Golden Apple

Apple, Inc. has a market capitalization of about $750 billion, which makes Apple the largest publicly traded company in the world. And there really isn't a "second place" when it comes to market capitalization. Other great companies, like Exxon, Microsoft, Google, and Berkshire Hathaway have market capitalizations of approximately 50% of Apple.

Why do we care? 

Am I recommending Apple for purchase? NO

Am I recommending Apple for short sale? NO

So why is Apple the most interesting company on the planet to me right now?

Apple is about to introduce its long awaited Apple Watch. Just another time piece? Probably not! At least not when it comes to the Gold market. Yes, the GOLD MARKET !!

The Apple Watch featured on the far right of the above picture is called the "Edition" collection. Early reports indicate it may contain as much as two ounces of gold, with models ranging in price from $5,000 to $7,500 each. There is actually a research report out on the Street right now that forecasts monthly sales of the Gold Edition in the neighborhood of one million units a month!

Is this even possible? Let's go with this incredible forecast, just for a moment. If Apple sells one million gold edition units per month, Apple would need to buy two million ounces of gold per month, or 24 million ounces over the next year. That's 750 tons of gold that would be needed for just one year's "Edition" collection of Apple watches. This kind of demand could easily make Apple the largest buyer of gold in the world, even ahead of China and India (the current largest buyers of gold in the world). In fact, Apple's demand for gold, at 750 tons, would represent approximately 25% of the entire annual mined gold production in all of 2014.

Let's back up a minute. Can Apple really sell one million luxury watches per year? Maybe we can take a closer look at this market and make a reasonable assessment of this outrageous forecast. Rolex, the world's largest luxury watch maker, currently sells slightly less than one million units per year. Since Rolex watches are in the same price range of the new Apple luxury "Edition", I doubt that Apple will sell one million units per month. However, I have personally underestimated Apple's capabilities over the last decade, at least!

So here's the key question then.....Will Apple's entry into the luxury watch market have any impact on gold prices? The answer is definitely YES !!

How soon? The answer is NOW !!

In the interest of full disclosure, I am long both of the most popular Gold Miners ETF's (GDX and GDXJ) with 10% of my assets under management. My objective is to increase this position to as much as 20% over the very near term. 

Gold ETF (symbol GLD) Weekly Bar Chart with Computer-generated Buy & Sell Signals

Gold ETF (GLD) Monthly Chart with Computer-generated Buy & Sell Signals

Special Update: Daily Chart Buy Signals Triggered In Gold Today !

Daily chart buy signals were triggered by my computer trading system today in the following Gold, Silver, and precious metals related investments:

Gold ETF (symbol GLD)

Philaladelphia Gold/Silver Mining Shares Index (symbol XAU)

Gold (major) Mining Shares ETF (symbol GDX)
Gold (junior) Mining Shares ETF (symbol GDXJ)
Silver (junior) Mining Shares ETF (symbol SILJ)

First Majestic Silver (symbol AG)
Yamaha Gold (symbol AUY)
Endeavour Silver (symbol EXK)
Goldcorp (symbol GG)
Primero Gold (symbol PPP)

In the interest of full disclosure, I am long EXK and PPP from the above list of mining shares. I purchased PPP at last Friday's close, and I purchased EXK this morning. I am also short the S&P 500 Index on a ratio of 6 to 1 against my gold and silver shares ($6 short for every $1 long). I shorted the S&P 500 at last Friday's close.

Here are two representative charts from this sector:

Gold ETF (symbol GLD) Daily Chart with Computer-generated Buy & Sell Signals

Gold ETF (symbol GLD) Monthly Chart with Computer-generated Buy & Sell Signals