What to Do as Gold Pulls Back
by Gerardo Del Real
Recently — and for the past several years — I explained that for gold to press higher to new all-time highs, it would have to do so alongside record highs in the major U.S. indices, alongside a higher dollar, and alongside a rising Bitcoin price.
So far so good for the major U.S. indices and Bitcoin, not so much for gold as rising rates have proved to be a headwind thus far.
In the short-term I wouldn’t be surprised to see gold pull back to the low $1,800s.
It’s tax-loss selling time, and speculative capital once again has an appetite for Bitcoin with the “experts” once again calling for Bitcoin $100,000.
What to do?
Depends on your risk tolerance, liquidity, and timeline.
What am I doing?
Making money trading around the volatility in my trading portfolio and adding to quality names in the long-term portfolio.
The next golden profit window is opening right now.
The recent selloff in gold stocks is being backstopped by incredibly strong gold miner earnings.
Another gold stock price explosion is coming and now is the perfect time to get positioned.
The “Golden Window” for 1,200% profits is now wide open.
There’s a different approach and a process for each.
I’ll give you a real world example.
Last week Ethos Gold (TSX-V: ECC)(OTC: ETHOF) sold off on a sell call from another group that sent the stock down to oversold levels.
I — and subscribers of Junior Resource Trader — were able to buy that dip and three days later were able to exit out of the position with a 40% gain.
Then I took that 40% gain and allocated it to a new position that’s already up 12%.
In the mid-long term Ethos is a strong buy, as it continues to add to its collection of district-scale gold projects at an impressive pace.
The company is setting up for a spectacular 2021 and I continue to be a happy shareholder. But that’s no reason not to take advantage of the opportunities the market provides.
While everyone is concerned about the consolidation in the gold space and busy watching Bitcoin again, copper has surged to $3.20/lb and zinc is back at the $1.24/lb level.
The surge in copper and zinc prices comes at a perfect time if you’re able to buy the quality names that impatient speculators are either liquidating or simply not interested in.
I’m a contrarian by nature.
2020 has been a great year, but the bulk of my gains this year were made positioning aggressively the past few years.
I’m doing the same with quality copper and base metal names now… and I suspect this time next year I’ll be telling you all about it.
Stay safe out there.
Let's get it!
Editor, Resource Stock Digest
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Resource Stock Digest, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.
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