Tuesday , 10 December 2024

U.S. Dollar Index to Plunge; Gold & Silver to Soar! Here's Why

So says Bob Kirtley (www.gold-prices.biz) in edited excerpts from his original article* entitled Gold And Silver Prices Set To Rocket To Higher Ground.

 Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.

Kirtley, goes on to say, in part:

The U.S. Dollar Index to Drop Dramatically

The chart below shows the 50dma crossing over the 200dma in a downward motion, which is sometimes referred to as the ‘cross of death’ as it usually signals that a negative move is upon us. We now expect the dollar to drift lower and test the ’72’ level on the U.S. Dollar Index.

(click to enlarge)

The demise of the dollar and other fiat currencies brings with it an increase in the price of hard assets. Over the last decade or so, our hard asset of choice has been the precious metals sector, mainly physical gold and silver and they have served us well….

The chart below shows that gold prices have been through a lengthy period of consolidation following an all-time high formed in 2011. We draw your attention to the 50dma which has crossed over the 200dma in an upward motion which is sometimes referred to as the golden cross. Also note that gold returned from its recent high to take tea with the 200dma, which is a real good starting point for its next rally. The technical indicators are turning up from a low level and the MACD looks likely to form its own crossover suggesting that gold prices are about to move higher.

(click to enlarge)

Bullish on Gold & Silver

Our own opinion is that gold and silver will rally from this point through to the early part of next year, making now a good time to accumulate more of the physical metals. Once above the $1800.00/oz level, gold will be well positioned to make a run at a new all-time high. We also expect silver prices to catch the wind and move to much higher ground. The gold to silver ratio currently stands at 54, if this ratio were to contract, as we suspect it will, then silver prices could well and truly explode, just as it has done in the past. So stepping out and acquiring a few more ounces of silver should also serve you well.

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Not Bullish on Gold Stocks (Producers) 

Investing in a small selection of good quality gold producers is the preference of many investors…but the moment we are not enthusiastic about them as they appear to lack the ability to keep pace with gold as evidenced by the HUI (the gold bugs index of UN-hedged gold producers) which is trading at a disappointing 485.56. Please don’t be put off by us though, as many of our peers see the mining sector as a good buying opportunity at these levels.

Who in the world is currently reading this article along with you? Click here

Prefer Options

As speculators we look for a ‘leverage’ return when placing a trade and so our attention is focused on the options sector. If we are correct in our premise that both gold and silver are going higher, then a few well-thought out option trades should provide a portfolio with a real boost. Well that’s our plan and we are sticking to it, as they say. You will need a strong stomach as the oscillations can be a tad nerve wracking and you will also need the discipline to close trades on a frequent basis as options are not a ‘buy and hold’ for the long-term vehicle. Time is of the essence, with most options expiring worthless.

Conclusion

Finally, move out of the folding stuff as and when you can and acquire some hard assets in a sector that you are comfortable with. Be prepared to work your socks off as none of this is going to be easy, it is going to be a white knuckle ride with violent oscillations being the order of the day. If you can find the time to do your own ‘due diligence’ then you should survive and even prosper in the coming years, so please give your own financial situation the attention it deserves….

*http://www.gold-prices.biz/home/gold-and-silver-prices-set-to-rocket-to-higher-ground.html

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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