Is it finally time to buy gold and silver?


Gold and silver have been exceptionally weak this year.
Gold is now down 6 months in a row!

From a short term perspective, this is about as bad as it gets for gold (historically).

But here’s a very important point that I want to illustrate. Commercial hedgers are now long gold for the first time since 2000. (Gold began a massive bull market after 2000).

Some people see this as a long term bullish sign for gold. I don’t. Commercial hedgers were CONSISTENTLY long gold during the 1990s while gold swung sideways in a big range. Gold and silver are increasingly showing signs that are characteristic of these long sideways consolidation patterns.

Conclusion

  1. Gold’s short term outlook is bullish.
  2. Gold’s long term outlook is a 50-50 bet.

Here’s another interesting point. Look at the dates from this study. While the U.S. economy was typically in the late-stages of its economic expansion cycle, inflation didn’t go up significantly over the next year.

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2 comments add yours

  1. So Troy, if we don’t see inflation increasing as it usually the case late in bull market , would that mean the fed don’t have to increase rates and thus could be accommodative for a while and help extend bull market beyond your 2q2019 current prediction? Your bear market prediction assumes some higher inflation in the past or doesn’t really influence your reading on other economic data?

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