Do This And You Won’t Have To Worry About A 2008 Scenario
Of course no one can predict when that turn will come, so I continue to recommend the same strategy that precious metals should continue to be accumulated for the simple fact that you are buying undervalued assets. View these purchases as saving money that is outside the banking system, and therefore immune to those types of risks that we saw in 2007 and 2008.
The same logic applies to the shares of mining companies. If you are prepared to invest in them and accept the risks, accumulate those you have concluded are good value. The good ones will turn higher when the precious metals themselves turn higher.
Collapse In Gold Open Interest
While we wait for the precious metals to reverse their downtrend and turn higher, I’ve been watching for clues that might indicate the turning point is near. And there have been a couple of important ones recently. One of those clues was the collapse in Comex gold and silver open interest over the past several days as the December contract approached first notice day. I didn’t check the historical records, but the collapse in open interest is the largest I can ever recall. I take it as an indication that the market is sold out, which itself might be saying that a turn is at hand.
Another clue is today’s action, which I see as very important. Is it telling us something we need to know? You bet it does, particularly given how undervalued the precious metals are at the moment. One thing I have learned from my five decades of experience in trading and investing is to let the market tell its story, and then listen to what it is saying. I do this by watching price trends, so take a look at this chart of the spot silver price, Eric.
Silver Breaks Out Of Downtrend!
Today the price of silver closed in both London and New York above a long downtrend line that goes back all the way to June. This event over time may prove to be a big deal.
