Readers have a lot to say about the next buying opportunity in precious metals. That isn’t surprising. So many investors are waiting – impatiently – for the next major move up in gold, silver and mining stocks.
But as I stated last week, the E-Wave cycles tell us to expect another correction in gold first. Now, gold bulls may not want to hear this. Especially not with gold trading back above $1,300 an ounce last week and again today.
The thing is, though, you just can’t force the market to do what you want.
And the message from the market indicators I follow is clear: Expect a better buying opportunity next month, at more-attractive prices.
Still, I’m beginning to see the puzzle pieces falling into place as needed to mark a bottom … and a long-awaited buying opportunity … in gold.
First, retail investors are beginning to lose faith even as gold rallies back above $1,300, as you can see in the chart below. And from a contrarian perspective, that’s music to my ears.
Over the last few weeks, investors pulled $546.2 million out of the SPDR Gold Trust (GLD). That’s the biggest net selling by mom-and-pop gold investors since July. This tells me that the odd-lotters are getting discouraged.
Second, gold coin sales are shrinking in the United States. According to the U.S. Mint, sales are down by two-thirds in the first nine months of 2017 from the same period last year.
Third, hedge funds have been steadily cutting their net-long exposure to gold futures for the past four weeks in a row. The so-called “smart money” crowd usually gets it wrong. And sure enough, they threw in the towel yet again … just before gold rallied back above $1,300.
Taken together, this is great news. That’s because lasting bottoms are built on negative investor sentiment, not bullish sentiment.
I’m hoping for investor sentiment to turn even more bearish in the weeks ahead. That would mark the ultimate bottom … and set the stage for a massive rally in gold just when most investors least expect it.
Bottom line: We’re getting very close to the buying opportunity of a lifetime in precious metals. But we’re not there just yet. Later this week, in my upcoming issue of Real Wealth Report, I lay out the likely timing of the next uptrend in gold, and the best investment strategy to profit from it.
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