Gold: The Next Bull Phase

05/06/2015 9:00 am EST

Focus: COMMODITIES

Mary Anne & Pamela Aden

Co-Editors, The Aden Forecast

It’s just a matter of time before gold embarks on a new bull market rise; we’re not there just yet, but buying on weakness continues to be a good strategy, forecast resource experts Mary Anne and Pamela Aden, editors of The Aden Forecast.

2015 is a good time to be buying more gold and it’ll possibly be the last year to get the best value.

It doesn’t really matter why gold is bouncing up from the base. More important are the currency wars taking place and the competitive devaluations.

Demand says savvy investors are looking for value in this market today. Central banks went on a gold shopping spree in 2014, in the second highest year of central bank net purchases in 50 years.

Most interesting is the crossroads gold is at right now. Once gold fell below its 23-month moving average in 2013, it confirmed a bear market, and it continues bearish today.

This moving average is now lower than the January high. If the high is surpassed at $1300.70, gold will then be in what we call a bullish C rise—and historically—C rises are the strongest leg up in a bull market.

On the downside, gold is firm above $1185 and the final support level is the low at $1143. If this is clearly broken, then the bear market is alive and well.

Meanwhile, silver would be poised to rise further once it crosses above the $17.20 hurdle. It could then shoot up to the $18.40-$18.50 level, the 65-week moving average and the January highs. This is the key turnaround point. A clear close above $18.50 would then turn silver bullish.

For now, we recommend keeping your gold shares, and if you aren’t in, buy on weakness. We have two royalty companies; Royal Gold (RGLD) and Silver Wheaton (SLW).

And we have the gold Market Vectors Gold Miners ETF (GDX) and the iShares Silver Trust ETF (SLV). We also own the Central Fund of Canada Ltd. (CEF), which is a mix of gold and silver in Canada.

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