By Tom Winnifrith | Wednesday 11 January 2017
Markets may move down soon which may include mining stocks - that is the view of commentator David Skarica who is concerned about the potential for a big debt crisis which could cause a short term deflationary bout, but it may be a great buying opportunity. Commodities will most likely rally into that deflationary period first and be similar to 2001/2002.
Stock markets are over priced and he thinks that we are close to a blow-off top. He suggests going to cash, or being aggressive by purchasing low priced stocks combined with some short positions of overvalued stocks as a hedge. David feels investors should be looking at precious metals over the next six months and cautions not to become too complacent with the markets being this high.
Trump may have difficulty with infrastructure spending due to Republican opposition. China’s economy is still the driving force for commodities and metals. Be wary of iron ore as there is a large supply glut. Many shipping stocks have rallied on news of Trump’s election, and have come back down. He much prefers gold and precious metals at this time, and recommends acquiring positions for the next bull run.
Gold stocks declined in the November-December period as David expected. There has been a very defined downtrend since summer which should change soon- and the market may be setting up for a rally. The dollar has recently dropped, and as a result other currencies such as the Canadian and Australian dollars have rallied a little. All is explained in the latest podcast from Palisade Capital
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