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Larry here with a quick but very important update on the precious metals. As you may well know from my previous columns, I have been calling for a further decline in the precious metals. Yesterday, gold added to its losses since its high in August of 2011 … and fell to close below a very important sell signal I have at $1,582.80.
Silver has also penetrated an important support area and a sell signal at $27.58.
Bottom line: Both gold and silver should now head still lower. The next key support levels, which I expect will fully be tested in the coming weeks and months, are the $1,380 level in gold, and $20.47 in silver.
Why are the metals falling when there’s so much central bank money printing going on, and so many hot spots around the world? The euro crisis, Cyprus, Iran, North Korea, and more?
The answer is simple and two-fold …
First, as I informed my readers many times over the last 18 months, from a purely technical point of view, gold and silver need to temporarily pull back in order to “refresh†their long-term bull markets.
They climbed almost non-stop for 11 years, and I have never seen a bull market climb for 11 straight years without taking at least a two-year breather before heading higher again.
Second, the crises that I refer to above, the ones that are on everyone’s minds, are NOT bullish for the metals. In the short-term, they are setting off a flight to cash, and a flight of capital to cash, by default, no matter where you are in the world, leads to a rally in the dollar, which is also putting downside pressure on the metals.
Fortunately, if you’ve been following my forecasts, you’re OK. You refrained from purchasing more precious metals, and you also side-stepped the pullback in mining shares, which has been staggering, with the average mining share losing over 40% of its value since the highs were recorded in the sector in September 2011.
What to do now?
First, do not be surprised if you see a short-term bounce in the precious metals. They’ve been hit hard recently. Any bounce that might occur, however, should be weak and brief.
Second, if you are not in gold and silver, or in mining shares, simply sit back and enjoy the further decline that will come. An incredible buying opportunity will arrive in the not-too-distant future. One which will set you up for staggering profit opportunities when gold and silver do bottom.
If you are loaded up with precious metals or mining shares, I would consider hedging. One good way to hedge the gold and silver you own, in physical form or via ETFs, is to purchase inverse ETFs. I like the ProShares UltraShort Gold ETF (GLL) and the ProShares UltraShort Silver ETF (ZSL). For mining shares, I recommend the Direxion Daily Gold Miners Bear 3x Shares (DUST).
Make sure you stay tuned to my Monday morning columns in Money and Markets going forward.
I am keeping an especially keen eye on ALL commodity markets, and I’ll keep you fully informed.
Best wishes,
Larry
Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader.
Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.
{ 44 comments }
I bough some silver for future reference. Now wt I should do, sell it or store it?
Am a small businessman.
That depends on how much you have already. It’s a good hedge to have silver in the case of the coming inflation storm. I am always in the market for more precious metals, but depending on the strategy it could be wise to sell it when it goes up to buy double when it drops.
Larry has been right since I’ve been following him in 2009 and it makes the most sense to ‘back up the truck’ and buy silver at his price signal. Then you’d be getting the best deal, but only if it’s available at that price. I would expect there to be a markup because of its scarcity and anyone with money trying to get as much as they can (kindof like bullets today).
I agree that god & silver will go lower.
It depends on the reason you bought. any physical metal that I would own(have in my possession), I’d consider to be savings and a hedge/insurance against currency devaluation. I would just forget about it and hold it for the proverbial rainy day.
If you are trying to trade your way to a profit (never an easy thing to do) then you may consider looking to sell off on a rebound.
Hold it because you are sitting on a bunch of future dollars or whatever the fiat is.
I,m very to see you at Money & Markets, I’ve been following your expert advice for almost A year now. The BEST part is I’m a life time member of M & M. Thank you Vern.
Larry: I made 2 or 3 mistakes in my letter to you,BAD,BAD —-I’m very happy to hear you moved to Money & Markets. I’ve been following your expert advice now for about a year. The BEST part is I’m a lifetime member of M & M. Thank you. Vern Lynde
Thanks Vern. — Larry
Harry Dent just said metals would go to the lowest price ever?! It’s hard to know what to believe! Any suggestions? Thanks, Dot
larry, i have read that the precious metals etfs have become a proxy investment for the gold mining shares. in other words investors looking to make money in gold and silver are buying the etfs instead of the mining shares. is this true? thanks and keep telling it like you see it.
Sit tight, the flight to the dollar will be short lived, as long the FED keeps printing trillions more of Fiat currency backed by nothing but debt, the dollar like the German Mark after ww1 and ww2 turned in to worthless bits of paper, so shall the dollar. History never lies, just the politicians and Central Bankers do.
store it. Why in the world would you want to sell it? Keep stacking
I have read a number of articles recently that are clearly stating the dollar will collapse and that Central Banks and our Fed. are aware of this and poised for a Cyprus style surprise grab on US banks. If true, should we convert to physical gold ?
Can you comment on this please ?
That’s possible, yes, but not for some time. So owning some gold will be good. But the key is some, not too much. The time however, is not yet here- Larry
Larry, I have around 2500 OZ of silver, and around 100 OZ of Gold. Could you tell me, just about, how many dollars worth of the ETFs that you recommend would I need to buy, to hedge against a lost for this amount? Thanks
Bob
my friends call me ( rj ). i have not bought any gold or silver yeght. after reading your letter iam glad i waited. becouse iam brand new to buying gold and silver coins, i dont know who to buy from. i have looked up quite a few corp, or company,s on the internet. ( question ). who can i do business with, and can i trust them to give me the best selling price ?. i live in southern calif. i got intouch with a comp. called (FORTRESS GOLD GROUP ). they sent me a very nice packit. i talked with a precious metal specialist. he advised me to buy now. no i dident, and again wont until i know better. can you advise me on the comp. i have given you ?. and who else you might suggest i contact. thank you for your time. mr. r.j. wingo.
Good afternoon Larry
I have been a client of yours for the past two years and I really appreciated your webcasts where you look at the graphs of the dollar, major indexes and commodities and gave a technical analysis review of the graphs, are you going to continue these calls. I just renewed for another year and really appreciated these updated webcasts. thank you for a reply
Why do shops have signs out saying “we buy gold” in big display letters. And why do known professionals in the field say gold is being manipulated by the Fed itself to keep the price down???
Hey Larry,
Glad to see you’re ‘back’. Looking forward to your articles and video reports again!
Best to you,
Jake
Thanks Jake! — Larry
As a Canadian investor what tools could I use? Is it worth waiting for a bounce or not before I get into some hedging?
i have read your free commentary for several years now.you have been right on the money.i have followed the metals for many years, thank you for your excellent work,you have been proven right again.
Dear Larry, I don’t believe that the average person is selling their gold, so why should the price of gold keep going down? Is it the multi millionaires steeling our money. Thanks Larry and take care. Bert
Larry – Good to have re-established contact with you. Your comments are much appreciated. My broker here in Australia thinks gold is not a serious investment. However I was just about to invest some more funds – but only in gold shares paying a dividend. So will hold off for the moment.
Kindest regards
Bruce Wilden
GOOD LUCK IN YOUR NEW HOME SITE!
I was one who thought that you had retired and/or had won the lottery. Glad to see you are back.
congrats on the accurate and BRAVE call on gold and ag!!! saved me $, also zsl was a ++ for me . thanks ,your appreciated.
Larry, I know in the past our federal government “called in” gold. I suspect that basically the gold that was turned in was probably United Stated gold coins. Should that happen again – I am wondering if it would be safer to own gold Maple Leafs or Krugerrands instead of the commonly held American gold eagles?
My thinking is that maybe our government could not require us to turn in coins not minted here in the United States.
Sold some gold at 1600 on Monday, I had a feeling the drop was coming and so happy I did, looking forward to buying sometime next year or early if the pricing hit below $ 1000.00
Glad to hear from you again.
Thanks Richard! — Larry
Helo Larr i mist you very much!! nice to see you againe.I live in BC.Canada.dond know how to inest in Silver Or Gold?Anny help I sure wood apreciat it.Thank you in advance,Your truly Rody Leman!!
It’s so great to find you again, Larry!
Will you bring back your CHARTS for the Dow, Gold, and Silver?
I personaly feel a big CRASH coming in the Dow, and a CRASH in Bonds and the DOLLAR and the EURO…all maybe in the next 6 weeks!!. I am a very small investor, and lost a lot listening to CNBC talking suits, and various Gurus!
With my small remaining savings, I’m now considering buying only American SILVER DOLLARS and when you call the bottom for Silver and Gold, I hope to buy a few calls on GLD and SLV.
Your thoughts?
God Bless you, Larry. You have great integrity, and I will be reading your columns and alerts. I have recommended you to a number of people in my same situation.
I hope you will have a brief comment for me.
Gratefully,
Jacki Jackson
Jacki Jackson
Thank you , Larry . I should have done more selling of miners during the last bounce , but as a person who remembers being asked in JCPenneys if I wanted my change in silver certificates or silver dollars , I put more long term trust in PM’s . You are helping me think in terms of swing trades .
Alex
Larry, Over the past year I acquired a considerable number of mining stocks on reccomendation before discovering you and Uncommon Wisdom. I have come to trust your advice as it has been right on. The question is should I hang on to those mining stocks and add when the time is right or look for greener pastures till then
Larry, I only listen to you and no one else. It is so great to hear from you again. I have been future tripping on buying or selling gold and silver because it has dropped and I want to make sure that I am prepared for wwhen the market would move upward again and if I had enough presious metals. Thank you for letting me know the status of that now…It is so good to hear from you again!
Thanks Pat! — Larry
Larry,
So glad to see you back. Missed you input to the fray.
Charles
You’ve got one tough job – holding to your decision against all the others out there is tough. Worked in a trust department from ’76 to ’81 and didn’t want to obligate some of the older accounts to the market. Interest rates were high then and even though our department was ranked in the highest group for performance, the reticence of the customers to go along with the decision to hold cash equivalents was NOT in agreement. I see you in the same light right now. It’s tough and I believe it’s the “greed” in all of us. “Take greed and “fear” and “greed” will win out the majority of the times. Stay with your beliefs – I’m with ya.
Thanks Tom! — Larry
Thank you so much Larry, for your expert advice on the precious metals! Best to you,
Thanks Elizabeth! — Larry
You recomended to buy when it broke 1400 ,,,,now you say wait,,,which?
thanks larry u absolutly right….n target near about ……i make profit……oncemore thanks