In a recent article I wrote, Metals and Miners – Don’t Miss Act 2, I discussed the substantial opportunity that is currently setting up for investors that focus on metals and miners. In this article I’ll compare the immediate downside price targets, and long term upside targets for both metals.
To reiterate from my previous article on miners:
It’s rare we see opportunities that provide for a 5x-10x increase - or greater - in capital within 12-18 months, but that’s precisely what’s setting up right now in the precious metals mining sector.
First, allow me to discuss why this is high-confidence. In viewing the weekly chart, note that between January and August 2016 GDX formed an Elliott Wave picture perfect 5-wave move up from $12.40 to $32.01. From an Elliott Wave perspective, after a retrace, 5-wave moves are virtually always accompanied by another 5-wave move in the same direction. Another layer of confidence comes in the form of the consolidation that’s occurred since the since the August 2016 high. The A-wave is another clear 5-wave move down, followed by what can best be described as a year-long choppy pattern that is classic of a B wave. This ABC pattern defines the entire retrace of the move up in 2016, which is what we do know. What we don’t know is if this retracement is a wave 2 of a B wave.
This same analysis applies directly to that of gold, and quite possibly silver. Refer to the daily chart for gold below. Gold completed a picture perfect Elliott Wave 5-wave impulsive structure up off the late 2015 low. Since its high into August, 2016, it’s been forming a retracement that once complete into later this year, will setup the next move higher. The expectation is that after a retrace against the 2016 move up is complete, we would expect a move of similar or larger size to the upside. The question is, will the next move up be a C-wave into the 1,666 to $1,700 region that completes a very large corrective structure before heading to new lows below the 2015 low, or will it be a 3rdwave that sets up substantially higher targets? continue reading this article at Seeking Alpha.