Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Healthy Correction For Gold Miners And Precious Metals In Secular Bull Market

Commodities / Gold and Silver 2011 Feb 15, 2011 - 01:44 PM GMT

By: Jeb_Handwerger

Commodities

Best Financial Markets Analysis ArticleOne of the most difficult decisions an investor must make is to determine if a turning point is of short term or long term consequence. The markets give subtle clues to students of the market of impeding danger and times of caution. A stock's reaction to news items may tell us the authentic underlying strength. In November and December gold, silver and mining stocks sold off China raising rates and now in February shruggs off the news.


Is that telling us the correction may be over? A break above the 50 day moving average will bring back the previous gold rus Often times in a secular uptrend news items are planted causing a short term shakeout, which often in retrospect are great buying opportunities. I have learned overtime it is important to look at a long term weekly chart and review the trend. If the trend is a normal healthy linear trend than most times a correction becomes a major buying opportunity.

Gold miners have put in a short term bottom under $53. A cross above the 10 week or 50 day moving average on volume could

forewarn of a break into new highs. After touching support and reaching oversold levels traders came in and entered the secular bull trend. Mining executives and fund managers believe gold and silver are in a long term bull market. Many of these precious metal majors are sitting on huge amounts of cash and may become the new income stocks as they increase dividends to shareholders in 2011. The large miners are undervalued relative to other sectors and may have a strong 2011 as their profit margins increase. I expect new highs for the large producers and for them to outperform.

Gold has bounced at our previous buy signal under $130 and has reached a short term overbought condition after reaching multi-year oversold levels. The first bounce after a significant correction may push stochastics into extremes and should be given less importance. I believed gold at under $130 or $1325 spot was an ideal buy as it reached long term support and oversold levels. We must remember that gold is in a secular uptrend and these trends must be given strong weight when making decisions. I believe gold will reach new highs as central banks will be reluctant to raise interest rates in light of high unemployment and mounting debt fears. I expect further debt issues to resurface globally and for investors to seek out real money-gold and silver. Look for gold to hold the 50 day moving average pushing a lot of bears who were expecting a steeper correction to occur, move back into gold causing it to reach new highs.

Using a simple set of trend channels one can assess the risk at key market turning points. For four months while investors were chasing gold at resistance my readers were becoming aware of key sectors and stocks which doubled and during that time especially in uranium and molybdenum. Many investors left precious metals for riskier assets in energy, rare earths and base metals. Now gold and precious metals mining stocks seem to have found support and are making a leg higher despite fears of rising rates in both the USA and China to combat rising prices of basic goods and commodities. Investors are realizing that interest rates will not keep deter this economy on steroids. President Obama does not appear to be cutting spending as our deficits soar into new record territory and we may be setting ourselves up for QE3 if yields continue rising.

Grab your free 30 day trial to my premium service at http://goldstocktrades.com/premium-service-trial

By Jeb Handwerger

http://goldstocktrades.com

© 2011 Copyright Jeb Handwerger- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in