Opinion - Gold Headed Lower - Edelson

Quote:
Gold Busts Important Support. Move Down to $1,430 and Lower Now Imminent. Silver Also Cratering, Again. Add to your gold hedge ASAP!


Dear Real Wealth Member,

On Friday, the price of gold fell to a very important sell signal on my systems by closing below $1,610 an ounce.

It gives me no pleasure to tell you that gold is headed much lower. After all, I'm long-term bullish on gold. But based on Friday's sell signal, I now fully expect to see at least $1,430 gold soon -- and probably even lower, with gold falling as low as $1,060 in the weeks ahead, in the first quarter of 2012.

Fortunately, I anticipated much of this. Which is precisely why I recommended in previous issues of Real Wealth Report that you add a partial hedge for your core gold positions.

You should be long 100 shares of the ProShares UltraShort Gold ETF (GLL) per every $100,000 you have invested in gold from the September issue at roughly $16.28, and another 200 shares per every $100,000 you have invested in gold from the October issue at about $18.27.

That ETF is now trading at roughly $19.02, and it's set to move even higher.

Given the importance of Friday's sell signal in gold, I NOW RECOMMEND THE FOLLOWING ...

FIRST, make sure you follow my instructions in the December Real Wealth Report issue (which published on Friday, December 16) to sell all of your shares in Yamana Gold (AUY), Goldcorp Inc. (GG), and Allied Nevada Gold Corp. (ANV).

Depending upon when you acted on my original recommendations for those miners, you should bag gains of up to 13%, 20%, and 71% (based on Friday's closing prices), respectively. Also, make sure that you have canceled all previously recommended protective sell stops for those positions.

Not to worry. You will be able to buy back these great miners, and many more like them, when gold bottoms.

SECOND, it's time to add to your hedge for your other gold positions, namely gold bullion, the SPDR Gold Shares ETF (GLD), and the gold mutual funds I have recommended, all of which have very substantial gains.

As noted above, I've already recommended 300 shares of the ProShares UltraShort Gold ETF (GLL) for every $100,000 of gold you own. I now recommend adding another 300 shares, effectively doubling your position.

To do so, here are the typical instructions you would give your broker ...

BUY 300 shares of the ProShares UltraShort Gold ETF, symbol GLL, at the market.

I will monitor a stop for you for the entire position. And note: I may have you add even more to this position, especially if gold closes below $1,430. So stay alert!

Also very important ...

Be sure you've read the December issue and acted upon my recommendation to add to your position in ProShares UltraShort Euro (EUO) at the market with a good-till-canceled protective sell stop at $14.58. The euro is in deep trouble and headed much lower.

Lastly, continue holding your positions in ProShares UltraShort Silver (ZSL) and maintain a protective sell stop at $8.23 good till canceled ... and ProShares UltraPro Short S&P 500 ETF (SPXU), maintaining a protective sell stop good till canceled at $8.97.

Silver is poised for a substantial decline, down to at least the $25 level and probably lower. Meanwhile, the broader stock markets should soon roll over to the downside. The ZSL position is already up 24.9% while the SPXU position is ready to rocket higher as well.

Stay tuned! Although the holidays are quickly approaching, I do not expect the markets to be in their usual light-volume, sideways-type of pre-holiday trading. Not this year!

Best wishes, as always...

Larry