Precious Metal Prices Collapsed

Last week will go down in the history books as one of the most violent and volatile weeks in stock market history. I hope you survived it.

Precious metal prices collapsed throughout the week, especially on Friday. I’m curious to see next week’s COT report. I bet the commercials reduced their short positions dramatically.

The coronavirus continues to expand. Half the cases are now outside of China. In the last two days, there were just 36 new cases reported in China. I think things are getting better there. Unfortunately, the virus is just getting started elsewhere.

The COVID-19 virus appears to be most dangerous to people over 60-years old. One report said no children under the age of nine have died. So, it seems less risky for children. 

Watershed Moment: As bad as things are, there is some good news for precious metals. The one-two punch of a global pandemic and crashing stock market has jolted precious metal demand. Last year the US investor wasn’t interested in gold or precious metals. That is no longer the case – precious metals are flying off the shelves, especially silver. 

  • I believe we will look back at the recent events and realize this was a 9/11/2001 type moment for precious metals; a sudden and then sustained increase in demand.
  • Precious metals desperately needed the average investor to get involved. Now that they are, it should launch us into the next stage of the bull market.
  • Prices could go a little lower first but with the increase in demand, any near-term price disparity should be corrected.

TOP 10 SPECULATIVE MINING STOCKS: I will soon be updating my list of favorite speculative miners. There are some incredible bargains out there, and I’m going to have to do my homework. I’ll pick the best of the best and revise my list for next weekend.

GOLD CYCLE INDICATOR: The gold cycle indicator finished the week at 85 and within minimum bottoming territory. Depending on the market’s reaction to the Fed, I see the potential for a bottom in gold as soon as next week. With the massive spike in volatility, it’s best to be patient. The gold cycle indicator could reach maximum bottoming in a reading of 0 (zero) before this 6-month cycle bottoms. 

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