Is Gold Still The Most Hated Asset Class?

Gold traded at $1,297 today and silver traded at $18.07. It seems like yesterday when almost everyone on the planet was proclaiming the "end-of-days" for the yellow metal and $1,000 gold (or lower) was forecast by many to be inevitable. Of course, at the same time there were quite a few silver bears who were sure that silver would trade below $12.00.

Facts:

Gold traded down to a low at $1,130 on November 7th, 2014. It's now 14.5% higher at $1,294.

Silver traded down to a low at $14.16 on December 1st, 2014. It's now 27.4% higher at $18.04.

Most gold and silver mining shares are now up more than 50% from their mid-December lows!

Perhaps gold and silver are no longer the most hated asset class?

Like many investment advisers, I worry every day about the potential "big surprise" that will upset my grand plans for superior investment performance and exceptional risk/reward potential. My wife tells me almost every day that "markets are fixed" with U.S. stocks destined to head higher, while alternative investments like gold and silver will suffer surprising setbacks even in the most "friendly" precious metals environments. Even though I don't think she's right about stocks "destined" to move higher or gold destined to move lower, I do hope she's right about the markets being "fixed", or at least a little fixed. The reason why I hope the markets are at least a little fixed is because I don't think that "smart money" or the "fixers" can hide from my computer-based trading system.

And now back to Earth.....

1. The rally in gold, silver, and related precious metals mining shares is extended and due for a pause (or even a minor correction).

2. Given the extent of the rally in gold and silver prices since late last year, I think gold and silver mining shares should actually be much higher than they are now. This worries me!

3. Everyone is expecting a "bazooka" sized monetary easing from the European Central Bank this coming Thursday, January 22nd. Given last week's SNB shocker, can we really trust the major central banks to follow through on even their strongest rhetoric? If the ECB fails to deliver this Thursday, then gold and silver prices will fall sharply for several days, at least. I would prefer to be on the sidelines during this potential risk.

Here at $1,300 gold and $18.00 silver, I am not sure there is an edge for gold and silver investors. The "hate" just isn't there anymore! While there are still plenty of bears, the bullish camp is no longer in hibernation!! It's time to liquidate precious metals investments, or at least scale back significantly. And no frowns please, as gold and silver mining shares have been the best performing stock sector so far this year, with no other sector even close!! The benchmark Philadelphia Gold/Silver Mining Stock Index is now up 19.32% year-to-date. The next best performing group is Biotech with a 7.09% gain. The S&P 500 Index is down 1.77% year-to-date, and almost every other sector is also in negative territory this year so far!