The gold and silver negativity is suddenly back on financial TV after euphoria just a week ago — you know what that means: Time to buy!
I picked up some more gold, silver, and mining shares on this AM’s flush. We’ve come a long way back from this morning’s sell-off. At one point we were down $20, now we are only down $6 on the day. Gold has now tested the $1370 level twice and survived; silver has tested $28 twice. Both of them are developing well-defined uptrend channels. I think the metals will bottom either today or Monday.
One of the overhangs has been the anticipation of a Chinese rate hike. That, and the fact that many people had a nice run in the metals meant profit-taking ahead of year-end. But everybody is talking about a Chinese rate hiike so how much of a surprise can it be? I say you buy on Monday whether or not there is a rate hike.
All of this sets up for a nice buy point some $50 or so off the recent high in gold. The last three corrections have been swift in violent: $74-$100 flushes in a matter of days, only to reverse higher. I think we will see a similar thing of this correction, most of which is probably done.