Taking profits on the silver trade - and maybe on the tax loss trades too

Latest actions taken in the portfolio

Since dropping to $1,630 in early November, gold has enjoyed an incredible $250, 2-month run to $1,880 or thereabouts yesterday. It is now overbought.

Similarly, its antithesis, the US dollar has dropped from 112 to 102, and is now oversold.

While gold has kept on running higher, however, silver has, after a great autumn, been weak. The gold-silver ratio has turned higher and silver looks to me like it might be rolling over.

In the past few days gold miners have also been weak relative to gold.

A typical bull market indicator is for silver and miners to be leading the market higher, which is something we are no longer seeing. That is a concern. It may mean a couple of months or more of weakness or “consolidation” for precious metals. Long-term holders have nothing to concern themselves with, and can sit back and ignore the noise, but those with short-term horizons might think differently.

We covered silver extensively back in September, here and here, when it was in the $18-$19 range, suggesting it could have a multi-week rally. It has been a rocky ride, but we have now had that rally. I warned in December that I would be looking to exit my silver trade in early January and I am now doing that.