I hope you’ve been following my forecasts for the precious metals. If not, here’s a brief summary of some of the major opportunities you’ve missed …
Gold was trading at the $255 to $265 level. That’s when I turned bullish on gold as the co-editor of Safe Money Report. My recommendation to subscribers: Load up on gold bullion and mining shares. Gold began an 11-year bull market.
September 2008: Gold plunges in the middle of the real estate crisis. Most analysts were convinced it was the end of gold’s bull market. Not me. I stood pat and told my subscribers to buy into the selling panic and increase their allocation to gold from 15 percent of their portfolios to a full 25 percent. Gold explodes higher, soaring to well over $1,000 an ounce.
September 7, 2011: Gold hits a record high of $1,920 an ounce. Less than two weeks later …
September 18, 2011: In Real Wealth Report issue #89 and in my columns in Uncommon Wisdom, I proclaim the high in gold is in and that the yellow metal is entering an interim bear market.
11 days after gold’s record high, I give Real Wealth Report subscribers specific recommendations to hedge their gold holdings. Gold plunges almost $200 an ounce.
|The downside pressure on precious metals is boosting the value of the U.S. dollar quite dramatically.|
October and December 2011: I instruct Real Wealth Report subscribers to add to their gold hedges and exit ALL mining shares. Gold plunges anew.
February 2013: George Soros DUMPS half his gold holdings. Unlike Real Wealth Report subscribers, who already knew gold was in an interim bear market and who hedged their gold, measured from gold’s record high — Soros’ gold holdings lose roughly 29 percent of their value.
April 12, 2013: Goldman Sachs turns bearish gold. Gold has already lost more than $350 from its record high, or 18 percent.
Goldman turns bullish again after mid-April’s devastating gold rout. I say no: Gold is set to fall more.
April 15, 2013: While clinging desperately to their gold, giant gold investors John Paulson and David Einhorn are hit with $640 million in losses.
You can see the dates and all of the twists and turns in gold as well as my forecasts in this chart below. Since I initially forecast gold’s interim bear market way back on September 18, 2011, gold has plunged more than 28 percent while the average mining share has lost more than twice that, a whopping 59.8 percent.
Gold’s Bear Market Is Not Over!
Just look at last week’s action. After a failed rally attempt, gold plunged anew. As I pen this issue, gold is sitting on the next level of support at $1,368. Once that gives way — and it will — gold is going to take another nosedive.
Silver too is getting crushed again. Since its April 26 high of $24.35, silver has lost another 9.2 percent as I pen this issue. All told, silver has plunged an incredible 55.7 percent since its high on April 21, 2011.
Why Are These Oh-So Precious Metals
Collapsing When All Is Not Well with the World?
There are several reasons. And I’ve written about them numerous times. But here are the two chief …
First, from a cyclical and technical perspective, it’s just not time yet for their interim bear markets to come to an end. Nor is it time for the next phase of their long-term bull markets to reemerge.
I cannot give you the precise timing. That will depend upon my trading models and what they show. The models are fluid, and they take into consideration a host of variables and factors.
Second, just as I’ve also been forecasting, deflation has the upper hand right now. Wholesale prices are plunging, as are nearly all measures of inflation.
Most importantly, however, is the severe rot that is infecting Europe. France is now back in recession. Spain is still in trouble. So is Italy. Even Germany is starting to wallow now.
On top of it all are the insane politicians in Europe who insist on raising taxes and implementing austerity measures. Even worse, there’s now increasing talk that the “bail-in” that occurred in Cyprus — the confiscation of uninsured depositors’ money — will be used as a solution when banks in other European countries fail.
All this, and more, is sending European money into hiding. But not much of it is finding its way into gold and silver.
Instead, most of that money is going largely into cash, which is boosting the value of the U.S. dollar quite dramatically, putting additional downside pressure on the precious metals.
For now, if you’re hedged up in gold and silver or speculating on their downside potential, per my suggestions in the March 4 and April 3 Money and Markets columns to buy the ProShares UltraShort Gold (GLL) and the ProShares UltraShort Silver (ZSL) — then simply hold those positions. As I pen this column, they are up 25.4 percent and 46.8 percent, respectively.
Also hold the PowerShares DB US Dollar Index Bullish Fund (UUP), which I also suggested you consider buying in the aforementioned columns. The dollar is about to explode higher again as the euro is on the verge of collapsing.
P.S. If you missed any of the above opportunities, then you also missed many more in other markets that I also cover in detail in my Real Wealth Report. So why not become a member now? It’s the best $89 you’ll ever spend on your investments. I guarantee it. Join now by clicking here.