Featured Content

An Important Message from Michael Lombardi:

An Important Message from Michael Lombardi:

I've identified six time-proven indicators that now all point to a stock market crash in 2015. You can see my latest video, Six Time-Proven Indicators Now All Pointing to a 2015 Stock Market Crash, which spells out why we're headed for a crash and what you can do to protect yourself and even profit from it, when you click here now.

Investment Opportunity Alert: Buy Gold on Weakness

By

gold stocksGold prices have been all over the chart and moving in a sideways consolidation channel since late September, caught between $1,800 at the top end and $1,550 at the bottom end.

After a recent move towards $1,800 in late February, the metal topped, and it is again struggling to hold ground at around $1,650 with key support at $1,600 to $1,625.

Gold had been on a four-day winning streak, but the June Gold remains below its 200-day moving average (MA) of $1,702 and 50-day MA of $1,680. There is a bearish death cross on the chart, so there could be more weakness.

Failure to rally to the 50-day MA could see a subsequent move down towards $1,600, which I would view as a decent buying opportunity to buy or add to a position. Moreover, a further decline to $1,550 would represent an excellent buying opportunity for the metal.

The reality is that the price of gold is currently driven by two key variables—global risk and world demand. I feel both factors are supportive of higher prices.

I feel there will be tough years ahead for the European Union and eurozone, along with the debt mess here. Spain is in its second recession and in trouble. Read my thoughts in Don’t Jump on the European Bandwagon Yet.

China continues to stall, with the first-quarter gross domestic product (GDP) at 8.1%, below the 8.3% to 8.5% estimates, and the lowest reading in 11 quarters.

In the Middle East, there are mounting issues in Syria and speculation that Iran is close to having the knowledge to develop nuclear weapons.

The second major variable that could drive gold higher is the higher demand from China and India. China is expected to jump ahead of India as the top consumer of the yellow metal in 2012. China’s demand for gold is estimated to surge 20% this year, according to the World Gold Council. This demand has helped to drive up prices and will continue. Moreover, there are thoughts that China wants to reduce its buying of U.S. debt and instead accumulate physical gold. Should this happen, it would give a major push for prices.

Staying in the Asiatic region, I also expect gold to continue to be in high demand in India, a major consumer of the precious metal. Demand in India could be massive and expand at 10% to 15% this year, up from an estimated five to seven percent in 2011. India imported a record 969 tonnes of the yellow metal in 2011, according to the World Gold Council.

Given the current downward pressure, my advice is to buy gold stocks on price weakness, with a break below $1,600 representing a great opportunity to buy.

Premium Content

Secret "New Swiss Bank Account" Safest Way to 44% Returns

Secret

It's the safest—but, until now, completely ignored—place for your money. Because these elite "bank accounts" pay guaranteed 5% cash payments per annum on top of returns on capital exceeding 44%... Learn all about them here.

About the Author, Browse George Leong's Articles

George Leong is a senior editor at Lombardi Financial. He has been involved in analyzing the stock markets for two decades, employing both fundamental and technical analysis. His overall market timing and trading knowledge are extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi Financial’s popular financial newsletters, including Red-Hot Small-Caps, Lombardi’s Special Situations, Judgment Day Profit Letter, Pennies to Millions, and 100% Letter. He is also the editor-in-chief of a... Read Full Bio »

Exclusive profit Confidential Presentation

Stocks that Double in Two Days No Matter What the Market Is Doing?

Stocks that Double in Two Days No Matter What the Market Is Doing?

We picked SafePay Solutions stock and it jumped 142% in two days. We then picked China 3C Group stock and it went up 103% in two days. To learn more about our stocks that double in two days, see them here now.

×