Buy Gold and Silver 1 OZ 999 NY (XAG=X) in Bull Market Dips – A Rare Significant Opportunity
Buy Gold and Silver in Bull Market Dips – A Rare Significant Opportunity
Back in July, I wrote about gold’s long-anticipated breakout. Gold bugs everywhere rejoiced!
And I suggested the best was yet to come.
After being stuck in a narrow trading range from $1,250 to $1,350 per ounce for a few years, gold had cleared technical resistance at $1,350. And it confirmed the move with a breach of $1,400 immediately after.
Within a month, gold prices were near $1,550 per ounce!
So… what happened next?
Gold Ran Out of Gas
From that point until now, gold has pulled back to around $1,470 per ounce twice.
After the first retreat, gold got some wind in its sails and traded back above $1,500 per ounce. And it hovered around that level until the last week or so.
Now we’re testing gold’s resolve once again just below $1,460 per ounce. So it’s quite natural for gold buyers to begin to question whether they made a mistake.
Of course, they didn’t.
But dealing with money is emotional. And it’s difficult for even the most calm, cool and collected investors to keep their emotions in check when prices drop.
Stay the Course
Yet, as difficult as it may be, you must stay the course if you want to be rewarded for making a sound investment.
Let’s take a look at the last two bull markets in gold to see why
There have been two major bull markets in gold since former President Nixon closed the “Gold Window” in August of 1971: one from 1971 to 1980, and one from 2001 to 2011.
Both lasted for roughly a decade. And from start to finish, both rewarded investors handily for their patience.
In the last bull market, that reward was 650% appreciation… or an average annual return of 65% per year!
That said, during both of the previous bull markets, investor patience was severely tested.
If you look at the chart above, you’ll see there were several gut-wrenching pullbacks. By succumbing to emotion and getting out too early, investors would have missed the majority of that appreciation.
Why the Volatility?
The volatility in today’s fledgling bull market can be easily explained.
Investors are confused. They’re searching for clues as to what will happen next in a number of situations…
- Who will win the tug-of-war between greed and fear?
- Will there be an amicable end to the trade war between the U.S. and China?
- Will geopolitical crises settle down or flare up?
- Will social unrest continue to foment or dissipate?
- What will the impact be of the love affair governments have with easy money, negative interest rates and debt?
- What will be the outcome of the political dysfunction in the world’s most powerful nation?
- What direction will American politics go after November 2020?
All of these uncertainties are weighing on investors… and therefore on the markets.
This uncertainty creates short-term noise. Yes, it’s distracting. But you need to ignore it.
Embrace the Dips
In a bull market, dips are not to be feared; they should be embraced. So consider them buying opportunities.
Depending upon your purpose for owning gold, I suggest you consider the following…
- Wealth Insurance: Buy gold on the dips. Your insurance premiums are cheap.
- Profit: Buy silver on the dips. Historically, the profit potential in a silver bull market is better than in gold.
- Traders: Sell gold at these levels (with a gold-to-silver ratio above 80), and buy silver with the proceeds. You get more ounces of silver for each ounce of gold at the start of the bull market. At the end of the bull market, you’ll want to reverse that trade.
Gold (and silver) represent a significant opportunity here and for the foreseeable future. Take advantage of the dips to “Keep What’s Yours!”
I am convinced that another bull market in gold is underway. The breakout this summer was so resolute.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 17.25.
The projected upper bound is: 17.54.
The projected lower bound is: 16.16.
The projected closing price is: 16.85.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 39.8964. This is not an overbought or oversold reading. The last signal was a sell 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 39.54. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 60 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -39. This is not a topping or bottoming area. The last signal was a buy 11 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.072 at 16.870. Volume was 8,900% above average (trending) and Bollinger Bands were 16% narrower than normal.
Open High Low Close Volume___
16.950 17.019 16.850 16.870 33,501
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.01 17.47 16.18
Volatility: 11 25 24
Volume: 3,350 670 168
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 4.2% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 14 periods.
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