Long-Term Precious Metals Bull Market Isn’t In Danger [SPDR Gold Trust (ETF), Market Vectors Junior Gold Miners ETF]

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September 24, 2014 11:33am NYSE:DUST NYSE:GDX

gold and silverLarry Edelson: Oodles of readers want my head for turning temporarily bearish on gold again. They say I flip-flop too much.


They say I don’t know whether I’m coming or going. They think I’ve always been dead wrong on gold.

But the bottom line is this: I have nailed every major turn in the price of gold and other precious metals, including …

 The high at $850 in January 1980 and gold’s subsequent 20-year bear market.

 The precise bottom in September 2000 at $260 an ounce, just five dollars above the final bear market low at $255.

 The initial blast off that carried gold to over $1,000 an ounce by 2008.

 The 2008/2009 meltdown in all markets, when I told my subscribers to increase their allocation to gold from 15 percent to 25 percent, when gold fell below $700 …

 And they enjoyed gold’s next huge move up, which saw it explode higher all the way to $1,921 in September 2011.

And if that’s not good enough …

 On Sept. 18, 2011, I screamed from the rooftops that gold’s bull market was temporarily over, and that a three-year bear market would set in.

xxxxx
Don’t fret. Don’t worry. The long-term precious metals bull market isnot in danger of going way.

I told my readers to get out of gold, or hedge. Two weeks later, I told my readers to exit all mining shares.

Fact is, I don’t know a single soul that has a better track record than I do in the precious metals and miners.

Yes, I did believe gold bottomed late last year at $1,180 an ounce. Yes, I did tell my followers to start getting their toes wet this past June. And I did believe that miners too had bottomed.

I was wrong. Though gold and mining shares did rally a tad, they essentially went nowhere. If you had acted on my forecasts and more importantly, traded lightly, you shouldn’t have suffered any major losses, and indeed, may have even made a little money.

Now, here are some more facts:

Fact #1: As I said last week, regardless of what the near term may bring, the long-term outlook for gold has not changed.

It’s still subject to powerfully bullish forces that will ultimately drive it to $5,000 an ounce and beyond — a massive flight to quality from investors around the world, due to the madness of bankrupt governments, rising geo-political conflict and more.

Fact #2: The extension of the bear market in the precious metals also opens up profit opportunities – to profit as the precious metals and mining shares decline. More on this in a minute.

Fact #3: As the precious metals and mining shares decline into early next year to their final lows, you will have even more opportunities to profit …

As the die-hard bulls get washed out of the markets, allowing you to scoop up the many bargains that will become available.

So how should you handle a further decline in precious metals and mining shares?

First, don’t expect them to completely crash. It’s far more likely that you will soon see a rather large bounce, one that could take gold, for example, back up to $1,258.50, $1,280 and as high as $1,300 …

While silver could bounce back to the $19.28 level or even to $20.

Second, following any decent bounce, expect gold to move down to the $920 to $970 level early next year, and silver down to the $15 area, perhaps even a bit lower.

Third, use the upcoming bounce to hedge any precious metals holdings you do not want to shed, for whatever reason, by purchasing an inverse ETF, such as …

 ProShares Ultra Gold (GLL) or PowerShares DB Gold Double Short ETN (DZZ) for gold.

 ProShares UltraShort Silver (ZSL) for silver.

For any mining shares you do not want to exit on a bounce, for whatever reason, I would hedge the holdings by purchasing shares in Direxion Daily Gold Miners Bear 3X ETF (DUST).

I can’t give you more specific hedge instructions.  But suffice it to say that I think it would be foolish not to hedge any holdings you don’t want to exit.

So watch the market closely and use any upcoming bounce to get some hedges in place via the above referenced inverse ETFs.

And most of all, don’t fret. Don’t worry. The long-term precious metals bull market is not in danger of going way. It’s intact. Gold is going to head well above $5,000 an ounce … silver to over $125 — my minimum targets …

And select good quality mining shares are going to double, then double again, and then double again, spinning off hundreds and even thousands of percentage gains in the years to come.

It’s virtually guaranteed. The world is a complete mess. Washington is bankrupt. Europe is even worse than bankrupt.

The rising war cycles are painting a very bleak picture going forward. Civil disobedience and war in Europe. Civil and international war in the Middle East.

War between Russia and Eastern Europe and the U.S.

War between China and Japan, also dragging the U.S. military into conflict in the Far East.

Rising civil discontent in virtually every form in our own United States.

All of these forces are etched in stone. They are coming. Revolutions. Rebellions. Social chaos within country borders and between country borders.

Between the rich and the poor. Between religions. Between capitalism and socialism. Between the public sector (government) and the private sector (citizens and private business).

Some astute observers, like Pope Francis, already know it’s here. He said that much in a speech in Italy a week and a half ago. “A piecemeal World War III,” he called it.

Thing is, right now it may seem piecemeal. In a year or two, max, it won’t be so piecemeal.

It will engulf every corner of the globe, every country, every market.

The world will be aflame.

Larry EdelsonWritten By Larry Edelson From Money And Markets

Money and Markets is a free daily investment newsletter published by Weiss Research, Inc. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. We cannot guarantee the accuracy of third party advertisements or sponsors, and these ads do not necessarily express the viewpoints of Money and Markets or its editors.


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