You probably don’t need me to tell you that gold and silver are fell hard today. You may also recall that I have a theory on why this is happening at a time of greater uncertainty in global markets: some of the world’s main gold buyers are targets in the trade war. I focused on China when I wrote about this, but the same logic also applies to Russia—and significantly, given recent news—Turkey. The pattern seems even stronger now. I can’t say when it will reverse, only that it will.
It won’t surprise long-time readers, but it’s worth stressing that I’m not upset about this turn of events.
Indeed, I’m happy to see that just after I told people not to chase Pretium on its excellent financial results, many are getting a second chance at that stock. It’s not quite as cheap as it was before last Friday’s leap, but it could easily be in the days ahead. Another prediction comes true.
My motto remains intact: discipline pays.
Also, if you read my weekly digest published yesterday, you know that I was planning to act on my shopping list if we got a meltdown—which we now have.
(That email is not available online. You have to subscribe to get my weekly editions of free education, analysis, and commentary.)
However, my technical friends say that with the “psychologically important” $1,200 support level for gold breached, the next support level is around $1,145. It’s around $14 for silver.
I’m not sure how much such numbers should be relied on. What I am sure of is that I don’t want to try to catch a falling safe. I want to see it hit the ground, wherever that is. Then I’ll look to buy whatever undervalued assets are left scattered around.
All of which is to say: I do see the current correction as an opportunity.
And I will take it—but carefully.
I’m looking to get in at prices below those available before recent leaps in stocks like Pretium. Other companies have beaten market expectations or delivered exciting discoveries over the last year. I too may get a second chance at winners that got away from me.
Exciting times!
