PPR - Thoughts on Precious Metals While Watching the SLV
Precious metals, gold and silver, have acted quite well in the face of a debt ceiling "agreement," but we do not find this surprising. Yet another tailwind has emerged for precious metals- fear that the U.S. credit rating will be downgraded, if not this week, then at some point in the future.
Yesterday we felt any precious metals positions that were sold on the last push above $39 toward the $40 level could be bought back at the opening on the basis that the expected pullback was baked into the cake. The fact that precious metals are rallying strongly today is some confirmation of this, but they remain volatile. The GLD is your slowest ride, while the AGQ is your fastest, and the DGP and the SLV are roughly similar.
We are keeping an eye on the SLV for a pocket pivot buy point along the 10-dma here, although at this time it would need to trade uncharacteristically high volume for the remainder of the day. Generally, the bulk of the day's trading volume in the SLV is logged earlier in the day, so sustained volume into the close that exceeds 59 million by the close with the SLV closing up above the 10-dma (currently at 38.98, roughly) would likely be a pocket pivot buy point for anyone using such a buy point as a point at which to add following the initial buy point down in the 35-36 price area.
Thus, we will be watching the SLV closely for the rest of the day, but at 7:50 AM Pacific Time, 3:50 PM London Time, there is no guarantee a pocket pivot buy point will emerge by the close.
That said, some members have elected to only pyramid their positions in precious metals based on purely price action, averaging up.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.