The Current Case For Gold And Silver

Monetary policy coupled with technical indicators mean you "need to be involved in precious metals," according to The Gold Guru founder Greg Weldon.

He likes buying the VanEck Vectors Gold Miners ETF (GDX), which is breaking out versus gold and equities, at current levels.

Other ways Weldon likes playing precious metals include silver miners, and specifically First Majestic Silver (AG).

The Gold Guru founder Greg Weldon told viewers of Technical Trader-part of Real Vision's 2-week special, Recession Watch-that monetary policy "on steroids" means they "need to be involved in precious metals."

Weldon took viewers through a stack of charts showing that gold is breaking out versus paper currencies, gold miners are breaking out versus gold and equities, and silver miners are breaking out versus silver.

The Trade

Weldon likes buying the VanEck Vectors Gold Miners ETF (GDX), at current levels. "Frankly, you just plow right in here, because the risk-reward is still favourable," he said.

Weldon also pointed out that GDX is breaking out against the price of gold, which he says is confirmation that GDX could outperform. It's also "huge for the sector as a whole," he said. "It's something we have not seen since 2016."

Weldon also likes silver, noting that the gold/silver ratio is at a 27-year high. "Silver is on the verge of a breakout," he said, "and silver miners breaking out against silver." Weldon likes buying First Majestic Silver (AG), where he sees potential upside to $20 or higher from current levels of a little under $10.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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