Pounding My Fist on the Table!

I’ve been pounding my fist on the table all year long: Do not buy gold or silver I warned repeatedly. Or even miners. If this is the beginning of their new bull markets, I said, they would be deeply retraced, hold important support levels, and then that would be the time to buy …

Then everyone else jumped in with little or no patience, or were egged on by inexperienced analysts and traders. And now, they’re starting to spill blood like crazy.

Thus far, silver has crashed from a high of $21.22 (September futures) to as low as $18.37 as I pen this column, a whopping 13.45% loss in less than two months. Gold has shed far less, but nearly 5% in roughly the same time period.

The loss in silver, nearly three times more, is due to silver’s industrial uses, and the global economy has not met growth expectations.

More losses are coming. Perhaps a lot more.

More losses are coming. Perhaps a lot more.

If gold cracks $1,300 — I wouldn’t be surprised to see the low $1,200s, even mid-$1,100s.

If silver cracks the $16.27 level, I wouldn’t at all be surprised to see the $13 level.

Those are extreme support levels that could be reached, yes. But I think the metals will find longer-term support levels more in the $1,250 level for gold and the $17.50 area for silver.

Either way, I sure hope you hedged any 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. Already smoking hot!

Lastly, I repeat my warning of last week: Everything I study, all major markets and all my major indicators, tell me we’re rapidly approaching a major inflection point in the markets.

And it seems that point has indeed arrived. The dollar exploding higher. The euro starting to go over the cliff. Stock markets wobbling. Bond markets shaking.

Remember, for the Dow Industrials and the S&P 500, I would consider ProShares Short Dow30 ETF (DOG) and Direxion Daily S&P 500 Bear 1X Shares (SPDN), both unleveraged to hedge any heavy stock holdings you have.

And keep in mind, the global economic and geopolitical scene is nasty, and getting worse by the day. In addition to ISIS and domestic uprisings in Europe and the U.S. …

First, things are now so bad in Germany that for the first time since the end of the Cold War, the German government plans to tell citizens to stockpile food and water in case of an attack or catastrophe, the Frankfurter Allgemeine Sonntagszeitung newspaper reported last Sunday.

Second, disinflationary forces are still dominant. Throughout most of Europe, investors are mainly concerned with getting to cash and liquidity, and taking on little to no risk.

So stay tuned and stay safe!

Best wishes,

Larry

P.S. A tidal wave is headed our way! It will wipe out the lifesavings of millions of investors. But most people can’t even see it coming. It’s called “The K Wave” or “The Long Wave.” Whether you are totally wiped out by it — or whether you ride the “crest” of this wave to a level of wealth you never dreamed possible — depends entirely on what you decide to do today. Click here to see how you could multiply your money by 300% … 400% … even 500% if you “surf” the K Wave safely into shore.

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 43

ian August 31, 2016

Hi Larry,yes Larry took heed,thank you

Bill Seavey August 31, 2016

That's rather shocking about preparations in Europe. But there are also plenty of people doing the same in the U.S. I agree this is not the time to speculate on gold or silver, what gains people have made this year are likely to be lost in the short term. FYI, a recent AARP journal article (35 million readers) thoroughly dissed gold ownership as an investment, especially if you buy from those guys that want to sell you "numismatic" coins. There are some interesting aspects to all this cross border with Canada, where I purchased a few gold Maple Leafs some years ago. I'm doing a book on the geopolitical aspects of our relations with Canada, Google my name if interested.

john August 31, 2016

if a new world currency is coming on September 30th this month, then the us dollar will become worth less and less allowing inflation for foreign products into this country. everything on WAL-MARTS SHELVES WILL INCREASE IN COSTS. WAL-MART STOCK PRICES WILL PLUMMET. AS WILL MOST OTHER STOCKS. THE OLD EURO DOLLAR IS GOING TO EVOLVE INTO THE NEW WORLD BANKS NEW CURRENCY. WILL IT BE GWB'S AMERO-=DOLLAR ? ? who knows ? ? will there be a one world gov't ? everyone with open borders ? ?

ragnar1 August 31, 2016

trashy ol wmt? no loss!

Dave S. August 31, 2016

Larry, if you really think gold is going to plummet as described above, why did we (RWR) just buy 3 miners in the last couple of days; that is, why did you revise bids as high as you did? The stops are also perplexing---why not double down at those low prices as should have been done with FCX when it hit 3.52? Are you considering that gold price may collapse or miners may go bankrupt? Thank you.

Will August 31, 2016

Larry, obviously you are not as old as I am; I was taught that you accumulate during dips to average your price down. Recently, it is getting more and more difficult to do that because the the dealers are all too often out of coins. Maybe that is because others beside myself believe that gold should be accumulated and not treated as a commodity to be traded. I do not think being a day trader in gold is the way to insure your economic future based on accumulation of gold. That is like canceling your auto policy just because your car is in the garage.

Earle August 31, 2016

Was thinking the same thing,,,a bit worried now!!

Ralph September 3, 2016

GOD FORBID....

Gary August 31, 2016

It's easy to forget about all that stimulus money still out there .I can't hardly wait until Wall St. sticks their hand in the cookie jar and come up empty.Off course, Aunt Yellen will come to the rescue. Gary

billseubert August 31, 2016

these markets are acting very strange. I used to dabble in futures in gold and silver. it would take weeks, sometimes months to build up a nice warchest-but when these markets fell, they really fell. everything I made and sometimes more would be taken away . my brokers told me the markets were moving too fast, I couldn't sell. now precious metals are correcting piece by piece. I have never seen markets move DOWN so slowly. whats up?

ragnar1 August 31, 2016

euros escaping the caliphate?my neighborhood in brooklyn has a dozen buildings under gut renovation. someone has a LOT of money to spend

ian August 31, 2016

HI Billseu,its easy,they have that much free fiat money Im suprised the DOW has come down any.but wait till it does.

Chuck Burton August 31, 2016

The markets, generally, seem to be in a huge topping formation and starting to roll over - precious metals along with stocks and bonds. Metals could lead the way, with stocks following more slowly and picking up speed. When the Dow plunges over a thousand points , perhaps for two days in a row, metals should reverse, as investors seek strength. Remember, gold and silver are still well below their highs, while stocks recently made all time highs, and are overdue for a correction. I agree with Larry about the extent of gold's correction after it's recent surge - around 50% of the surge, followed by a breakout to new highs, as fiat money collapses in value. If the Fed gets it's head out of you know where, and starts raising rates, the Dollar could more or less keep up with gold, however. That would cause a temporary depression, though, before the U.S. economy recovers, and the politicians can't have that, can they.

ragnar1 August 31, 2016

unbeliveable intense construction in manhattan and brooklyn nyc never seen anything like it(in 30 years or so)

Mike August 31, 2016

Same thing in the Dallas - Fort Worth area. All this prosperity based on borrowed money. What could possibly go wrong?

Sandor August 31, 2016

Don't forget that the miners are selling off in drovers,also. JDST and DUST will explode in the months to come. Maybe until January when Martin Armstrong has called for the reversal in the precious metals. A mighty sling shot awaits!

john August 31, 2016

I think the idea of hording food and water is extreme.. Newspapers will print anything that will elert people to its prime objective of selling newspapers . It makes a great headline ? On gold I sold my shares in Hecla> They went up a dollar after I sold but are now back 1.5 dollars.. Watching to see if your script pans out? No pun intended J

Bob Drummond August 31, 2016

What did you expect. I have been doing this for 40 years and I have found that the best way to drive a stock up is sell it and down buy buying it. That's Life

Karin September 1, 2016

The official reason for the German government to ask people to keep food and water for ten days is in the event of an attack or a catastrophe. Preparations of something like that is going on in several parts of Europe, including Sweden. We used to have a much better civil defense, maybe 20 years ago. The reason these discussions have come back is the russian invasion of the Crimea, according to the swedish newspaper Dagens Nyheter. Swedes are always advised to keep batteries, candles, blankets, food, cash, matches, a radio that works on batteries... bla, bla, bla in the event of, for instance, a current break down. In Sweden we are asked to manage by ourselves for 72 hours. Of course, a break down of the monetary system would also be a strain on society, and could be one of the scenarios the authorities are thinking about. I think it's pretty normal to keep food and water for several days at home. And ten days is not a lot of food, if we are talking "surviving." Well, I guess most of us would survive ten days without food, come to think of it. Karin

Bob August 31, 2016

Yesterday you said buy gg, auy, & one other gold stock. Now you say hedge gold. What's up?

Bob Drummond August 31, 2016

A thought of my own. With things the way they are shaping up, I am holding companies that are based in Canada and the majorities of their properties are in Canada, being a Canadian this makes sense to me. My primary fear is that governments will start grabbing properties owned by companies not based in their own country. I know this will not stop my own government from doing the same thing but it is likely that they will attack outsiders first. The new black death is here, Government.

ji kim August 31, 2016

I enjoy reading your article today. By the way do have a gold price Graph this week?

dgs August 31, 2016

Larry, Good call on PM dropping and thank you for sticking to your guns and not weakening. Approaching my first double on JDST. Thank you and keep up the good work.

Vanda August 31, 2016

Mr. Edelson, I would like to know how the new money is going to work. Is it taking over the dollar? I read that we could lose our savings when the government decide it needs the money - and it could be sooner than we think because it cannot keep on borrowing. It will shut down the banks for a couple of days and the bank will transfer our savings to the government. They will probably leave 5 to 10% of what cash is in the bank. And no one can do anything about it unles all America go to Washing wearing shields for protection. So wouldn't it be wise to put our savings under the proverbial mattress? And what about our investments? Please take the time to address this - I am sure that other people have read the same thing. Thank you.

Ronald West August 31, 2016

I know you're a smart guy and a great trader but you are missing the whole point of owning gold and silver, to wit, as a store of value against rapidly depreciating counterfeit currencies (rampant price inflation and coming hyperinflation), especially the US dollar, and protection from earth-shattering geopolitical events and other black vultures that are now circling the corpse of the ponzi fiat money system. Gold is not an investment of ordinary value, like a stock. It is stored labor and wealth. It is a currency, and is the ultimate currency that has no counter-party or counter-party risk and can never be worth nothing. Otherwise, central banks and the uber-rich such as the Rothschilds, would not stockpile it. It is insurance against whatever darkness that will soon envelope the entire world and can be traded for food and the necessities of life and can buy safe-passage and possibly save your life. Traders in counterfeit paper gold instruments with some 500 owners per ounce of real gold, will ultimately get what they deserve, total loss, including ETFs that are not backed with an equivalent weight in real gold. For those of us who, many years ago, saw the financial nightmare and impending collapse that is now unfolding with rapid speed, have been preparing by stockpiling real gold and ultra-cheap mining stocks when they were low, and being derisively labelled as stupid gold bugs and laffed at by the so-called experts, your dire warnings are of no consequence. Myself, for instance, I have been buying gold and silver since 1974, and gold and silver mining stocks since 2012, and have averaged down to a low basis as the prices continued to fall. Since I view gold and silver and gold and silver mining stocks as a long term investment and the ultimate currency and store of value in a crisis, it is unimportant what my average cost in terms of counterfeit electronic or paper currency is, although I can tell you it is so low that my portfolio is still up by over 150% in the pullback of this mini boom since January and preamble to the decade-long mania that is coming. When gold is revalued to $10,000 an ounce, do you think I will care if I paid $1500 an ounce for it when I could have saved a couple of hundred dollars by waiting for the pullback? And what if the pullback is interrupted by another year of the liars at the Fed coming up with more excuses why they are not raising interest rates this month but "for sure next month but it's data-dependant", which is all but guaranteed? Or if Dorchebank's or Citibank's massive derivative portfolio suddenly explodes and collapses the entire global financial system, a la 2008, only this time it will not recover without revaluing gold? In such an eventuality, physical gold will be unavailable at any price, except to trade for it in silver or other valuable commodities. So, this is not the time to be quibbling about the price of gold, I am just thankful that I am still able to trade worthless counterfeit currency for real money. Further, any professional should be able to see that this pullback is only because of the uneducated masses putting massive blind faith in a bunch of carefully scripted words coming out of the mouths of the largest counterfeiters in human history, the Fed and other central banks. The real fundamental reasons for gold to soar have become much much worse than in 2008, with trillions of dollars of debt that will never be paid, and there is no recovery, unless you also believe in the bloated and artfully contrived inflation, unemployment, and GDP statistics from the government's very own propaganda machine. Make no mistake! The final conditions for owning gold are much more vital than ever and sadly, there will not be enough real gold to go around, with only 6,000,000,000 ounces of gold existing, or 6/7 of an ounce per person, except that only about 1% of it is ever for sale at these low low prices. The rest of it is owned by somebody and these owners are "strong hands", who own it for all of the above noted reasons, and have no intention of ever selling it. I could go on and on but I think you get the point. I am sure that you are a very good trader but you are doing a disservice to those who need the protection that gold provides, when you entitle your articles with sensational headlines like this one: "Pounding My Fist On The Table! Don't Buy Gold or Silver or Miners Yet!" While most of your clients take that to mean "not yet", the inexperienced and less sophisticated readers will interpret your sensationalism as "Don't buy gold and silver or you will lose your entire investment!", which is just plain rubbish and it would be tragic for those who rely on your professional advice. That's what they will hear. The reality is that NOW and any other time before the ponzi fiat financial system collapses for a long time, is the perfect time to back up the truck and load up. It does not matter if it goes down by $100 or $200 (highly unlikely anyway), it only matters that they get some real physical gold while they still can. Next week, it will be going back up again anyway, when the hypnotized masses suddenly re-awaken and/or China and Russia and India jump back in. The bull market was merely interrupted by another transfusion of propaganda and the next leg up will come with blinding suddenness, and the bull market will resume. When the mania comes, charts and technical analysis will be meaningless, as the prices go parabolic with back to back $300 days, and as the masses scramble to get any kind of gold that they can. Most late-comers will go away disappointed and will only be able to buy paper gold and mining stocks at much higher prices. Gold and silver reigns supreme as non inflatable money.

Lynn Peterson September 2, 2016

I agree with you 100%, Ronald West. Very well written piece. On another note, as I said before, silver bottomed on August 25, 2016 on my TOS charts and according to FTC, silver will now trend higher until about April 17, 2017, when another correction will take place. After that, it is up, up, and away. This bull market in gold and silver will last for several years. You better get on board now before it is too late!! today, gold and silver are rocketing higher. Don't believe those analysts that say gold and silver are going lower. They are absolutely wrong.

Ralph September 3, 2016

This has to be the record for the longest post on the money and markets blog. By the way your wrong not 100 percent but wrong.

Lynn Peterson September 3, 2016

I hope I am wrong. I would like to see the price of silver go down to $13 an ounce, so I could buy some more at that ridiculously low price. But that is wishful thinking and delusional. I've been in the silver business for more than 47 years, and my analysis, both fundamental and technical, tell me that we have seen the bottom in gold and silver for a very long time, perhaps a lifetime. Therefore, prices will go up from here and perhaps very strongly. Even Larry is predicting gold to eventually go up to $5,000 an ounce!

Julian September 5, 2016

Great post. Any chance I can get your email. Sometimes I need a swift reality check! I mean a real reality check. The kind for regular people. You are the kind of guy I need to get to know.

the little aussie accumulator September 5, 2016

ron west you should be teaching at harvard economics best piece i have read in a long time

Alyce August 31, 2016

GLD was up 25% and GDX was up 125% YTD at mid Aug -- Which was a good time to cash out!

Sham August 31, 2016

What do you think of GDXJ Puts as a downside Hedge for Gold ?

A.J Close August 31, 2016

Thanks Larry, for your last update on gold! I have a question however on some stock buy's G- G etc. why should I make a buy since the major drop coming in October would certainly stop the stock out. I follow the market daily and your projections have been right on. Does the KGC shutdown in which ABX took over amount to anything since they basically switched mines in Peru and Nevada.

Vanda August 31, 2016

Mr. Edelson, How is the new money that is coming out next month going to work? I read that the government will take our savings from the banks if it cannot borrow what it wants. How much truth is on this. What about investments? Stocks, etc. Thank you.

gianfranco August 31, 2016

I dumped gold miners, but still have some european bank shares. Will it be catastrophic here too? Thank You.

dave August 31, 2016

http://www.zerohedge.com/news/2016-08-31/someone-just-dumped-almost-5-billion-notional-gold-futures-market

Peter W August 31, 2016

So Larry, are u saying that H.Dent is right or P.Stansberry is right with respect to gold & silver! I mean all you brilliant guys are all over the place when it comes to where & when we should put our cash into what investment. So maybe the best is to wait out this election in Nov., stay liquid, little yield but virtually no risk. So now what?

Lawrence graves September 1, 2016

Thank you. I followed your advice and made some money, more importantly I did not lose any. Keep up the good work.

jim September 2, 2016

larry,, you have been spot on,,,i feel that you really want to do the best for the little guy, one of the few advisors that I listen too that has been so helpful,,,,,thanks so much

H. Craig Bradley September 2, 2016

Larry, Listen to this old ditty: "Wrack My Brain". ( = Pounding Sand ). https://www.youtube.com/watch?v=1DU6YweDyD4

James September 3, 2016

Maybe the Germans already have a catastrophe on their hands already, have you seen the amount of CATs in the world, and how much disposable income is spent on our four legged furry friends. 8 Billion People that's a lot of Pet Cats.

Steven September 6, 2016

Does your indicators still tell you that Gold will be dropping? With all the recent data, it appears that a rate hike is off the table for now. Is your charts now going to push a pull back until December? What/How will Gold be driven down to the numbers you indicate?

Dave Chauvin September 7, 2016

Wow! Well said Ronald. Right on! Anytime you can, is the right time to buy gold and silver. Yes, averaging down is great, but don't wait or it may be too late. It won't matter in 5 years what you paid now. All that will matter is you have physical gold and silver as monetary insurance for you and your family. Hell, I bought silver at $30. an ounce years ago and I'm not worried. I had the available money at the time and I'm glad I bought it.