A Golden Opportunity in the Works
In the midst of Tuesday’s big equity market rally, the Federal Reserve came out with a rather optimistic outlook on the U.S.
The Fed’s words were good for stocks, and they were good for the value of the U.S. dollar vs. rival foreign currencies, as the central bank basically was signaling that there was no need for additional monetary stimulus right now. One sector that the Fed’s words didn’t help was gold.
Gold prices fell sharply Tuesday, and again Wednesday, as traders exited the yellow metal and the stocks tied to its fortunes. The chart below of the SPDR Gold Trust (GLD) shows that the price of gold bullion now has fallen below both the short-term, 50-day moving average as well as the long-term, 200-day moving average.
The sell-off in gold mining stocks has been even more pronounced than the selling in the spot price of the yellow metal. The chart below of the Market Vectors Gold Miners (GDX) shows the tumble that’s taken place in the sector over the past two weeks.
The potential for a rapid decline in gold and gold mining stocks is something I wrote about in the special report, The Complete Guide to Gold Exchange-Traded Funds. In that report, I explained that when gold comes under the pressure of a correction, we usually see some very aggressive selling that takes prices down very fast, and in a very big way. We’ve already seen this situation occur in March, and there may be more downside to come for gold.
The upside here is that when gold prices finally do settle in, there is a very high probability that we’ll see a big rebound in the value of the yellow metal and the stocks tied to its fortunes. This situation is because the fundamental factors pushing gold higher still are very much in place.
If you’d like to find out more about these fundamental factors, and if you’d like to discover how the Fabian Gold Plan can help you make money in gold and gold ETFs, then I invite you to check out my Successful Investing advisory service. A new subscription to the newsletter also gives you access to my special report, The Complete Guide to Gold Exchange-Traded Funds.
I don’t want you to let the next buying opportunity in gold slip through your hands, but here’s a word of caution — I will not be giving out a new buy signal in gold here in the Alert.
The only way to find out when the time is right to jump into gold is to become a subscriber to Successful Investing.
Don’t let this golden opportunity pass you buy. Subscribe to Successful Investing today!
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
