Today's Downgrade of Gold by BAML Sets the Stage For A Powerful Rally !

This morning's headline on MarketWatch.com was:

"Bank of America Merrill Lynch Slashes Gold Call to $1,150 and Warns It Could Get Even Uglier"

In order to gauge the strength or weakness of any market, you sometimes need a major brokerage firm to show you the way. Even after a 28% drop in the price of Gold in 2013, and a 38% correction from its 2011 record high, Gold still seems to have little appeal to research analysts or so-called experts on Wall Street despite mounting evidence that last week's panic lows marked a major turning point in this market.

BAML's Chief Metals Strategist Michael Widmer felt compelled today to join the herd of Gold bears with his own gloomy forecast for the yellow metal.

BAML's bearish forecast for Gold today is among the best contrary buy signals I have ever witnessed. For contrarians, it doesn't get any better than this !

The upside path for Gold prices is now clear !!

In the interest of full disclosure, I am long the following gold/silver mining stocks in my managed accounts: First Majestic Silver (AG), Endeavour Silver (EXK), Agnico Eagle Mines (AEM), Yamaha Gold (AUY), Primero Gold (PPP), and Goldcorp (GG).

Gold and Silver ETF's: Weekly Chart Buy Signals Now Posted

Weekly Chart Buy Signals were generated by my computer trading program for both the Gold and Silver ETF's at Friday's close, January 3rd. Please see the actual charts as attached below.

 

Here are Friday's closing prices in the most popular Gold and Silver ETF's as compared to the panic intra-day lows as posted on Tuesday, December 31st:

 

                                                                          Panic 

                                                                  Intra-day Low      Closing Price

                                                                      12/31/13            01/03/14          Change

Gold ETF  (Symbol GLD)                               114.46               119.29            +4.22%              

Silver ETF (Symbol SLV)                                 18.26                19.42             +6.35%            

 

And here is the latest available physical Gold/Silver coin sales data for the full year 2012 and 2013 from the U.S. Mint:

                                                                                      Gold

2013 Full Year sales of Gold coins                               856,500 oz.

2012 Full Year sales of Gold coins                               753,000 oz.

Year-over-year Sales Increase                                  +13.75%

                                                                                     Silver

2013 Full Year of Silver coins                                  42,675,000 oz

2012 Full Year of Silver coins                                  33,742,500 oz

Year-over-year Sales Increase                                  +26.47%

http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013

Connecting America through Coins

Bottom Line: Despite all the negative talk about gold and silver prices for most of 2013 and so far in early 2014, investor purchases of gold and silver coins from the U.S. Mint remains strong. China, of course, is the biggest wild card in any forecast for gold/silver prices ahead, but I remain convinced that the best trade in 2014 will be the long side for gold/silver mining stocks. 

Gold ETF (GLD) Weekly Bar Chart with Computer Generated Buy & Sell Signals

Silver ETF (SLV) Weekly Bar Chart with Computer Generated Buy & Sell Signals