Eyes and Ears and Mouth and Toe... Gold and Silver and Miners will blow!
Gold/Silver in 2024 Symmetry - Deploying risk to the mining side could be the play this year. PMs are in a confirmed stage 2 bull market and it could be time to consider leverage.
First the Gold chart. You will notice essentially the same inverted head and shoulders pattern over and over. It looks like the same chart. That’s because effectively it is!
The leverage of Silver to Gold is about 2x… for now.
Now lets consider the price valuation of the broad gold miner/producer sector to the precious metal itself. Miners and Silver generally lag gold. This weekly close marked a confirmed second candle in a triangle breakout. I expect a head and shoulders pattern to form on this chart over the next 2-3 months.
Now royalty darling Wheaton Precious Metals… We still have 60% move or so in the 2024 tank compared to 30% silver.
Global X gold miners ETF GDX has a tilted version of the head and shoulders. This pattern looks very explosive to the upside. Perhaps it may run 70+% before its retracement.
As you can see from the progress in each of the patterns, the entry opportunities are still in the highest quality gold and silver mining stocks.
Even more leverage?
Currently I’m in a January 47/65 bull call spread on Wheaton (WPM). I purchased around $7.50 and have a sell target of $16. This is roughly an additional 2x leverage on WPM. Vis a vis 4x on silver and 8x or so on gold. Don’t try this at home! The profit target is defined by the diagonal line in the following chart. I have a fairly high confidence in the is playing out, but if something unforseen occurs, I have strict rules to cut losses or manage the position to limit downside.
