Since gold and silver broke their cycle lows in early October, they – and mining shares – have been acting weak. Yes, that decline – coming off what looked originally like a bull’s eye forecast – was quite disheartening … and may even indicate new cycle lows in early 2017.
Below $1,000 gold and $13.00 silver. But not necessarily.
Take a look at my most recent AI neural net forecast for gold, for instance. Normally, if a cycle inversion were forthcoming, the chart below would flip. In other words, the green forecast line would invert and show a low heading into early April of next year.
This has not happened. Instead, it now appears – that due to the election – we may be facing a cycle extension rather than a complete change in trend back to the downside.
It’s a bit too early to say, but given how deeply oversold precious metals are …
A. We are either going to see gold and silver bottom soon and get back above their early October levels, which would put the original forecast back on track for a major rally. Or …
B. We are going to see a rally as high as $1,242 in gold to retest the breakdown level, gold would then fail, and a true cycle inversion would then unfold.
The bottom line: It’s just too soon to say which it will be. There’s still much dust-settling that needs to clear the air before I make any new recommendations in the precious metals and mining sector.
So for now …
FIRST, hold your physical gold. If you bought previously at $1,207 and more recently at $1,250, 10% each time, your average is roughly $1,228.50. That means you are underwater a bit but these are long-term core emergency holdings.
Moreover, if you followed my recommendations on these buys for 20% of 20% of the Basic Survival Strategies, your total allocation should be no more than 4% of your entire liquid net worth (20% X 20%).
As long-term positions, if a cycle inversion is coming, I will either tell you to exit, or hedge the positions appropriately with an inverse ETF.
SECOND, also hold any extraneous platinum or palladium you may have purchased, which should be very minor in holdings.
THIRD, for spot silver: Per my standing recommendation, you should now have 5% of your Basic Survival Strategies funds invested when silver hit $16.30 on November 23. Hold. I will let you know if you need to hedge or exit this position.
FOURTH, hold Yamana Gold Inc. (AUY), Goldcorp Inc. (GG) and Kinross Gold Corp. (KGC) – with good-till-cancelled protective sell stops at $2.34 … $11.49 … and $2.25, respectively.
Hold all other open positions and related stops. The December Real Wealth Report will carry my 2017 forecasts and a detailed analysis of the current state of affairs in the markets and in politics.
But suffice it to say for right now, and despite the setback in the precious metals, my macro models – and the sovereign debt crisis as well as the rise in geo-political tensions and even war – are coming together right on schedule.
Best wishes as always …
Larry
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