Gold & Silver Profit Booking Strategies – Time to Ring the Cash Register?

Stewart ThomsonCore gold positions should never be sold, regardless of your price targets or fundamental scenarios.
Gold is arguably the ultimate asset, so it probably can be viewed as wealth, rather than a tool to get wealth. Key core positions that are accumulated on severe price weakness should be held with an iron hand.
In contrast, trading positions could be “offloaded” at $1411, $1440, $1471, $1523, and $1577.
I have no idea if gold and silver have made an “ultimate bottom” or not, and I really don’t think any wealth is built by getting overly-obsessed with that question.
If gold has bottomed, that’s great news. If it hasn’t, investors can use profits booked now to buy lower prices, with some degree of comfort, rather than selling in terror.

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Submitted by Stewart Thomson:

  1. Another sign that investors are moving back into gold came from Barclays on Monday, as they said exchange-traded products recorded their biggest daily inflow since Jan. 1 on Friday at 5.8 metric tons.” – Wall Street Journal, August 27, 2013.
  2. Please click here now. You are looking at the hourly bars chart for gold. All the “technical lights” are green. The early morning spike to $1411, if it holds, should attract even more ETF buyers.
  3. That’s good news, but it’s very important that farmers harvest their crops, rather than leaving them all in the field. Farmers who bet their whole crop on much higher crop prices can get wiped out.
  4. Likewise, precious metals investors need to book some profits into this superb rally.
  5. Please click here now. That’s the weekly gold chart. I’d like you to make note of the $1411 price area. It’s a key Fibonacci retracement zone, and it could attract some technical selling.
  6. I view the entire $1400 – $1550 price zone as a giant “field of profits”. These profits can only be harvested by investors who bought the “shock and awe” decline that took gold down towards $1180.
  7. Please click here now. That’s another look at the weekly chart. In the fall of 2010, gold stalled in the $1425-$1450 area. A number of technical analysts at major banks have suggested that gold could have trouble in that same area again.
  8. $1471 is another area where sell-side HSR is visible, and the biggest overhead HSR (horizontal support and resistance) on the weekly chart sits in the $1523 – $1577 price zone.
  9. Please click here now. When gold fell below $1500 in April, a lot of investors couldn’t take the pain, and sold positions. They may use this rally to try to sell even more, fearing a drop to new lows. Their actions, albeit wrong in my opinion, could put additional pressure on gold in key overhead HSR areas.
  10. Cheer for a higher gold price, and sell if you get it.
  11. How much gold should you sell? Well, core positions should never be sold, regardless of your price targets or fundamental scenarios.
  12. Gold is arguably the ultimate asset, so it probably can be viewed as wealth, rather than a tool to get wealth. Key core positions that are accumulated on severe price weakness should be held with an iron hand.
  13. In contrast, trading positions could be “offloaded” at $1411, $1440, $1471, $1523, and $1577.
  14. That’s the strategy I’m following myself, and I’ve sold at $1411 this morning. I use my “pyramid generator” on my website to systematically scale out of positions, at key profit-booking price zones.
  15. What about…. silver? Silver has been outperforming gold over the past few weeks by a wide margin.
  16. So, silver investors have more profits than gold investors from this rally. In my professional opinion, the gold chart is more important than the silver chart. If gold surges, so does silver.
  17. If gold falls, silver also falls. If gold reaches a price area where it could stop rising, silver is also likely to stop there. Tactically, I sell silver when I sell gold.
  18. Regardless, silver chart purists may wish to click here now. For short term traders, $24.80, $26.50, and $28 are 3 nice profit-booking zones.
  19. I have no idea if gold and silver have made an “ultimate bottom” or not, and I really don’t think any wealth is built by getting overly-obsessed with that question.
  20. If gold has bottomed, that’s great news. If it hasn’t, investors can use profits booked now to buy lower prices, with some degree of comfort, rather than selling in terror.
  21. Is there a GDX-gold bullion non-confirmation in play? Some investors are concerned that key gold stocks have not exceeded their recent highs, but gold has.
  22. A lot of analysts believe that gold stocks lead gold. That’s often true, but not all the time! Please click here now. You are viewing the GDX daily chart. In early morning trading today, GDX has traded at $30.80, and broken out upside from a small but very bullish drifting rectangle pattern.
  23. AG 47 ad(2)

    Note the position of my stokeillator (14,7,7 Stochastics series) at the bottom of the chart. It’s in “nosebleed” territory, but that’s also where it tends to be, when sizable upside breakouts occur. It can “flat line”, and move sideways while staying above 80 for quite some time, if the breakout creates a trending move to the upside.

  24. Please click here now. That’s the same GDX chart, but I’ve used a red HSR line to highlight key highs in the $32 area. The breakout from the drifting rectangle could provide the technical buying required to push GDX above $32, and create a wave of institutional buying. My next profit booking area of size for GDX is $37. If GDX can get there, many of your individual gold stocks could have tremendous gains!

 

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Big Boys On The Gold Block” report. I’ll walk you through the key price charts for Barrick & Newmont, and define some key prices for short term traders!

 Thanks!  Cheers    St   Stewart Thomson  Graceland Updates

Comments

  1. Debate about when to sell?  OK.  But how to sell?  Nah…. Just call Charlie.  He’ll buy all your metal.  He’s busy working on a lake-to-land fill project :-)

  2. All of my PM holdings are ‘key core positions’ and being held with an iron fist. Try to touch it and you’ll get bitch slapped. Well, at least slapped by a bitch. Some of these technical terms I am unfamiliar with like the one ‘sell’.

  3. I don’t know who this guy is, but I’m the Captain Pilot of this here SilverHawk, and there will be no selling until it is necessary.  Reference Book of Revelation…
    Those who are wise will follow the wise Hawk, for he is closest to Heaven than the rest.

  4. in my view walking away from the paper markets is what is needed. chris duane has said he hopes paper traders lose everything, and i cant say i dont agree in some regard.
    gonna be an interesting day.

  5. Won’t be selling unless some financial commitment makes me sell. And, even then, won’t sell the last 1/4 core.

  6. Actually, went to Friday Harbor, Washington & bought some jewelry.

  7. Ok, so I have a question for anyone willing to help out a newbie.  I have only recently learned about the power of PM so I am behind the curve, especially compared to most of the people on this site, but I was wondering what people here thought was a good amount of PM to have.  I know that the easy answer is as much as you can but I am talking about people like myself that can only afford so much.  Is there a minimum people would recommend?  Just curious and TIA.
    -$$

    • @silversteve   Welcome.  Already you’re ahead of 99% of all Americans just by asking the question, “How much gold and silver do I need?”  The answer is a lot more than you think. 500 ounces of silver at a bare minimum.  Here’s my reasoning.  Gold and silver are money.  The green federal reserve notes in your wallet are currency.  So, in today’s currency how much purchasing power do you require per month?  Let’s say $3000.  How many years do you think the coming collapse will last?  Let’s say 4 years.  So, you’re going to need $3000 X 48 months= $144,000 required.  However, most likely we will see a moonshot in silver prior to the total collapse of the global financial system.  Let’s say gold goes to $5000 and the silver to gold ratio reverts near the historic norm of appx 20:1.  That’s $250 silver.  $144,000/250=576.  So, if you had 576 ounces of silver in your possession right now you would be in better shape than most.

    • I agree that having 500 ounces is a realistic minimum but much depends on this number, such as: the number of people in your family; possible alternative income sources; whether the person gardens, farms, fishes, or hunts; what debts they have; the amount of other preps they have, etc.
       
      “So, if you had 576 ounces of silver in your possession right now you would be in better shape than most.”
       
      Heh heh… indeed you would.  But considering that the VAST majority of Americans do not own ANY silver, other than perhaps a few pieces of jewelry and maybe some plate silver items, even just having a few silver coins, rounds, or bars would put you in better shape than most.  
       
      But I understand your point, UD, and that is about having an amount of silver on which one can live for an extended time period during a SHTF scenario.  I agree that a 4 year collapse and recovery period is not at all out of the realm of possibility.  IMO, a one year period would be a best possible scenario, 2 years is probably an average planning period, and 4 years seems like planning for a worst-case situation.  Worst case planning is good, as it covers the lesser problem times too while preserving a family legacy for whatever comes after that.
       
      While 500+ ounces of silver may seem like an insurmountable barrier to most noobs, it is a goal that one can pursue a little here and a little there.  They don’t have to accumulate it all at once.  Of course, it would be nice if they could, as this is an emergency fund that one really should have immediately at hand because no one knows when the S will HTF.  All this buzz about Syria could easily be a prelude to it and once this situation starts to unfold, it could very rapidly turn big, nasty, and ugly.
       
      Although it might seem like a cop-out in terms of hard numbers, owning all you can of gold and silver really is a good idea.  As in most things, however, this must be balanced with your other needs, such as a reserve supply of food, water, meds, and some way to protect what you have from those who refuse to plan but who will need what you have quite desperately. Desperate people do terrible things sometimes and can be extremely dangerous.  It really isn’t about the stuff itself but about the fact that you and your family may very well need it to survive.
       

    • Thanks for the feedback Ed.  I will keep doing what I do.  

  8. Holding LT.  Not for sale.  
    Could care less what spot paper price is; we realize true value.
    We ain’t seen nothin’ yet…. 

  9. Steve, buy as much as you can with your discretionary income and/or fiat dollars.  
    Now.  While you can still get it.  I believe there will be a day when you will not be able to.  We all will look like the smartest SOBs on the planet.

    • Thanks Dogs (Ugly & Sheep).  Very much appreciate your opinions.  I will keep stacking as much as I can and keep preparing to stay ahead of the storm.

  10. Sell?? Are you nuts???

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