What Happens To Gold And Silver Next? Look Out Below?

YAWWWWWNNNNNN.... when it comes to gold and silver,, stilll.

so lets look at price, I am going to keep this super simple, if I have time, Ill do 2 charts tonight

GOld-

crappy price action, no doubt, as of late. but lets put things in perspective -

Year to date return- 11%. Remains in an uptrend, positive.

Shorter term, price action looks like DEATH. That said, we have been here MANY times before, where we come to the edge of the cliff, experiences heavy selling and then gold rebounds.

For the most part, gold has been range bound and choppy.

In the short term- the number you want to watch for is, as of this writing, 1262.80. Watch and see if that price point is breached lower, if it is and has follow through to the down side, that would increase probabilities that gold is going lower from here. Allow the range to resolve itself.

We have been here many times before and bounced, maybe this time it doesn't, or it does and this just sets gold up for a rebound back to the higher end of the range.

be patient and watch.

Silver-

very crappy price action for most of the year, choppy, range bound and go no where.

That said, over a longer term time frame, about almost 6% for the year. Still in an uptrend but barely and clinging to its gains.

In the context of a shorter time frame, the key number to watch in the coming days, weeks, is IF 16.34 gets breached to the down side. Just as with gold, if that price area is taken out to the downside and then followed through with more selling, silver prices are on the high probability side of going lower.

Just as with gold, we have seen this before and we have been here before and silver has caught a bid, bouncing higher. Once again, watch and see what happens, maybe it holds again, maybe not.

The element of time is going to be a big factor here as well.

yup7676

Been following you here for a long time now, and quite respect your opinion. As I've come to see the big picture, Gold and Silver have been around as a Financial Tool for over 4000 years, and has worked because it's hard to attain, it's a limited quantity, and has many uses and attributes. So at the end of the day, the Snake Oil remedies like paper money and this new block-chain things will all pass away, and we'll ultimately go back to the staple to determine true value and do commerce with. And when that happens, I'm wanting to be on the right side of fence to provide for my family. If everything stays GREAT, and we continue to see new highs in the Stock-Market every week, I won't need my gold, but if/when we fall back to reality, won't I be protected from what's going on in Venezuela right now?

At this point, I'm 100% invested into Gold and Silver, so if you don't mind, please analyze my position and provide me with your take on it.

thanks so much for your insight,

Gary
SILVERTIP

Hey Gary, I appreciate your kind words.

WELL-

I understand things are crazy in this world. I can see it and lot of it doesn't make sense, speaking in regards to economic conditions and financial markets.

One thing tho, that I have learned from markets over the years and have experienced is that no matter how BAD things get.. and they have been bad or gotten bad, all world markets eventually come back, all economic crises eventually find a solution... in one shape or another, even when things get really ugly and nasty, those extremes find a way of finding balancing out.

With that thought in mind, I don't subscribe to a prolonged economic disaster or any sort of financial Armageddon that puts everything back in the Stone Ages. It simply wont happen and we have enough evidence with history showing us that we always come back from no matter how BAD things get.

I think, Gary, you being 100% in gold and silver is really risky, dangerous and I would be worried if gold and silver keep going lower or even just stay flat. Money needs to grow and it simply wont in this this current cycle for gold and silver. I would not go all 100% in gold and silver, Gary.


I know its bizarre that ICOs, cryptos are everywhere and all the rage. But thats how markets work. Buyers come in, believe in something, believe its worth something and keep pushing the value higher than anyone thought possible.

I realize the vast majority the public, around the world, probably cannot grasp how their country stock exchanges are hitting all time highs, all the time. But again, thats how markets work. Buyers show up, they believe its worth "x" amount and they keep buying until there are no more buyers.

But again, it is all about the cycles, trends we are in. For now, we remain in a big overall world market uptrend for equities, I think only a handful of world markets are in decline.

Right now is NOT the time for gold and silver. At BEST, they are flat, while equity markets run higher. Silver really looks like it wants to roll over and go lower, as it really is starting to struggle unless it can once again pull up. Gold is doing better but not by much. Sometimes, these metals run in tandem, so seeing silver is so weak as of late, will that weakness in price spread to Gold?

So, I mean, I think personally you are carrying way too much risk in being 100% in gold and silver. I would be very cautious and worried that they go lower before higher.

In terms of price action, speaking from a technical stand point, there is NOTHING showing that gold and silver are ready to launch to the moon. If anything, from a technical stand point, expressed by price, that PMs could go lower, silver in fact is very weak technically and might be getting ready to go lower soon if it cannot work itself higher in the coming weeks.


There is only ONE thing that I can think might help gold and silver and who KNOWS how it plays out. No one has a crystal ball, I certainly don't and even if I guessed into the future I would be wrong I am sure. I look at everything from a stand point of probabilities, accepting that nothing is set in stone, nothing is concrete and certain.

I am going to mention this because of some Options action in the market and you can refer to a few older posts a few weeks back to find what I mentioned but I will say this-

Based on MARKET data, from the options market, I would say since Septemberish of this year, there have been several large speculators who have been taking speculative positions in the forms of options for either PM ETFs or in the futures markets for gold.

These speculative option bets are being placed far into the future, a most recent call/put option spread I believe was for all the way into 2020.

The point is this tho- clearly someone is betting on a surge for gold and silver, in some cases speculating that prices for gold and silver will either return to their previous historical highs or even possibly exceed them.

NOW, that said, please keep this in mind about these options- They are highly speculative. They are being taken out now because by being priced way into the future (some are for around late 2018, 2019, 2020), their cost to obtain is SUPER CHEAP. In other words, by getting these options now, these speculators are managing their RISK in case their bets don't pan out. They are still limiting their down side.

The other warning or caveat is sometimes the options markets are wrong and often it is a cheap way to speculate, a cheap form of insurance. The bottom line is by using options, these market speculators, despite making a bet for higher prices, they are being careful not to lose everything.

I highlight this Gary because everyone should ALWAYS find a way to manage their risk, whether they are a big fund or a retail investor. Circling back to your being 100% in gold and silver is risky, considering how they are acting for now. I would HATE for anyone to lose their shirt because they put 100% of their money into one certain asset.

I hope Gary that you re-consider your allocation of 100% gold and silver. SHOULD gold and silver run higher, there will be plenty of chances to get in it and ride it back up but right now there is really no point in being full invested in PMs.

Gary, what are you going to do if you a big, unexpected expense arises?

Thanks again :)

This is a big problem when you leverage.

Okay Gary, here's the deal. Right now you're losing $800 a month just paying off the interest to the loan or Line of Credit.

Even if Silver or gold are even you're losing money... AND if they only gain small percentage you're STILL losing money. If that "pro" you speak of was working for the institution that loaned you the money SHAME on them!

You're not going to like what I'm going to say but this would be my advice.

Sell... take your losses and your lumps as right now you're pouring good money over bad.

If you want to take advantage of leveraged investing then you have to run the numbers.

Let's say you're borrowing money at a HELOC rate of around 3.5% or a general loan of 5%. Your rate of return HAS to be greater than the rate of interest they're charging. As I mentioned earlier a solid S&P 500 ETF it will yield around 7%. You pay off your 5% loan and would still have 2% profit. If you wanted to be a bit more aggressive you could look into stocks that provide dividends. Look for something that would have a potential for growth along with a decent dividend such as 3-4%

While I understand that with monthly interest only payments of $800 yields a large sum of money, silver or gold would still have to rise quite a lot for you to get out from under water.

Heads up-

Silver- 16.34 has been breached with authority after being probed repeatedly these past few days.... the end result is the lower prices in silver we are seeing right now

Gold- 1262.80 BARELY hanging on here...LOD was 1263.20 today,,,

these shorter term break downs can lead to momentum growing faster on the down side and might result in yearly lows being tested if this keeps up.

WE have been here before, prices come to the far end of the range, break and then the selling dries up. Maybe it holds here for gold and silver this time, maybe it doesn't, there is no way to say for sure in markets, other than to say right now in the short term context, gold and silver are very weak.