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« Holiday Special: Your Money Back if SK OptionTrader Loses Money | Main | Silver Wheaton's (SLW) CEO Randy Smallwood on Q3 2014 Results - Earnings Call Transcript »
Tuesday
Nov182014

Precious Metals: Timing and flexibility is the key to a successful trade

Background

Gold has not glistened since the summer of 2011 when a substantial rally took it to an all-time record price of $1900/oz.

Since then however it has been a one way trek south punctuated by an occasional weak rally or head fake. Gold’s inability to sustain a meaningful move to higher ground has been damaging to any portfolio that has acquired gold, silver or the associated mining stocks over the last 3 years or so.

Gold’s bull market lasted for 10 years from 2001 to 2011 before its rally came to an end. One can be forgiven for expecting such a rally to continue indefinitely as the same data which supported the precious metals surge were more or less still in place. Gold’s fall from grace can be attributed to many reasons including the attraction of a roaring stock market, resurgence of the US dollar, cost of storage, poor sentiment, etc. Depending on the time that one entered this market determines ones current p/l position.

Those who purchased gold, silver and the producers in the early years of this bull market will be sitting on handsome profits, assuming they had a buy and hold strategy. For those who are relatively new to this sector of the market it has been a roller coaster of a ride with values being in a progressive state of deterioration.

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