Market Talk
With the above preamble, I have been pondering if the recent rise in commodities will spill over to a breakout on Gold and silver. On the other hand, the counter view is that they have already run and it may settle down. With inflation seeming to be here, I am forming a view that Gold and Silver may just be ready to breakout much higher.
There is another factor in play in my viewfinder and that is the recent hoopla on bitcoin and other Crypto currency. Crypto is in opposition to Fiat currency, that is those based on Governments like the US Dollar for example. In a very real way Crypto can subvert trust in Fiat and Crypto is being used as an inflation hedge. In fact, I believe that it is becoming a serious threat to confidence in the US dollar. This happened to Gold back in the 30's and the US Fed took action on gold holdings. Could they be planning action on Crypto ? I suspect it may come in the form of higher taxes on Crypto gains. Crypto subverts the US Dollar.
China , for example, has already outlawed Crypto. However, China is exporting Crypto mining computers to outside countries like the US. Again, I have a suspicion that the US officials are waiting to quell the rise of Crypto by imposing special tax increases in Crypto gains. If that happens it could create a Crypto CRASH. And it would seem logical that people that have been hiding their funds in crypto could realize that hard gold and silver is a safer way to store value in inflationary times. Regardless if the above story plays out, Gold and Silver are looking like a place to possibly maintain an allocated portion of a portfolio and "may" breakout higher or it may not decline in value as much as buying power of cash.
These are some Bull etf's that I am looking at :
GLD, a gold etf
SLV, a silver etf
There are also leveraged double 2 X's bull ETF on Gold and the miners as well. These leveraged ETF's are typically only good as a short term trade if the buyer thinks they can predict a near term direction. But, if wrong and the direction goes the other way, the futures decay has a detrimental effect on the rate of decline in etf share value. Yes, double etf's are a gamble on direction.
One such 2X Bull etf on gold is UGL.
I don't make recommendations on this site and recognize every bull case may have an equally strong bear case. One such bear case is to look at the historical chart and a bear would say - hey buddy, already ran! But a counter argument is a LOT of things have already run and if inflation continues at historical rates with energy costs a big driver - gold and silver may just be ready for a breakout run higher. Because I am leaning to a notion that a breakout "may be " coming, I have listed some bull ETF's. However, these are all just theories and any of our theory's about future performance remain to be proven or disproven over time. Sometimes it's more prudent to just watch and see from the sidelines with dry powder. In testing any such bull or bear view, I would say that the word "some" comes to mind whist maintaining dry powder and remaining watchful. Or just stay out and go to work or for a walk, whatever floats your boat. I close this post with a cautionary note to myself. Timing a market is a gamble and can feel like a fool's game gone bad with "too much" or even "any".
So some may wonder at this point, what is Spider Jones saying and doing here???
In full disclosure , Spider Jones is holding "some" GLD and SLV at present and watching and pondering the leveraged gold etf. He may or may not jump in or out some or none at anytime and maybe on a dip.
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ALL in my humble opinion, scroll down and read more..
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