Weekly Update: Gold, Silver, Bitcoin – 02.24.2017

Greetings fellow amateurs,

What a week! Attention has turned squarely to the conflict between President Trump and the obsolete media. Between the CNN leaks from Project Veritas and the Trump administration restricting access to a media briefing, it feels like only a matter of time until the next escalation. I’m not sure what the media can do apart from send in a writer from the Huffington Post to hand out Russian flags at CPAC in order to create some mega hot leads for reporters at Vox and Salon.

Honestly, it’s rather amusing as a distraction attempt. Never mind the announcement that President Trump is stepping it up even further against human trafficking and child sex slavery. It might be awkward for the Washington Post if something were to further come to light concerning their newest insider columnist, John Podesta. Never mind the $600 million CIA contract given to Washington Post owner Jeff Bezos’s primary venture Amazon.

It feels like we’re now waiting on another shoe to drop. Something wicked this way comes, but in the meantime perhaps we’ll see even more noteworthy action in a few true core assets near and dear to The Amateur Society:

Gold

gold-d-02242017

Well, we got that momentum break above $1,240 that we were looking for and tapped $1,260 before ending the week slightly lower. This breakout seems like it should stick and put $1,300 and then the election night highs at $1,340 back in play. Although a move back below $1,220 would look bearish, each day that goes by without a waterfall drop on no news builds the case that we are in a new regime for the precious metals even if they haven’t come unglued just yet. I’ve heard some forecasts for dramatic upmoves, and the catalyst of the Fed failing to raise rates next month could present such an opportunity. With the Dow hitting new record highs at a clip that hasn’t occurred in several decades, the failure to raise could potentially turn the ongoing head scratching into hair pulling. I’m looking for the momentum in gold to continue next week, but it’s worth noting that gold stocks didn’t follow suit today. Unsurprisingly, the correlations between stocks, bonds, the dollar, and precious metals have been even more irregular recently, so let’s continue to be patient and see how next week goes.

Silver

Silver D 02242017.png

Let’s check in with 2017’s best performing asset according to Finviz:

Those paying attention may decry this list as incomplete and that there is something that has performed even better. More on that in a paragraph. After spending a healthy amount of time at the $18 level we got a solid yet still modest break in silver in the final two days of the week. The precious industrial and monetary metal has now managed to claw back almost all of its post-election losses. Checking the daily chart shows us that silver has a tendency to cascade up when it gets going. We are experiencing a technical breakout on long term charts at these levels, and even though technical analysis is admittedly imprecise in an era when the click of a mouse can invent money and paper shorts out of thin air it may bring some more attention to silver. I continue to recommend buying physical silver at any price. Call up Renaissance Precious Metals and make sure this is part of your portfolio before the inevitable runaway.

Bitcoin

Well amateurs, it looks like we have our answer about whether we would get all time highs before or after one more cascading drop. I saw a price of $1,215 overnight with bitcoin approaching parity with gold. The wick on the candle that touches back down to $1,100 is rather suspect as the lowest price I see on Coinbase is ~$1,160. These charts are an amalgamation of prices on many different exchanges, so there can be some discrepancies in extreme prices. The catalysts out of China that led to the gratuitous smackdowns haven’t deterred the cryptocurrency enthusiasts. I’ve argued in the past that they are actually productive steps. To reiterate: China’s New Silk Road requires a financial solution to bring the billions of unbanked people who live along its routes into the economic picture. Bitcoin is the likeliest method for accomplishing this and I’m glad I did my research and got in when I did. Even though there’s a distinct chance of a runaway to $1,400 – $1,500 it’s hard for me to recommend chasing the price, but if you don’t have any bitcoin and have done enough research to convince yourself of bitcoin’s viability then it’s worth grabbing a small initial amount. The next upmove looks like a sooner rather than later proposition perhaps after some additional profit taking at all time highs.

Conclusion

We live in interesting times. Those who self-educate, see through the lies being perpetrated, and prepare a portfolio that contains real money assets will be in the best position to survive and thrive moving forward. Don’t feed the trolls; especially when the trolls are in the institutional media. The truth will out.

Disclaimer: These are one amateur’s fallible opinions. Holding any asset is risky, so do your own research and make your own investment decisions.

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