Gold/silver/copper/bitcoin: your 2021 portfolio
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Wow, we finished the week with a bang! The U.S. election is now less than a month away, and the fight for more or less stimulus seems to be the only thing anyone is talking about these days. That argument is causing high volatility levels in the markets that you can use to your benefit for positioning into 2021. For instance, just this week, we saw a $2 range in silver, $59 in gold, $58 in platinum, 17.75 cents in copper, $640 in bitcoin, $4.50 in crude oil, and the list goes on and on. See if the two parties can agree on a stimulus package that will pressure the dollar, causing another surge in inflation expectations. Still, if talks break down, another washout will occur, giving you opportunities to build your 2021 portfolio.
Regardless of who wins the election, we will face zero interest rates for multiple years, and the fed will continue to expand its balance sheet to help support the economy. Easy money and government spending will help support gold over the long run reaffirming our $2275 Q1 target. Given that each candidate has different policies, we created a new free "Election Trends Booklet," this booklet provides you with just the facts about how investors are positioning into the election. You can request your here: Election Trends Booklet
China has been on holiday all week and reopened last night. Gold was the first to surge upon China buying, and the Chinese Yuan followed closely behind. The Yuan is at the highest level since April 2019. We are continuing to monitor major three-star resistance at 1933-1937, a level in which we plan to trade against until it proves it will break out above in the event this renewed buying from China dries up.
Silver, on the other hand, was particularly volatile this past week, but now is the time to start taking your exposure up using a scale approach similar to what we used in gold. In 2021 we should see a green transition through a lower hydrocarbon economy that will radically boost demand for solar panels, and we want to front-run that demand. I believe that having both precious metals and industrial characteristics is the one-two punch that will cause it to see $40+ in 2021.
Remember, when precious metals begin to take off again, silver generally moves much faster than gold. Conversely, when a gold correction happens, silver falls twice as fast; therefore, manage your position size appropriately. It is going to be a wild ride.
Our gold strategy
If you have been working with us and you were and are looking to position in gold for the long run; we suggested that our clients consider using FOUR Micro 10 oz December Gold contracts per $25,000 and buying TWO at 1910 and TWO at 1855, with a stop at 1790. Doing such would ideally risk $3,700. We would look to a gold target of 2275/oz, which would allow for a profit of $15,700. We are now accepting requests for a complimentary 2021 Futures Calendar & Reference Guide with a limited supply. The guide is your go-to resource for government & industry report dates, contract specifications, futures, and options expiration dates. *Available to U.S. residents only. You can request yours here: Blue Line Futures 2021 Pocket Calendar.