Buy Signal in the PM Sector

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Gary Christenson - Deviant Investor

It looks like gold and silver stocks bottomed on Monday, April 21, and that gold and silver also bottomed this week.

Really? The usual reaction is, “the stocks have been hammered, gold is off over 30% from its highs, and silver is down nearly 60%. Sentiment is low, few people are interested, and gold and silver will probably crash again in a few weeks.”

Exactly!

We have been conditioned to expect lower prices in spite of:

  • Massive demand for gold from the Chinese Central Bank
  • Massive demand for gold and silver from the public in both China and India
  • Reduced supply from mining
  • Increasing public demand for both gold and silver in the US and Europe
  • Increasing realization that paper currencies will inevitably be devalued more each year. “Inflate or die” is the central bank mantra.
  • Weakening US dollar and increasing shift away from the dollar by China, Russia, Iran, India, Brazil, and other countries.

And don’t forget that central banks everywhere are openly and excessively printing their paper currencies to encourage inflation, politicians are fomenting wars, and the global monetary system is more unstable every day. Accidents can happen, and those accidents will justifiably encourage people to shift assets to something solid and real – like gold and silver. But, you have heard it all before.

So, listen to an excellent technician: Nicholas Migliaccio does his own brand of technical analysis, and his comment is, DON’T MISS THIS RALLY!!! Why? Price movement, breadth, and volume, and he has the graphs and analysis to support his statement.

Download his pdf here: Precious Metals Buy Signal

Read his blog: Denaliguide’s Summit

Also: Cartel Buster

My view is shown in these three graphs of daily data for the XAU (gold stock index), GLD (gold ETF) and SLV (silver ETF).

 

 

The XAU, gold, and silver look like they have bottomed. Asian demand is strong, and we have been assured by central banks that they will devalue their currencies to create inflation. Gold, silver, and their stocks will benefit.

Consider Nick’s article, ignore the nonsense that gold is dangerous, and buy coins or bars.

GE Christenson
aka Deviant Investor

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4 thoughts on “Buy Signal in the PM Sector

  1. Silver up SPX down ? How long have you been watching the charts ? Go back to late 2011 .
    And it’s a buy right now for gold / silver ? miners ? Gold at $ 1290 – silver barely at $ 19 . You are sure the correction is done ?


    • Thanks for your comment. I’m not sure of anything in the short term, but it looks (to me) much more likely that the S&P is vulnerable and that gold and silver are going up. I don’t know what will happen today or tomorrow, but several weeks out I strongly favor gold and silver up and the S&P down.

      GE Christenson
      aka Deviant Investor


  2. $5 billion will blow up the silver market and $100 billion the gold market. Someone (China, India, Russia, Japan….) is going to blink soon and grab all they can. THEN THE RACE IS ON!


    • You, Bill Holter, and many others agree. I also think it is quite possible, but when? My bet is sooner rather than years away. We shall see.

      Thanks for your comment.

      GE Christenson
      aka Deviant Investor


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