6/16T2:06 Gold&Silver

Gold & Silver: To hedge or not to hedge...

I think the answer is to not to hedge at this time. Gold is up 1.3% and Silver is up 3.81% today. Over the last few months a big up move like this would be erased over the next day or two so a short of GDX would be appropriate. However, if we look at the daily charts of GLD and SLV we will see that the momentum is slowly but definitely shifting. The MACD histogram is showing dramatic improvement. Every sell off is accompanied by weaker and weaker momentum so that now any up move of more than a day should push the histogram back into positive territory. We are also getting a double bottom buy signal on the stochastic and the DMI is about to cross positive for GLD and already has as of today for SLV.

So, no hedging and perhaps look to add to the long side on 60 min. buy signals.