When the time comes …

In a few minutes, I’ll review last Friday’s important market action.

But first, hopefully, you’ve been following my warnings and forecasts and didn’t get caught up in what’s turning out to be one heck of a slide in gold and silver …

With gold once again failing to take out overhead resistance at $1,362 … then plunging back below initial support at $1,330 …

In a downright bearish pattern.

With cycles pointing down hard into early October, if gold closes below $1,310 on any trading day … or pierces the most recent low at $1,305 …

Then a gold and silver crash could easily unfold, taking gold down to at least $1,250, if not lower, to the low $1,200s, even the mid-$1,100s.

You can’t say I didn’t warn you. Over the past several weeks, I recommended you hedge any heavy gold and silver holdings you may own with inverse ETFs, such as ProShares UltraShort Gold, symbol GLL, which is already popping nicely higher …

And for silver, ProShares UltraShort Silver, symbol ZSL, a double-leveraged ETF, seeking to deliver twice (2X or 200%) the inverse (or opposite) return of the daily performance of silver bullion in U.S. dollars.

But I also want you to be prepared for what’s coming next. For all along, I also gave you another warning: That this current pullback in the precious metals is the best thing that could happen: It’s chewing up and spitting out the weak longs … and giving savvy investors like you the chance to buy when risk is far lower.

That said — when the time comes — say around $1,250 gold … I suggest you exit any of the above hedges you took on … and be ready to start buying physical metals, with my tips on how to buy gold bullion coins (same advice applicable to silver bullion coins).

I actually prefer ingots and bars over bullion coins, because the premiums over the actual value of the gold are far less. But the majority of my readers and followers prefer bullion coins, so here are my recommendations …

The Best and Worst
Bullion Coins to Buy

First, as to where to buy and from whom, I prefer buying online from the Hard Assets Alliance, at https://www.hardassetsalliance.com.

I know many of the folks behind the company, it’s financially solid, the metal is insured through subsidiaries of Lloyd’s of London, and you can store your coins or metal at any one of six very secure locations, including four overseas facilities.

Plus, you can set up a trust account and even an IRA for your purchases. And with bars, you can even set up monthly purchases under the company’s “MetalStream” program.

Now, to buying bullion coins. When investing in gold, not only must you watch where you buy, but what you buy as well. You can get dramatically more for your money every time you buy, simply by buying the right investments and avoiding the wrong ones.

With spot gold at $1,325.00 as I pen this column (Sept 12, 6:38 am EST) for example, a 1-ounce Chinese Panda gold coin would run you $1,405.50. That’s a 6% premium over the price of gold.

Buy 50 Pandas for $70,275 and you’re paying over $4,000 in premiums over the actual gold value.

Now take that $70,275 and buy instead the 1-ounce Gold Australian Kangaroo at today’s price of $1,360.49 each. The premium per coin is less, at only 2.67%. And with your $70,275 — you’d be able to buy 51 coins instead of 50, or 1 more full ounce of gold.

An even better deal right now is the 1-ounce Gold South African Krugerrand at $1,351.49, a 1.99% premium. With a few more pennies thrown in, your $70,275 would buy 52 Krugerrands, two more ounces of gold.

Don’t underestimate this, for when it comes to buying physical gold, the extra gold you get is a dramatic addition to your portfolio — it’s like a free bonus you get for investing intelligently.

The object is to buy as close as you possibly can to the spot price.

So the bottom line for bullion coins is this: If you are interested in getting the most gold for your money, the object is to buy as close as you possibly can to the spot price.

That means buying gold investments with as low a markup as possible over bullion content.

The Two Cheapest Ways
to Buy Gold Bullion Coins

The Austrian 100 Corona and Hungarian 100 Korona are typically among the least expensive bullion coins (over spot) to buy.

These coins are a beautiful reminder of the Austro-Hungarian empire. They’re both the same size, weight, and alloy, but they have different designs.

Because of their rock-bottom premiums over spot, these coins are an absolutely super way to invest in gold bullion.

The only problem is that they aren’t as well known in North America as the American Eagle, Canadian Maple Leaf or even the Chinese Panda or the Krugerrand. The Austrian 100 Corona is better known than its Hungarian counterpart and more liquid.

So they are unsuitable for core holdings. Core holdings are bullion coins and bars that you put away in a safe place and hope you never need to touch.

Essentially, it’s your hedge against the unexpected: An economic collapse, it gives you something to turn to when everything else fails.

Try to avoid buying Fractional Gold Coins

In addition to the coins listed above, there are also a variety of gold coins available in much smaller sizes, enabling you to buy gold in relatively small increments of less than one ounce. The drawback has always been price: The smaller the coin, the far greater the premium.

Thus, as you buy smaller and smaller denominations, you get progressively less and less gold for your money, because the premium is higher. However, friends in the industry who favor these smaller denomination coins set forth two counter arguments that you should NOT fall for:

1. “Much of the premium is recovered upon resale.”

About half the extra premium is recoverable, on average. But that’s still a cost you can avoid by waiting and buying an ounce at a time instead, if need be.

That’s because the market for the full-ounce gold coins is far broader, deeper and more liquid than for the fractional gold coins. When you go to sell say, three years from now, you may even have to accept an additional discount with the smaller coins rather than recover part of the premium lost on purchase.

No matter what, you’re clearly a lot better off with Krugerrands or Coronas than with say, 1/20-ounce Pandas or 1/10-ounce gold American Eagles.

2. “In an economic catastrophe, the smaller gold coins would be easier to spend or swap for groceries, gas, etc.” 

That may be true, but it’s not inconceivable that in an economic catastrophe, the full-ounce coins — because of their wider distribution — would be equally easy (or easier) to spend.

Personally, I would doubt the smaller fractional coins would be easier to spend. The risk of counterfeits on the fractional coins is much higher than on the full coins.

There’s so much more to buying, storing, and selling physical precious metals that I can’t get to it all today. But in the weeks and months ahead, I’ll be sure to help you to become knowledgeable …

Because once gold finds a bottom on this pullback, the next leg up should begin … and that should be the most powerful one yet.

Now, speaking of the markets in general, please refer to my column of last week and all the charts I showed you from my Artificial Intelligence forecasting models. 

Amazing, eh? Per those charts …

— Gold rallied, failed, and then tanked on Friday, right on cue. Ditto for silver.

— Crude oil broke a tad lower, but then began a sharp rally, a bit early, but generally following the forecast model. Meanwhile …

— Though off to a slow start, the U.S. dollar started a rally, precisely as the forecast charts showed.

— Platinum and palladium, lower just as the charts foretold.

— Ditto for mining shares, sliding sharply … which is music to my ears. I have my Real Wealth Report members scooping them up on the cheap.

And last, but certainly not least, is the Dow Industrials. Here’s the chart from last week’s column.



Click image for larger view

And here’s a chart of Friday’s devastating near 400-point plunge…

Largely confirming the major indexes are now on track to follow the forecast also into an early October low.

And as I noted in previous columns — if heavily loaded up with stocks you couldn’t sell, for whatever reasons — I suggested hedging via ProShares Short Dow30 (DOG) and/or Direxion Daily S&P 500 Bear 1X Shares (SPDN), both unleveraged.

And both obviously did very well last week.

I ask you again: Can you imagine what it would be like if you had the power of my AI models and charts like these PLUS my fine-tuned buy and sell signals working for you?

Stay tuned and stay safe!

Best wishes,

Larry

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 28

Ann Echols September 14, 2016

I own Tocqueville mining shares. I ought them at $54 and two years ago this October u could have sold them at $81. My then advisor said wait. They almost immediately spiraled down ward and only started back up a couple of months ago I should have sold them 10 days ago at $47, after reading your projections but stupidly though they migh go a bit higher. They did not. Now at $41 and probably will ride the wave down I'm with wondering if I should sell them and repurchase when they hit another serious low. Or just leave it alone and ride it out until they come back again I'm probably one of these buyers that keeps a fund like its part of the family. Hard to lose. At this point on the "wave" I'd be losing s lot from original purchase price but maybe I could gain it back if I took the loss and put it in something that would help me make up the loss. I think I'm looking for a miracle. Can you help?

UDO September 14, 2016

Ann , this is not the place to ask Larry questions like that - he does not responds here . And yeah- timing is everything isn't ?

John T September 14, 2016

Maybe you bought them at $81 five years ago, but certainly not two?

Howard September 15, 2016

Ann Just a thought from my trading friends. "It's time in the markets, not timing the markets."

Gary September 14, 2016

I bought some smaller coins years ago. They were in .50&.25 sizes.Probably would have been better buying 1oz bullion coins.

Sam Robinson September 14, 2016

sam@fhgroupinc.com Larry, I have been protecting my gold and silver stock profits with a trailing stop. Should I continue this strategy or sell all positions and wait for the bottom to reinvest?

Randall September 14, 2016

Larry, Excellent forecast vs. what is now unfolding! What should we be doing with your previous Gold "buy" recommendations (ie. GG, AUY, KGC, HMY, etc.). Should we continue to hold them through the coming dip or sell them at market now? Thanks much for your feedback.

UDO September 14, 2016

Randall , where do you guys get the idea from the Larry responds to questions on this site ?

Jamie-Dimon September 15, 2016

Randall, to me it looks like Larry's model shows the right trends, which is extremely valuable, but exaggerates the true price movements. I am still heavily invested in junior mining shares and will not sell due to three reasons: 1.) The spreads of the small miners are relatively large and Germany taxes 25% on winnings, which can make a re-entry costly. 2.) So far, my picks did not suffer as much as other miners. I bought Barkerville, Lion One, MAG Silver, Strategic Metals, Wesdome, Brazil res, first mining, Silver one, Monarques, Jaguar Mining and Klondex. Added Iamgold and Kinross when gold dropped close to $1300 a couple of days 3.) The GDX just sits on ist 50% fibo retracement (around $26). It might visit $22 for a very short time, which would be a great buying opportunity. I will definitely ride out this correction and accumulate mining stocks upon weakness.

Howard September 15, 2016

Randall My fund has recently purchased 38 million junior mining stocks which we are going to ride out.

Will September 14, 2016

I expect that physical gold may become hard to come by in the not too distant future. Dr. Weiss himself has told us that we will not be able to foretell when the black swan will land; at least that is the impression that I have. I am afraid with so many black swans in the air as there are these days, that when one lands the rest will become buzzards circling overhead looking for rotting scraps. I see physical gold as insurance to prevent my flesh from rotting so the buzzards overhead will look elsewhere to pick the bones dry. These are the days that we should start looking at gold as money and no longer as a commodity to be day traded; zero and negative interest rates have seen to that.

Will September 14, 2016

I should expect that any reduction in the price of gold that Larry expects would see a lot of volatility; so if you insist on betting gold movements, why not play the volatility instead with offset put and call options. Or for the less active, just accumulate physical gold to at least 10% of investable funds. If one does not already have 10% in physical gold then accumulating should have priority. Good luck with paper gold! This is how I think.

Steve September 14, 2016

I'm a bit confused. You have been saying that gold (and senior and junior gold mining stocks) are going down and will probably bottom in early October. However, you shared your first junior gold mining recommendation with your Real Wealth subscribers (like me) to buy a specific junior share a few days ago. Why buy early if the AI charts are showing a down trend?

John K September 14, 2016

Thanks for the recommendations. Do you have any recommendations on semi collectible coins or thoughts on investing in these?

Barney Google September 14, 2016

Not only am I continuing to buy metals, but I'm not sure there is much time left to prepare. The stock market looks like it has running out of steam, and I believe the next financial crisis is just around the corner. http://www.newsbtc.com/2016/07/10/dark-clouds-gather-deutsche-bank-collapse-looms/ http://qz.com/779399/deutsche-bank-has-studied-the-last-35-years-and-says-the-next-35-dont-look-good-especially-for-bond-investors/ http://blogs.wsj.com/riskandcompliance/2016/08/22/corruption-currents-deutsche-banks-10-billion-scandal/

Peter Rodgers September 14, 2016

Hi Larry Great reading and guidance. Is the KIWI gold coin recommended. Regards

Derek C Howie September 14, 2016

# Thanks Larry All Good Info. GOOD LIFE GROUP. Bay Of Plenty New Zealand. The Flow Is AUSTRALASIA Do Come Visit Us In Troubled Times. Stay Well Larry an take care Yours D.C.H. out.

Sonny September 14, 2016

Larry Advise - back the truck up and buy SILVER Eagles

Doug S September 14, 2016

Awesome update, Larry! PLEASE, PLEASE, PLEASE keep sharing your updated AI cycle models for Gold/Silver, OIl, The Dow, Dollar, and Euro. If not here, in your Real Wealth report. I'm a very long-time member. The cycle charts are of immense value to me! Thank you as always for your superior no nonsense knowledge!!!

vishal September 14, 2016

sirji i want to play gold silver crude with ur sneak peak indicator for finding the major reversal.if any paid service i pay if u r very sure.please give me reply as early as.yesterday some body call from your end but i confuse what he want to say

Stu September 15, 2016

So Larry, you're saying gold could correct to "even the mid $1100s" by early October. Hmmm. You've been down this road before you know, with your fear-mongering talk. Remember, you had to walk it back not too long ago (this year). Yes, I know in this commentary you used the "could easily unfold" qualifier in describing a gold and silver crash, but people who aren't as savvy as you remember numbers (ie: mid $1100s). Maybe something to think about next time.

Toby Howes September 16, 2016

I think that gold has been in a trading range for a few months ... $1310 to $1375 ... I can't really see a 'heck of a slide'

John N. September 17, 2016

Your forecasts have been good lately. The Dow didn't quite make 18500 on a monthly basis and gold has now closed under $1310 on a weekly basis! Good calls! In regard to oil you have forecast a high of some sort in November. What do you expect? I would like to get out of my loser oil stocks and buy gold stocks at long last in Nov or Dec. You were bullish for a short while recently about oil, but now you are more bearish and why? Do you see any fundamental reasons that could change this charting forecast? Then you forecast oil going down to a low early next year and again what do you expect? When do you expect oil to become bullish again? Mid year 2017? Will it rise somewhat with the rise in the USA stock market which you are forecasting for early next year? If Venezuela goes broke and sells all its gold will this influence both oil and gold markets? I suppose the damn Saudis will not agree with Russia to get the oil price to rise!!

rockinr September 17, 2016

What I see at work here is the Fibonacci scale.If Larry is right about the sell off of gold,his numbers of 1250 or even lower would coincide with Fibonacci scale. Just a normal sell off.Buy pow ,sell high.

jj September 17, 2016

Was extremely lucky to buy AG last Dec @ 3.00 and sold last month @ 12.00, am now in svmlf, gpl,ggtcf,mrddf all small silver and holding

Dan September 18, 2016

Some thing to ponder... with all of the gold/silver gloom and doomers predicting a crash in gold, why are countries like China, Russia, and European entities loading up on gold bullion? China especially, has been loading up big time because right now they're the country with all the fresh cash. Are they ALL wrong and about to lose their shorts? One has to wonder...

Rafi September 18, 2016

Hi Larry Enjoyed reading your comments about Europe falling apart unfortunately I wonder what you see the future of Switzerland and the Swiss Franc?! Are they also going the same way Europe is going? Love to hear your comments Thanks Rafi

Linda Auerbach September 23, 2016

Larry What if gold doesn't go down by mid October should I buy? Cycles are not always reliable. I remember Robert Prechter predicted stock market will go up to 36,000 in the 80's and he crashed and burned. Don't hear his name anymore.