The Breakout In Gold Has Arrived For The Bulls (GLD, GDX, XLE)

Gold’s break out to new highs has very bullish connotations going forward. It puts the odds squarely in favor of a C-wave continuation.

I will go over expectations and cyclical structure for a second leg of the C-wave in tonight’s report for subscribers.

For those of you thinking about getting side tracked by a meaningless daily cycle low that is coming due, let me tell you from bitter experience the one thing you don’t want to do is lose your position at the beginning of a C-wave or C-wave second leg.

At this point the daily cycle corrections aren’t profit taking opportunities. That will come as we near the end of the C-wave.

At this time a daily cycle low is a last chance opportunity to get invested.

Don’t forget in bull markets and especially during aggressive C-wave advances the surprises come on the upside. Daily cycles can and often do run exceptionally long as a C-wave starts to gain momentum so losing one’s position in an attempt to “time” a short term correction can potentially cost one many percentage points. It’s just not worth the risk. It’s time to heed “OldTurkey”  advice.

I have no doubt this will be the greatest bull market that any of us will ever see in our lifetime. Since November of `08 the precious metal sector has been doing everything but hit investors over the head with a pipe to let us know this is the leading sector of this bull.

Miners are the only sector exhibiting massive accumulation.

Market Vectors Gold Miners ETF (NYSE:GDX)

Compare the above chart to other sectors during this bull and you will see where the smart money has been positioning.

PowerShares QQQ (NYSE:QQQQ)

Energy Select Sector SPDR (NYSE:XLE)

 
Financial Select Sector SPDR (NYSE:XLF)
 
 
Retail HOLDRs (NYSE:RTH)
 

These are just a few sectors, but the picture is the same no matter where you look. Steadily declining volume. Only miners are showing heavy accumulation.

I’m even seeing analysts touting the energy sector as the place to be. It’s not unusual to see traders flock back into the leading sector of the prior bull, but if history is any indication energy will not lead this bull. You can see from the chart of (NYSE:XLE) that energy, just like every other sector, is showing no signs of accumulation. Let’s face it the supply and demand fundamentals for the energy sector are now impaired and will be for years as the world cycles through multiple on again off a gain recessions and stubbornly high unemployment levels.

The only sector with improving fundamentals is the precious metal sector, which will benefit from governments ongoing attempts to “print” prosperity. It will not work, but the blizzard of paper will drive the secular gold bull to amazing heights before it’s finished.

Once the HUI & silver join gold, platinum and palladium at new highs the entire precious metal sector will move into a vacuum with no overhead resistance.

That is going to be incredibly bullish for the sector.

-Written By Toby Connor From Gold Scents    

Gold Scents is focused primarily on the secular gold bull market.    


    

Investors have turned to gold ETFs as a safe haven during the recent stock market turmoil.  They offer a great way to protect you against risk in your portfolio during uncertain times. We have put together some other ETF options for your viewing below:          

LONG:          

The investment SPDR Gold ETF (NYSE: GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.          

The investment ETF (NYSE: GDX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.          

The Funds ETF (NYSE: GDXJ) investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index (the “Junior Gold Miners Index”). For a further description of the Junior Gold Miners Index, see “Junior Gold Miners Index.”          

The objective of ETF (NYSE: SGOL) the newly listed shares is to reflect the performance of the price of Gold bullion, less the Trust’s operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in Gold as well as diversify their Gold holdings.          

The investment ETF (NYSE: UGL) will seek to replicate, net of expenses, twice the performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.          

The investment ETF (NYSE: DGL) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold Excess Return. The index is a rules-based index composed of futures contracts on gold and is intended to reflect the performance of gold.          

The investment ETF (NYSE: DGP) seeks to replicate, net of expenses, twice the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.          

The objective ETF (NYSE: IAU) of the trust is for the value of its shares to reflect, at any given time, the price of gold owned by the trust at that time, less the trust’s expenses and liabilities. The trust is not actively managed. It receives gold deposited with it in exchange for the creation of baskets of iShares, sells gold as necessary to cover the trust’s liabilities, and delivers gold in exchange for baskets of iShares surrendered to it for redemption. The trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.          

SHORT:          

The investment ETF (NYSE: DZZ) seeks to replicate, net of expenses, twice the inverse of the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.          

The investment ETF (NYSE: GLL) will seek to replicate, net of expenses, twice the inverse daily performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics inverse to the index. It may employ leveraged investment techniques in seeking its investment objective.

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