Market Euphoria

In Market Analysis, Stock Movers on January 10, 2011 at 4:46 pm

Bill Gross, the PIMCO money manager, to whom it is often worth listening, cautioned this week that our nation’s leaders really don’t know where they’re going. They’re mired in the fiscal quicksands of perpetual trillion dollar deficits. I believe, as he does, that there will be more agony ahead after the present euphoria in the equity markets. Thus I say, “Caveat Emptor — Let the Buyer Beware!” Our leaders are paying scant attention to the “Buck” that is being passed on to our children who are going to be stuck with the bills. Today I don’t see anybody around to weep for our infants. As the reporter covering the burning of the Hindenburg shouted in horror, “O the humanity!”

Even though the markets are hitting new highs, don’t be blinded by the current euphoria on equity markets. Bullish sentiment is reaching new highs, surpassing the pre-credit crisis top. Herds are selling their precious metal investments to enter US equities on the hope of a recovery. This is giving an opportunity to precious metal investors to buy gold and silver on sale. As the mining stocks correct and gold and silver make a healthy pullback, precious metal traders who took profits in October and November, when it was overbought and reaching resistance, will now be in a strong position to enter as the price finds support over the next few weeks and reaches oversold levels.

This reckless US deficit spending may reap the whirlwind of higher inflation, a weaker dollar, and the loss of our AAA credit rating. An unintended consequence may be the abandonment of the US dollar as the world’s reserve currency. Already the Russians and Chinese are in a pact to trade in their own money to protect themselves from imminent dollar depreciation.

Time and space do not permit me to discuss the deleterious effects of such items as earmarks, obscene bonuses, municipal government insolvency, and a list of the men and companies that got away with mere slaps on the wrist.

Perhaps well-chosen and carefully followed mining stocks and well-timed gold and silver purchases may offer a shelter from the approaching storm.

I invite you to partake in my free 30 day trial at http://goldstocktrades.com/premium-service-trial where many signals are being confirmed and sent out to readers.

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Watch Out For A Fake Breakout In Gold And Silver

In Market Analysis on December 7, 2010 at 9:17 pm

In my studies of the financial markets, I have found the study of trading tactics to be similar to my studies of military history and sports.

In 329 BC, Alexander the Great, in his mid-20s, led his army through the Hindu Kush mountains to Central Asia to expand his empire that covered 1 million square miles. He was a terrific military strategist who would often defeat his opponents psychologically in order to preserve his army, which for many years marched 30 miles a day across deserts and mountain ranges carrying heavy equipment. Alexander became the most powerful leader in his generation until his mysterious death at the young age of 32.

One of his classic battle strategies consisted of ordering his men to blow the war trumpets and yell their battle cries night after night so that a besieged city would need to prepare for war repeatedly. Eventually, the foes would grow tired of this daily routine and Alexander would monitor exactly when the enemies stopped reacting. As soon as Alexander saw the window of opportunity he attacked fast and hard and would decimate his adversaries.

Similarly in football, a defense will line up at the line of scrimmage often faking a blitz, forcing the quarterback to call an audible. Eventually, after faking a few times, the quarterback lets down his guard, and that’s when the blitz comes and the major yardage loss occurs unexpectedly.

Similarly with the gold ETF (GLD). Last week it broke the August-to-November trend and showed a negative divergence, causing many technical analysts, myself included, to be concerned of a steeper correction. Since my October 4 signal, where I ventured out of bullion into the junior miners, the best way to play the gold market is through trading the oscillators. In August and September, gold had a steady climb higher. This was a trending market. We began seeing some key psychological bearish one-day reversals in October and the gold market began behaving volatile with a false breakout in early November. At that time I focused on my highly rated junior miners as I believed that their breakouts were more secure than the bullion due to the upside volume. After the false breakout we had high volume distribution days and broke the August-to-November trendline. The battle cry from the “bears” was heard. Bulls supported gold but the enthusiasm and volume was nowhere near the previous sell-off. Now we’ve just broken highs, but on recent breakouts there has been a lot of profit taking. This signals an area of key psychological resistance. A lack of volume on the breakout and high volume reversal is signaling that the bears’ battle cry is heard again. Will this be the real deal?

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Will Year-End Tax-Loss Selling Have an Impact on Gold, Silver Investors?

In Market Analysis on December 6, 2010 at 9:40 pm

What has been completely overlooked or not mentioned during this sizable run up in stock market profits, including the precious metals sector, is the imminent advent of tax-loss selling. Every year around this time, as sure as snow falls in Vermont, more than ever, there are reasons why this unmentioned event is apt to at least modestly affect stocks before the year end, especially precious metals. Gold has risen over 18%, silver has shown a rise above 50% on the year. Price are reaching new highs, but can they be maintained? I believe we may see more volatility as a breakout on GLD must be monitored especially as investors who have made impressive gains may decide to take profits before the end of the year. The reasons for this are manifold. Tax-loss selling is an annual event. It takes on added significance in that investors have the shadow of increased taxation looming ominously. So tax-loss selling is apt to be more severe, in view of the possibility that the Fed has already murmured that there may be a tax increase. Not to worry they say, the Fed will try to make it “gradual.”

Already the Debt Reduction Commission is on record as citing the need to increase taxes and saying they agree with the bold steps to save the economy. In 2009, China has dealt with imported inflation from the eurozone and the United States which have both had to essentially print money to save the markets. Both currencies came under pressure this year as investors fled to precious metals. The US and European economies are weakening with high unemployment yet food costs and hard assets are soaring. This current economic situation could exacerbate, affecting the quality of life for many. Right now we are in the midst of a euphoric period reminiscent of the phrase “happy days are here again.” Oddly enough the rosy news is occurring smack in the middle of the holiday season. Do not be misled: tax-loss selling will occur as investors rethink 2011 and the investment challenges ahead.{FLIKE}A most important factor that is occurring as 2010 winds down and 2011 looms is that the Federal Reserve Board is launching a full-on offensive on the American economy called QE2, impacting every household. This action is a latter-day version of the Battle of the Bulge in World War II. The bulge is not in the average citizen’s pocket; it’s in how much it’s going to cost global investors and their portfolios. QE2 is nothing more than a metaphor for the profligate printing of dollars. We can not avoid this having a significant effect on every one of us; it will prompt many to take profits now in 2010 as the price of gold challenges new highs. Many have large profits, and investors should be aware year-end profit taking.

In 2009, GLD moved from a low of approximately $80 a share to $120. In December of 2009, we saw some profit-taking without any warnings except extremely overbought readings. Be careful as this recent break to new highs has not shown much enthusiasm. Most of the excitement has been in silver, uranium, and some top-quality junior miners.

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One of the Best Gold and Silver Mining Exploration Stock U.S. Gold

In Stock Movers on June 11, 2009 at 2:13 pm

Today U.S. Gold (UXG) came out with exceptional drilling results.  As I announced last week before there meeting in New York, that I believed that important news will come out.  Their El Gallo project is quite impressive as they are observing increasing mineralization and they are continuing to explore the property they acquired from Nevada Pacific.  They don’t even know how big that project can become.

They are also bringing out another drill in Nevada where they started actively drilling at the end of May.  They are exploring the outer edges of the Tonkin project to see if there are similar mineralizations as the huge Barrick project.

Rob Mcewen is on a mission to build a huge company, which he has done before.

As the chart shows we are breaking out here and I do believe this trade has an opportunity to make huge gains.

UXG