Gold and silver broke through their resistance levels yesterday as gold closed above $1830 and silver above $24.00. Mining stocks soared on this move. We’ve been watching energy stocks go up for months and now the metals and mining stocks are likely to follow. It’s all part of the commodity inflation trend. Take a look at the DBA ETF, and how it closed yesterday.
DBA is an agriculture soft commodities fund, which I’ve been owning in my IRA for awhile now. Notice how steady its rise has been in the past twelve months. It went up again yesterday. Despite the predictions of people like Cathie Wood, there is no sign of inflation stopping when this ETF has a chart like this. I don’t understand why people on Youtube keep listening to people who say that inflation is over. Don’t they see what is happening in the real world?
The Nasdaq and high flying tech stocks dumped again, but gold went up. If you want to beat the market you need to be in the things beating the market.
Take a look at the chart of gold, which went up $30 yesterday.
Gold cleared short-term resistance. It’s next resistance level is really in the $1880 area, where its upper 200-day Bollinger Band is. You can’t see this on the Robinhood app, nor can you put the move in greater context with a longer term chart with the app either, such as this one.
Remember the saying, “the longer the base the bigger the rally.” Gold has been consolidating for over a year.
Personally, I think now is the time to buy instead of waiting for another breakout above $1880. The reason is mining stocks launched with big gains too, as you can see from the GDX ETF, which I have a position in with my IRA too.
GDX went up over 7% yesterday, and many mining stocks went up more than that. Typically in a gold rally you see the big caps surge first and then small caps follow. I think that is coming next and is why you might want to take a look at my top mining stock for this month, Inca One Gold, which happens to be a small cap producer. It trades as INCAF on the US OTC and INCA on the Canadian stock exchange.
You can find the profile I wrote on the stock and company early this month by going to this post.
Check out the quote and the charts here: Go INCA! Go INCAF!
-Mike Swanson
Disclosure: Mike Swanson owns shares of Inca One Gold. Because Inca One Gold is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post (01/20/2021). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Inca One Gold. This third party paid Timingwallstreet Inc., $13,500 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.
