Gold - 13 year cup and handle breakup

[HFWR]

Yeah, the problem with storage of silver, as you point out, is its weight and bulk. Gold can be stored in a safety deposit box very easily.

Hiding PMs is iffy, but a small amount for "insurance" purposes is possibly worth the effort. Lots of ways to do it described on the net.

Any burglars would be too busy carrying out my guitars and laptops to bother looking further.

 

[AudiDudi]

I keep thinking maybe I should sell my maples but lazy, then the price goes up even more. It is starting to be a large hit to MAGI though to sell them.

I havent't bought or sold in quite a while, but I have never given a name to buy or sell.

 

[Koolau]

Any burglars would be too busy carrying out my guitars and laptops to bother looking further.

Now THAT would be tragic. Even worse is they'd sell them for $25 for guitars and $50 for computers 'cause that's what our fences are paying.

We had (literally) millions of dollars of damage when thieves stole copper wire from the lighting system for one of our Freeways. I think they were getting $2/lb for their efforts. Then one guy electrocuted himself on a subsequent robbery attempt. Not sure how to feel about that but at least it put a stop to the thefts. Not so much that drug addicts think about that kind of thing. More that fences do not want to be charged with felony murder.

 

[Stormy Kromer]

I have known many people who have gotten rich by owning a business. I have known a lot of people who became wealthy by owning farms and real estate. I know many more who have gotten an education and worked hard at their profession or trade.

I don't know anybody who got rich from buying gold and selling it later for a profit.

 

[HFWR]

I have known many people who have gotten rich by owning a business. I have known a lot of people who became wealthy by owning farms and real estate. I know many more who have gotten an education and worked hard at their profession or trade.

I don't know anybody who got rich from buying gold and selling it later for a profit.

And crypto. Though I’m told otherwise.

I get holding PMs as part of a portfolio, for inflation protection and non-correlation reasons, but what is the exit strategy? Although I don’t really have an exit strategy for stock or bond funds…

 

[Stormy Kromer]

And crypto. Though I’m told otherwise.

I get holding PMs as part of a portfolio, for inflation protection and non-correlation reasons, but what is the exit strategy? Although I don’t really have an exit strategy for stock or bond funds…

That's a good point. My exit strategy for my stock portfolio is to either sell it at favorable LTCG rate or pass them on with a stepped up basis when I die.

I suppose precious metals could do the same.

I'm not a bit investor in precious metals but I do have a few thousand in silver coins in case the stuff hits the fan and I have to barter.

 

[Koolau]

I don't know anybody who got rich from buying gold and selling it later for a profit.

Neither do I and I'm pro (a modest amount of) gold in the portfolio. It's not all about getting rich.

What I have read suggests that a modest amount of gold in the portfolio (perhaps 3 to 10%) tends to smooth the ride. That is how my PMs have performed for me. For instance, my PMs have most recently kept me just about even in the face of the drop in equities as tariffs have been announced. They performed similarly in the great unpleasantness of 2008.

YMMV

 

[copyright1997reloaded]

I have known many people who have gotten rich by owning a business. I have known a lot of people who became wealthy by owning farms and real estate. I know many more who have gotten an education and worked hard at their profession or trade.

I don't know anybody who got rich from buying gold and selling it later for a profit.

I didn't buy gold to get rich. I bought it because I am rich (well, at least compared to the average). As Spock noted: "I buy gold not because I think it will go up. But because I'm afraid it will."

It is a hedge against what I give a fairly high probability - that there is no way out for the US debt other than what is the easiest for politicians (of all stripes) to do: Issue more fiat currency. My assets are priced in US $, and as such I *assess* my highest risk factor of being severely impacted to be inflation, in terms of what I will be able to buy with my fiat wealth (denominated in dollars).

I will also say what I repeat a lot on these forums - it is not a binary decision. One can own farms and real estate AND gold. And Crypto. And Lead. And so own.

Do I have all my assets in gold - no, nor will I. Will I be taking my gold from the safety deposit box to a dealer any time soon? Nope. My "plan" is I WILL DIE owning it. Will I sell some of my PM miner ETF's if they go crazy. Yep, just like I would with other equities if I think they are getting overpriced. Just like I would if I thought XOM was overpriced (given it is a commodity business).

In the meantime, gold has been delivering a message. The question is whether anyone who could do something will listen. My guess is no.

 

[copyright1997reloaded]

Any burglars would be too busy carrying out my guitars and laptops to bother looking further.

A friend of mine bought a new acoustic guitar. I was shocked when I learned the price.

 

[copyright1997reloaded]

$3300 this morning.

$3400 <- we are here.

 

[Koolau]

$3400 <- we are here.

Is this recent rise part of a "cup and handle break out" or is it a "flight to quality" due to the tariff brouhaha?

 

[copyright1997reloaded]

Is this recent rise part of a "cup and handle break out" or is it a "flight to quality" due to the tariff brouhaha?

Was great technicals, now morphing into something else (e.g. movement away from the US $).

But, there is always a "reason" as to why a breakout occurs, or a breakdown occurs. Tariffs-> Semi's fall, except they topped out last July, way before tariff mania, and semi's usually proceed other market moves.

 

[copyright1997reloaded]

Gold ATM. Melts the gold, determines its purity, sends funds to your bank (China):
MSN

 

[GrayHare]

Gold so historically high relative to other assets such as silver and the Dow tells me it might be overpriced at the moment. I'd be tempted to short it if I knew how. I don't even know if shorting gold is possible.

 

[AudiDudi]

Gold so historically high relative to other assets such as silver and the Dow tells me it might be overpriced at the moment. I'd be tempted to short it if I knew how. I don't even know if shorting gold is possible.

You could short the gold stocks like GDX or GLD. More risky would be something like JNUG. Hre's a short list of gold stocks (not my list!) Gold Stocks List Ranked for 2025 | NYSE, NASDAQ & AMEX

I am not recommending any of these.

 

[Koolau]

Gold so historically high relative to other assets such as silver and the Dow tells me it might be overpriced at the moment. I'd be tempted to short it if I knew how. I don't even know if shorting gold is possible.

I agree that gold has likely gotten ahead of itself due to the tariff situation. Having said that, I've never been a fan of short sales. It can w*rk but it can backfire and you just never know about something as "emotional" as gold.

 

[copyright1997reloaded]

Gold so historically high relative to other assets such as silver and the Dow tells me it might be overpriced at the moment. I'd be tempted to short it if I knew how. I don't even know if shorting gold is possible.

Gold is up about $180 since your post on Saturday. If it were a good short on Saturday, it is an even better short now.

 

[copyright1997reloaded]

Nothing like overseas "tensions" to stir things up overseas (in terms of demand for precious metals). Gold up 2.6% as of now (today), Silver +5%, GDX +6%, GDXJ+6.2%, SIL+6.4%, SILJ +7.1%, FCX (copper) +4.2%. All of the above in US $ terms, helped by dollar weakness today ($DXJ -0.6%).

 

[Koolau]

Nothing like overseas "tensions" to stir things up overseas (in terms of demand for precious metals). Gold up 2.6% as of now (today), Silver +5%, GDX +6%, GDXJ+6.2%, SIL+6.4%, SILJ +7.1%, FCX (copper) +4.2%. All of the above in US $ terms, helped by dollar weakness today ($DXJ -0.6%).

How does that compare to "normal" volatility?

 

[copyright1997reloaded]

How does that compare to "normal" volatility?

Well, the PM miners don't normally move 5-6% in a single day.

My net worth was up 0.6% overall yesterday, almost all of that from gold/silver/miners. This is on a portfolio that is almost 50% fixed.

Yesterday's increase in the silver price was the highest % in almost a year.

Of course today, they are selling lower...

 

[Koolau]

Well, the PM miners don't normally move 5-6% in a single day.

My net worth was up 0.6% overall yesterday, almost all of that from gold/silver/miners. This is on a portfolio that is almost 50% fixed.

Yesterday's increase in the silver price was the highest % in almost a year.

Of course today, they are selling lower...

Thanks. That puts it in perspective.

 

[copyright1997reloaded]

Silver looks like it is breaking out from its massively super long term cup and handle formation. This article is a year old, but the "handle" is coming along nicely.

Silver Breakout Adds to Massively Bullish Price Pattern | Investing.com

Platinum has also been waking up. I've tracked it (buy owning a couple ounces so I have it in my spreadsheet) and it was dead dead dead. But lately, it is moving up up up.

The gold/silver ratio is also finally dropping (quickly), i.e. silver is outperforming gold on a relative basis recently:

Gold/Silver Ratio Price Charts

 

[Koolau]

Silver looks like it is breaking out from its massively super long term cup and handle formation. This article is a year old, but the "handle" is coming along nicely.

Silver Breakout Adds to Massively Bullish Price Pattern | Investing.com

Platinum has also been waking up. I've tracked it (buy owning a couple ounces so I have it in my spreadsheet) and it was dead dead dead. But lately, it is moving up up up.

The gold/silver ratio is also finally dropping (quickly), i.e. silver is outperforming gold on a relative basis recently:

Gold/Silver Ratio Price Charts

I don't know much about cup and handle, but attributing logic or humanity to charts has always puzzled me.

Having said that, I've been a proponent of PMs for quite some time. I bought all mine at the lows back in the early 2000s. For all of PMs gains, one could have done better in the equity markets. Still, I think of PMs a bit like insurance. Insurance policies can be structured to make money with the cash value, but they rarely beat other ways of making money BUT then there is that insurance feature included.

What plays to you see in PMs going forward? I'm just planning to hold what I have.

 

[copyright1997reloaded]

I don't know much about cup and handle, but attributing logic or humanity to charts has always puzzled me.

Having said that, I've been a proponent of PMs for quite some time. I bought all mine at the lows back in the early 2000s. For all of PMs gains, one could have done better in the equity markets. Still, I think of PMs a bit like insurance. Insurance policies can be structured to make money with the cash value, but they rarely beat other ways of making money BUT then there is that insurance feature included.

What plays to you see in PMs going forward? I'm just planning to hold what I have.

I am not a super "technical analysis" kind of person, but I do think certain patterns reflect underlying investor physiology. All one has to do is look around to see that people don't always act rationally. A simple example: if a stock has fallen considerably from its peak, there is quite frequently "overhead resistance" (i.e. selling) as the price re-approaches its prior peak. Why? Because some of those who bought at the prior peak have a physiological need to "get out even". They didn't sell when it went down and can't keep themselves from selling when they become whole.

As for me? I owned a tiny bit of gold in the 90's, and started buying around the 2013 and onward timeframe. More recently (e.g. 2023 onward, I started buying the miners, a little at a time and after pullbacks). I usually combine precious metals themselves (Gold, Silver, ETFS such as GLD/SLV) and miners - together they have climbed to 11% of my overall net worth. Because of this, I am considering this a mostly full position.

Having said that, I think they are heading higher and that we are still in the fairly early innings of this.

We are seeing fundamental changes around the globe leading me to this conclusion.

As with every other investment, you place your money and takes your chances.

 

[Koolau]

I am not a super "technical analysis" kind of person, but I do think certain patterns reflect underlying investor physiology. All one has to do is look around to see that people don't always act rationally. A simple example: if a stock has fallen considerably from its peak, there is quite frequently "overhead resistance" (i.e. selling) as the price re-approaches its prior peak. Why? Because some of those who bought at the prior peak have a physiological need to "get out even". They didn't sell when it went down and can't keep themselves from selling when they become whole.

As for me? I owned a tiny bit of gold in the 90's, and started buying around the 2013 and onward timeframe. More recently (e.g. 2023 onward, I started buying the miners, a little at a time and after pullbacks). I usually combine precious metals themselves (Gold, Silver, ETFS such as GLD/SLV) and miners - together they have climbed to 11% of my overall net worth. Because of this, I am considering this a mostly full position.

Having said that, I think they are heading higher and that we are still in the fairly early innings of this.

We are seeing fundamental changes around the globe leading me to this conclusion.

As with every other investment, you place your money and takes your chances.

Thanks for the analysis. So many times, my PMs have made up for the dips in stock prices (like 2008 and the Tariff brouhaha).


I definitely believe in having some PMs in the AA as PMs have been shown to smooth the ride. YMMV