Mr. Dines: Add To Your Gold Positions Now

Written by James Dines
Posted July 13, 2019

Publisher's Note: The precious metals sector is heating up and poised to break out. As "The Original Gold Bug," no one has as much depth of experience and knowledge as Mr. James Dines.

Read on for an excerpt from The Dines Letter for his latest views on the stock market and precious metals sector.

Call it like you see it,

Nick Hodge Signature

Nick Hodge

Last week displayed a classic example of how to use Mass Psychology to make money in the stock market.

The mass media blared that the Dow-Jones Industrials had the largest June rise (7.2%) in 80 years. On top of that, reporters breathlessly added that the S&P 500 had risen to an all-time high — an Upside Breakout. The widespread rush to buy was almost palpable!

However, self-examination in a High State should explore that urge by many to buy stocks “before the market ran away to the upside.” Sober reflection should note that the June rally had only recovered the previous decline, for an approximate net zero gain. Further, the S&P’s new high was by a tiny amount, the very lack of a decisive upthrust was a cautionary sign, suggesting the risk of a dreaded False Upside Breakout, requiring pausing before frantic buying.  Finally, the media avoided mentioning that the Dow-Jones Transportation Average (DJT) had not risen to a comparable new high, for a classic “Dow Theory Non-Confirmation.”

Careful analysis reveals that stock markets are still in “Group Rotation.” For example, Big Money continues to ease out of their huge holdings of FAANGs (Facebook, Amazon, Apple, Netflix and Google) and into the “haven” groups: Treasuries, gold, silver, utilities, and even confirming Bitcoin’s uptrend!

Consequentially, we should also begin looking for a resumption of buying in the marijuana sector. While pot is not a traditional haven, it is recession-resistant, as even many of the poor surely would find some pennies to buy marijuana in hard times.

Earnings season will arrive in coming weeks. Still no clue from the U.S. dollar, which has been flat since last December. The market might yet erupt, sweeping all major averages decisively higher, although the odds are against that. Only a decisive Upside Breakout would induce us to consider turning bullish. Let’s not fire until we see the whites of the market’s eyes.

Meanwhile, we had you well prepared, starting with gold and silver stocks; we flashed their “Buy” signals loud and clear, right near rock bottoms. That Buy opportunity at their historic lows has already slipped away for many gold and silver stocks. Perhaps gold strength was to anticipate the surprise nomination of gold bug Judy Shelton as a Federal Reserve governor.

However, the Herd is still downstream from many of the low-priced gold and silver stocks, which will have their turn. Our personal preferred time frame to buy and hold stocks is 1 to 3 years, but any TDLrs who’d like to try for a shorter-term trade might have that opportunity.

As “The Original Gold Bug,” we’ve seen many upwaves in our time. Gold miners have been “highgrading,” and stingy with paying for exploration and development, as we have seen before all previous gold upcycles. When gold demand inevitably rises, miners need years to ramp up production shortages, adding to the biggest gold upcycle of them all!

We have long predicted the upcoming one would be bigger than any of the previous ones; adding to your gold and silver positions would enable you to benefit even more when it arrives.

James Dines is legendary for having made correct forecasts that were in complete contradiction to the rest of the financial community. He is the author of five highly regarded books, including "Goldbug!," in addition to his popular newsletter, The Dines Letter, and videotaped educational series. Dines' highly successful investment strategies have been praised by Barron's, Financial Times, Forbes, Moneyline, and The New York Times, among others.

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