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Gold & Silver Breakout

In the September 11 interview with Eric King of King World News, I mentioned that a number of credible analysts were saying that gold and silver looked like they were about the have a technical breakout to the upside.  Gold’s and silver’s price action since have confirmed those predictions.

In the interview, I warned long-term investors to be prepared for volatile price action because such a move will bring technical traders to the gold and silver markets.  These traders will not be there because of concerns about a declining dollar or the stability of the world’s financial structure, but solely because of the price action.  When they perceive the move to the upside to be over, or they have hit their price targets, they will bail out, thereby adding to the metals volatility.

So, as prices march higher, investors need to be prepared for some sharp corrections.  This is not a prediction that a correction is imminent, only a warning that somewhere in this move there will be sharp downside moves.  Considering the present state of financial affairs worldwide, physical gold and silver investors need to hold on and definitely not try to trade any intermediate moves.

Over the years, during various precious metals bull markets I have seen investors attempt to trade intermediate moves only to be left on the sidelines as the metals marched high.  Many times they accurately picked intermediate tops but failed to get back in before prices moved up again.

 As the old, seasoned veteran said in Reminiscences of a Stock Market Operator, “It’s a bull market.  Get your position and hold on.”

3 Responses to “Gold & Silver Breakout”

  1. Alan Duboyce

    I am just a small Silver investor. Right now I have 600 oz’s of silver bullion bars, rounds, & coins. My goal is to reach 1000 oz’s before I can’t afford to buy anymore due to rising prices. I keep all my silver in a well protected safe. How will I know when it is time to sell, and should I sell it all, or just 80% of my silver? Thank You

    • Bill Haynes

      Through out my investment career, I’ve always said it’s easier to know when to buy than when to sell. For now, I’m going to give you an short answer as to when to sell your silver; but, in fact, a long answer is in order and should be the topic a blog post. Sell your silver when you find something that you want to own more than the silver.

  2. mark mcdonald

    Sell your silver when the Dow/Gold ratio, (the DJIA divided by the price of gold) goes to 1. In other words, the DJIA and the price of one ounce of gold are the same, then sell your silver.


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