It’s been quite a long downtrend in precious metals. As you know, gold peaked in August of 2011 breaching the $1900 per ounce level!
Since then, it’s been a slow and steady (sometimes not so steady) ride down. But over the past year, the drop in gold prices has accelerated quite a bit.
Take a look at the chart…
As you can see, gold has continued a downward spiral from over $1,600 per ounce, to trade all the way to under $1,200 (twice). Looking closely, you can see the two low trades occurred in July of 2013, and just this past January.
Fortunately for gold bulls, it appears as if the two sub-$1,200 trades have signaled a very strong technical trend reversal with gold putting in a “double bottom”. That’s led to the pretty stellar reversal of the downtrend (blue line on the chart) in a very short period of time.
That always seems to be the case over the past few years…
Long-term trends, once reversed, have a pretty hard rebound higher off a bottom. Just look at stocks, real-estate, and now precious metals for proof.
But can this precious metal rally continue?
Even if the run doesn’t continue at it’s current pace, I’m going to suggest we’ll see a general continuation of this trend with both gold and silver prices continuing to rise. Over the next couple of months, the market may give potential precious metal investors a better entry point with a short-term pullback to calm down the pace of price acceleration.
But overall, if you look back at the chart- precious metals can move with great speed and for quite some time (in either direction)… meaning we could see this move higher last for quite some time.
That makes getting in a small position now wise. You can always build on your positions as the precious metals continue to rally, or add to your position on a pullback…
To get the most out of your investment dollar, there are plenty of great small cap and penny stock gold and silver mining companies seeing a surge in their stock price. Remember, many of the junior miners and exploratory companies have their stock prices tied directly to the value of the precious metals... much more so than large companies with complex hedges in place and multiple mining operations.
That can give you a much more “pure play” on the movement in precious metal spot pricing.
With that said, if you’re looking for a penny stock to buy that is set to benefit from the continued up-trend in gold and silver, consider picking up some shares of a junior gold or silver miner now.
Keeping you one step ahead,