Last Friday, we mentioned Gold would be in trouble, and even though we were long on the precious metal, we were searching for a signal that it could hold support. We also said a lower close would cause a reversal, and this is exactly what has happened. We are now short on both Gold and Silver, while still being long on Platinum.
Of course the bigger story was in the cryptocurrency markets. With Bitcoin going to $42,000 and being joined in its big rally by the number two cryptocurrency, Ethereum, along with many other “alt coins”. It seems to many that Bitcoin could be replacing Gold as the #1 place to store wealth.
We think nothing will replace Silver, Platinum and Gold. But we also think that Cryptocurrency is real. We have no clue what the future has in store for the investment class, and we are very small players there, but we do believe investors will continue to use Cryptocurrency as a “digital alternative” to Gold.
However, we would not recommend buying at the current levels because we see this latest rally as being triggered by the fear of missing out. Bitcoin right now is in bubble territory and will soon have a significant pullback, which would then create a great buying opportunity. We don’t trade Bitcoin, but we do own some. As we continue into this week, we are looking at Gold and Silver in the short term, and Platinum for the long term.