Mining for Money: Gold Bangs Its Head

Gold is fast approaching a “break out or fake out” moment. The big money is likely laying even bigger bets. And the volatility in the next week could be enormous!

What do I mean by that? Check out this chart of the SPRD Gold Trust (NYSE: GLD), the world’s biggest physical gold ETF. It tracks the price of gold very closely.

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You can see gold’s shorter-term uptrend. You can also see a downtrend that started in August of last year.

Gold and the GLD are banging up against that downtrend right now. That has caused gold to pause and pull back a bit.

Naturally, today’s pullback in metal is multiplied in gold miners. Traders have racked up a sweet week of gains. Now they’re ringing the cash register and running for the exits.

That kind of short-term thinking isn’t the way to play this. Gold requires a long game.

The next few days should tell us whether gold is really breaking out. Or, if it’s a fake out, and gold has to go back and test its uptrend again.

This morning, in my article “Getting Religion on Gold,” I told you about long- and shorter-term forces that are lining up to drive the gold price higher.

But in the very short term, Washington politics could be key, as entrenched powers fight over health care, taxes and more.

This is edge-of-your-seat stuff. We could see huge swings in either direction. And while I strongly believe the big trend is higher, a short-term pullback wouldn’t be surprising. Heck, this market is so volatile, they should rename gold, “dynamite”!

You don’t have to buy anything ahead of the next big break — there will be plenty of time to hop aboard gold’s next big bull run.

But if you’re the type who looks for sweet entry points, a politics-related pullback could be just what you’re waiting for.

P.S. I’m putting the finishing touch on a virtual goldmine of my favorite microcap stocks in the metals and mining space. And I’m planning to unveil these to our very best subscribers in the coming weeks. If you’d like me to notify you about not only what to buy … but also precisely when … just let me know by clicking this link here.

Sean travels far and wide to seek out small-cap values in the natural resource sector. His journey started in New England. As a youth he worked on Mt. Washington, on the cog railroad that runs to the summit.