Here’s what to expect from the FOMC meeting later today. In my last newsletter, I stated that one should not be misled by the immediate gold and silver price movements that result from the geopolitical instability around North Korea, as the intra-day volatility in gold and silver prices caused by geopolitics will not change either the short-term price trends or long-term gold and silver price behavior that is ultimately still decided by the global currency wars and the crumbling purchasing power of major global currencies like the US dollar, Euro and Yen. I also mentioned that “since inception of our CIO newsletter, our CIO newsletter portfolio has still easily outperformed the S&P500 by nearly 20% and our benchmark XAU Gold and Silver Index by more than 140% over this multi-year period. To accomplish this, we have not been blindly bullish gold and silver every year, but have been bearish gold and silver assets [when appropriate] and [have] taken appropriate hedges when needed to guard against downturns in gold and silver asset prices.”
Though I speak of general trends in this newsletter, I supply specific strategies to my subscribing members of my CIO newsletter and Platinum membership, and two things I spoke of in the last newsletter came to fruition in my subscription memberships. Last week, we locked in gains on some PM mining stocks and opened up some hedges that would rise in price in the event gold and silver prices fell, as I felt a short-term downward trend in gold and silver was about to happen. Both turned out to be solid moves as the PM (precious metal) mining stocks we sold have since dropped in price and our hedges have risen in price in significant amounts for a one-week time frame.
Furthermore, after North Korea fired a ballistic missile over Japan last Friday, both spot gold and spot silver spiked considerably higher in price, but I did not budge from my hedges to protect against falling gold and silver prices. As I stated above, significant intraday spikes in gold and silver upward or downward must be ignored when one spots a greater short-term trend as these spikes will not stop a short-term trend from manifesting. Learning to discount intraday white noise in gold and silver movements is one of the most valuable lessons anyone holding gold and silver can learn. And sure enough, by the time New York markets opened later that day, gold and silver had already reversed all gains from earlier that day and then proceeded to move lower, as the short-term downtrend we had prepared for began to materialize.
If you’re not following me on my Snapchat channel, please do so, as I post videos in which I discuss financial markets and even life philosophy fairly frequently, if that sort of thing interests you. In any event, I posted on my Snapchat channel last Friday when Bitcoin had plunged to nearly $3,000, that it would not surprise me in the least if BTC rallied off of this point as by no means was the mania surrounding BTC over. And sure enough, BTC rallied very strongly just hours after I posted this opinion on Snapchat last Friday and continued to rally through the weekend.
In fact, even if you had missed my Snapchat videos in which I predicted this event, in the last edition of my newsletter, I hinted at the event that unraveled when BTC retreated back to $3,000 and then once again, experienced a rapid, strong recovery: “traders ha[ve] gone all in on trading cryptocurrencies because of the massive opportunity to make money in the wash, rinse, repeat cycle afforded by massive spikes downward and very quick recoveries in price.” There could have been no better description of BTC’s recent freefall from $5,000 to less than $3,000 and consequent rapid bounce back to $4,000, all in just a matter of days, as a massive spike downward and very quick recovery in price. Regarding the enormously volatile, rapid price movements in BTC, huge movements in price both up and down neither validate or invalidate the multiple concerns I’ve expressed about BTC in this very lengthy, detailed article here. The concerns I’ve posted are completely independent of BTC price movements and remain valid no matter if BTC continues its price recovery higher or if suffers another volatile price drop downward in the future.
Finally, even though gold and silver have corrected significantly in the past week, with silver’s near 4% correction more significant than gold’s correction at this point, again, this short-term movement, although we took protective action before, and in anticipation of, this pullback, this does not change my view that once this correction is over, gold and silver will resume its uptrend again. Furthermore, even though this correction may still have a little further to run before reversing, after it runs its course, a very good low-risk, high-reward opportunity to purchase gold and silver assets will be at hand for those that are seeking some steady returns absent the rollercoaster ride of massive spikes up and down in cryptocurrencies that have been occurring.
At some point before the end of this year to Q1 of next year, I will likely reference this newsletter edition, and specifically the above sentence, regarding the continuing propensity of the majority to miss opportunities when they materialize to buy gold and silver assets at very solid price points. One of the more perplexing behavioral trends in wealth preservation is that only a small minority of people every buy low and have the patience to wait until they are rewarded with much higher prices. Whether stock markets, real estate, bond markets, cryptocurrencies, or gold and silver, most people only become interested in buying after prices have risen tremendously, and have little to no interest at all when prices are extremely attractive, as has been the case with gold and silver assets for the majority of this year. Next year, when I point to the opportunity that was missed by most that I specifically illuminated in this article, I again will review the points I’ve been reviewing this entire year as the main culprits:
(1) the enormous media attention heaped on cryptocurrencies at the current time that has led to people completely ignoring the 5,000-year wealth preservation history of precious metals, and the impatience of long-time gold and silver holders to allow history to be proven correct again regarding the wealth preservation characteristics of precious metals;
(2) the current very negative mainstream media sentiment towards gold and silver, which is complete propaganda, and the inability to the anti-precious metal slant of mainstream financial media as pure propaganda, even though the connection between ownership of media and the global banking cartel is easily identified; and
(3) a current short-term downtrend in gold and silver that has once again caused the proliferation of stories about gold and silver asset prices having topped out already for the year and the consequent tired and predictable mainstream financial media predictions of gold price pullbacks to the $1,000 level and silver price pullbacks to the $14-15 level.
Is there a possibility that gold and silver’s resumption of an uptrend will be delayed until 2018? As I always state, no one has a crystal ball, so any wise person always considers all possibilities, negative and positive. Anything is always possible, but unless the data changes that indicate a greater possibility of this event, it is unlikely. More likely will be that the finalization of this short-term correction will have successfully performed its job. With the up and down churning of gold and silver spot prices and PM (Precious Metal) stocks this year, fatigue has been maximized with most gold and silver assets, and interest in PM assets, due to soaring cryptocurrency prices, is at sustained low levels. Remember, the start of a new bull market in any asset always conspires to take as few as possible with it, along for the ride.
In conclusion, even if gold and silver’s short-term downward trend continues for a little while longer, I still expect resumption of the uptrend after this short-term setback. There is much too much devaluation of global currency purchasing power, being executed by Central Bankers, for the long-term price trend of gold and silver to be permanently altered.