Every time gold and silver prices have a good run, there tends to be a proliferation of sensationalistic articles that state something to the effect of “gold ready to break out to new highs now” or “silver about to surge tremendously”. To such sensationalistic articles, I always say, pay no attention to them, because no one really can ever predict the exact date when gold will surge by $100 and silver by $3 or $4 in a single trading session, as these events are likely to happen at some point in the future when most people are not expecting it to happen, and not during a time when everyone is expecting it to happen. It’s good to be optimistic whenever gold and silver have a good run, but it’s also good to stay rooted in realism as well, so one can spot risks when they appear instead of being blinded to such risks by excessive optimism. Furthermore, more often than not, a proliferation of such articles often marks a short-term reversal in prices. Certainly gold and silver have had a good run since the last week of December into the New Year, such that our CIO newsletter has gotten off to a solid January, up by 7.53% in January.
Still, risk is risk, and when risk rears her ugly head, much better to heed it than to ignore it. In fact, based upon my analysis of global gold and silver markets, I announced on my Snapchat channel (yes I’m posting every day now) two days ago on 25 January (24 January in the West), when gold was still trading at $1,210 and silver was still at $17.20 in Asia that morning, that there “was significant risk” to gold and silver prices that could very well manifest as we closed this month and headed into February. That very evening in New York, just several hours after I posted this warning on Snapchat, spot gold and spot silver closed down by its largest single-day decline since 21 December. I reiterated the following day on Snapchat, the morning of the 26th in Asia (the evening of the 25th in the West) that even though many thought this gold pullback was just a temporary one to the $1,200 mark or slightly lower, and that gold would rebound off support at $1,200, that there was still considerable risk to spot gold and spot silver prices right ahead. So for those that have supported me on Snapchat, thank you for following, and I hope you heeded my warnings if you are long gold and long silver.
It’s always good policy to hedge for wild volatility in gold and silver prices when one spots the telltale signs that volatility is ahead. Of course, it doesn’t always play out 100% of the time to one’s expectations, but hedging is important in being able to maintain core positions for long-term trends without being chased out of one’s core positions. In fact, for our subscription Platinum Members, we opened up calls in November into the US Presidential election that we closed out at a 24%+ gain, then opened up puts on gold and silver assets for most of November that we closed out in December at 47% gains, a weight-adjusted 15% loss, and additional 47%, 59% and 48% gains (we additionally opened up multiple successful hedges for our CIO members as well). Then we stood aside for the last couple of weeks, even returned back cash in some positions over the past several days, and opened up another aggressive hedging strategy for our Platinum Members last week that is now up 30.9% (and a more conservative hedge for our CIO Members). And the truth of the matter is that we are still not out of the woods right now and there are a number of reasons that this pullback in spot gold and spot silver prices could grow even larger.
However, even though this short-term pullback may still run further, don’t lose sight of the bigger picture. While it’s important to manage the short-term picture well during very volatile times, for the longer-term yearly view of 2017, we are still very bullish on the prospects of gold and silver assets. Despite this, it is important to remain grounded and to respect all risks when they develop. Not managing them can cause unnecessary anxiety. And in the event the risks you may see coming don’t materialize in the fashion you believe it will, one can easily close out the hedges quickly with little damage. However, if the risks do materialize, then these hedges can help quite considerably in maintaining balance in one’s portfolio. In other words, once you spot risk developing that may develop into something very large, even if short-term, there is no good reason not to execute a hedging strategy.
Lastly a word about our new Snapchat channel, skwealthacademy. Moving forward, it is very likely that this will become the channel that I update most frequently, possibly continuing to provide updates on a daily basis. Why? Snapchat is a million times more convenient than YouTube, as I don’t have to find time to make it to the studio to record videos when I want to post timely information, as I did earlier this week about the coming pullback in gold and silver prices! Additionally, I don’t have to spend hours editing a video before I can post it on YouTube.
Furthermore, Google and YouTube have been censoring a lot of great content recently on channels that have been providing real news on the global currency wars, including mine, so the fact that they have chosen to block important information from reaching those that have subscribed to my channel makes providing information via Snapchat moving forward an appealing option. I hope to convert all 29,000 of my YouTube subscribers over to Snapchat. I also like the informality of Snapchat a lot as well as whenever a thought pops into my head, I can immediately send it out. Snapchat does have some drawbacks however, so I’ll probably still keep posting YouTube videos in the future even though Google/YouTube will likely keep censoring them, especially as the global war on currency intensifies. For now, I have delayed the BTC article, and in its stead, replace it with this one. But we’ll send out the BTC article soon, so stay tuned.
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