Gold rallied hard on Tuesday to bring Christmas a day early for gold bulls. But don’t forget silver as it went up too and several key mining stocks closed on new 52-week highs.
If traders navigate this situation right they are going to feel next year like they are opening up new presents every single week when they look at their trading account in 2020 – and I’m going to tell you what I mean by doing this right.
First take a look at this chart of gold to see what happened.
Gold went into a correction/consolidation phase starting around Labor Day in which the 50-day moving average has acted as resistance. On Tuesday it smashed through that level to tell us that resistance has been broken and a new rally has begun. All those mistaken enough to try to short gold must now cover before they hurt themselves. DUST players are in big trouble in particular.
Silver also had a nice move.
Now I do not know if this rally is going to take gold and silver straight up through their highs of this year and beyond in a matter of weeks. We could see the two precious metals go to those highs and consolidate more before going up again.
But it doesn’t really matter.
You see what is the real key to profit from this situation is to get into the best mining stocks that are leading the way higher and outperforming gold and silver by trading near their highs already now or breaking right out through them as we can expect those stocks to go up at a faster pace than the metals prices do next year.
One example is my stock pick of the month Aftermath Silver. It already made a new 52-week high this month and on Tuesday it went up over 7% when the price of silver went up 2.02%.
One of the things that makes Aftermath Silver compelling is that it is really the only pure play silver exploration stock trading on the markets. It also is positioned for next year as it has fully financed itself to start a comprehensive drilling program in 20202.
The CEO of the company gave this interview at the end of last month explaining the situation.
There is no doubt that next year is going to be fun year for gold and silver bulls! This week is just a glimpse of what is to come!
In case you missed it I posted an interview I did with Jim Goddard up earlier this week. To listen go here:
Disclosure: Mike Swanson owns a position in Aftermath Silver. Because it is a small cap stock with less than $100 million in market he is placing himself on a voluntary 30-day trading restriction period from the date of this post in which he will not buy or sell shares of it.