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Gold, Silver, and Miners Remain Junk-Grade Investments

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Precious metals are technically very close to a major breakdown.

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Silver Chart – Weekly

Silver has a very similar chart to that of its big sister (yellow gold). This shiny metal has the energy of a 3-year-old, making it a very volatile investment. I have touched on the topic of gold and silver being so-called "safe havens," and if you have been reading my work for a while you know that any investment that can move 18-45% in value within one month is certainly not a safe haven.

While it has done well in the past decade and boosted a lot of retirement accounts, the day will come when these things collapse, and most people holding them will give back most if not all the gains they had simply because people get attached to large positions and most do not know when to just exit a position.



Gold Miners Chart – Monthly

This chart gives me cold sweats because I know how many people own gold mining stocks and I know how fast these things can move. If the price closes below the green support line, the bottom could fall out and be very painful for those who get paralyzed by denial and do nothing but watch their accounts lose value week after week.



Precious Metals Investing Conclusion

In short, this report is to show you the very basics of how investments move in stages. It is also to offer a warning that precious metals are technically very close to a major breakdown, which the big money players are watching closely. This thinly traded sector can move extremely fast when everyone rushes for the door.

Don't get me wrong -- I am not saying a crash is about to happen, actually it's the opposite. All I'm doing is planting the idea in your subconscious so that if prices continue to move lower you will take action with your investments. Keep in mind that you can always buy the investment back at any time again if the outlook changes in a week, month, or year.

(See also: Debt-Free Junior Producer Discovers Gold Near Arizona's Most Productive Mine and Are Correlations Between Currencies and Precious Metals Returning to Normalcy?)

Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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