What's Next for Gold, Silver and Copper?
09/20/2013 9:00 am EST
The precious metals and the resource sector look ready to go, note Mary Anne and Pamela Aden, The Aden Forecast; here the resource specialists look at the prospects for gold, silver, and copper.
Gold peaked in September, 2011 above $1900, and it reached a second peak a year later in September, 2012 near $1800. It's now to be seen what strength gold can muster.
Once the $1536 level is clearly surpassed, then we could see the $1700 level reached. Keep in mind, if gold fails to overtake $1700, a down pattern will be in force encompassing the last two September peaks.
Gold could reach the highs and if so, it will be turning bullish once again. It would be back above its mega-trend at $1600, and it could then possibly end the year on an up note!
We think gold shares are getting ready to rise from a super bombed out area. Our strategy has been to buy on weakness during the summer months in order to average in at a better overall price.
Keep in mind, just because a market has plunged, doesn't mean a bull market cannot develop thereafter.
A good example was the stock market in 1987. It fell 40% to 50%, but the bull market then carried on and lasted for another 13 years until 2000.
Meanwhile, silver is recouping the best, and it has great potential to soar in a rise that is typical for silver. Silver's bullish wagers rose threefold this past month and it surged 33% from the June lows.
Silver is a precious and an industrial metal—so it is influenced by both. This is why we believe silver is in a good position to soar more than gold in the upcoming rise.
Note how it's just starting to outperform gold again for the first time since its 2011 peak. We recommend physical silver as well as the iShares Silver Trust (SLV).
Meanwhile, copper held firmly above the $3 level and it's been quietly basing and rising from its June lows. It too rose above its 15-week moving average this month and it's now in a rise above $3.20.
Once copper rises and stays above its 65-week MA at $3.44, it'll turn bullish. Expectations of Chinese demand are improving, which is why we have added BHP Billiton (BHP) to our recommended buy list.
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