Gold’s Sneaking Higher. But is it Really Time to Buy? Here’s Your Answer…

Is it finally time to buy gold? Today you’re going to find out…

The market stumbled in December. And it got a whole lot worse as soon as the calendar flipped to 2016. Last year’s leaders have been reduced to sawdust – and the losers are winning again. Just like that, the market’s been turned on its head.

Nowhere has this been more evident than in precious metals…

Look at our old friend gold. It’s gone nowhere but down for more than three years. But now the metal is outshining stocks once again. While the S&P 500 is down nearly 10% year-to-date, the SPDR Gold Trust Shares (NYSE:GLD) has jumped more than 12%.

Parting Ways

Those pesky, washed up FANG stocks are taking a beating. Traders are now turning their attention to metals and miners. We talked about the emergence of ‘BARF’ last week. That’s a tongue-in-cheek name for a motley crew of beaten down miners (BHP Billiton, Anglo American, Rio Tinto, and Freeport-McMoRan) that are coming out of Rip Van Winkle mode.

These four BARF stocks puked up an average loss of more than 50% last year. But this year? They’re coming out of hibernation as investors get skittish…

“It’s only natural that when the stock market starts trading sharply lower, investors will scramble to move their money into areas they believe are safe,” explains our income specialist Zach Scheidt. “During times of stress, many investors see gold and silver as good places to park their money. I’m not a big fan of buying gold and silver as long-term investments. But in an environment like we have today where investors are fearful, I think gold and silver make for great short-term investments.”

BARF has the potential to become a powerful trading theme over the next few weeks as more evidence piles up in its favor. Gold futures continue sneaking higher this month—and the charts are showing gold’s nearing a potentially crucial crossroads.

Here’s what we know:

2016 has been great for gold (so far). But it’s imperative you remember that gold is still technically locked in a longer-term downtrend. The bounce off its December lows has been impressive. But gold now has to contend with resistance at $1,200.

Gold-Spot Price

If we begin seeing signs that gold can top $1,200 and hold, it’ll be time to start thinking about an even bigger move. We could have a ton of new trades playing gold’s big comeback if this run turns out to be more than just a quick relief rally.


Greg Guenthner
for The Daily Reckoning

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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