Investors frequently hear from experts who forecast that gold or silver is going "up" but they don't give more details than that.
But Roger Wiegand, a mining consultant and investment analyst who runs the stock and commodity newsletter Trader Tracks, is different. He's forecasting exact dollar figures for several resources based on his extensive experience with technical analysis.
We met up with Mr. Wiegand at the Cambridge House resource conference in Vancouver where he was a speaker. While at the conference he also talked about a new radio program called 'Let's Trade', and a book of that same title for traders and investors on Amazon that will come out in October.
We asked Mr. Wiegand about the market and if he could give us a synopsis from his perspective about what is going on right now: "In June [when this interview took place], we're at the tail end of a 'sell in May and go away' situation. We think the markets will move sideways for July and August and then in later August we're looking gold and silver to move higher, first on the futures. September is a good silver month for the futures so we're looking for a good top in silver at that particular point."
Unlike other experts, Mr. Wiegand is not afraid to give specific numbers based on his research. He reported: "As we speak [in early June], silver is about $27. Our forecast for silver by the end of the year is $38.09. Right now, gold is about $1632 to $1648 and we're looking at gold to be a minimum of $1850 and hopefully going up to a high of $1923 by the end of the year."
Our interview moved from the short term to the long term view and Mr. Wiegand had some insight to share with us there, as well: "We're looking at a situation for gold to go as high as $2250, $2450, and even to $2650. Seven years ago I made a forecast for gold as high as $2960. Interestingly, a few months after that, Richard Russell (who writes a good investment newsletter) made the remark that gold and the Dow would cross at $3,000 and our gold price was $2960. That was a 7 year old technical analysis number. Since that time, we've had the impression that gold would go a lot higher – probably in the vicinity of $3,500 to $4,400. We're looking for that to occur as we get more data going into the fall of 2012."
The election could change things up, Mr. Wiegand explained. He told us how things would change economically and even delivered a forecast that some investors might find alarming: "With an election this year, we're thinking that the election may in fact interfere with markets to the extent that the stock market is propped up and the bond market would go sideways or down. Depending on who is elected and what happens, things could become very interesting at the end of the year and going into 2013. It is our opinion – and this is strictly an opinion of ours – that the world economic situation could cause a world war in 2013."
That kind of forecast might surprise some so Mr. Wiegand told us why he believed it could happen: "[War] might happen as a jobs program for governments – that's typically how [governments] get out of a depression. They're calling this a recession. The government says we have unemployment of 8%. But John Williams, our friend at ShadowStats says that unemployment is 22.5%. We see it's more like 25% and we're looking for USA unemployment for 30% next year. Right now, food stamps in the US are somewhere around 46 million. We think it will be over 50 million by next year."
One of the biggest determining factors of the economy next year will be taxes, as Mr. Wiegand explained: "On the tax situation in the US, one of the market-moving events we're looking for in January 1, 2013 is whether or not the Bush tax cuts are going to stay in place. With Congress messing around right now and not doing any work, chances are the Bush tax cut question is going to go right to the end of the year. If there is enough fear at that particular time – either at the election or around the election – the Bush tax cuts could be extended for another year or two. But if the Democrats are in, who knows; they could be in the position to eliminate the tax cuts. If this happens, $500 billion dollars of new taxes will be imposed on this broken economy."
Then, Mr. Wiegand summarized what investors could expect over the next 6 to 8 months: "So this year is going to be very adventurous, quite volatile, with the majority of the negative news coming in the latter half of 2012 with a choppy, non-trending summer. 4th quarter stocks can go up for a period of time. We're looking for a stock market crash in the 23rd, 24th, or 25th of September. If they can keep it propped before the election, that kind of event could be extended into the first quarter of 2013."
Next, we asked Mr. Wiegand what he thought would be a good kind of stock for investors to take a closer look at. Although he didn't name any specifics, he did give investors some guidelines about how they could pick stocks more effectively in this market: "If an explorer [has a deposit that is] next door to a senior operating miner, and they have good reserves and cash to last 24 to 36 months, we think those stocks will be the best picks moving forward."
Mr. Wiegand believes there is opportunity in the market and using his technical analysis, he has outlined an almost month-by-month plan of what he believes the market will do. Investors who are looking to add more stocks to their portfolio may want to do their own due diligence and take a closer look at the market forecast and stock-picking method that Mr. Wiegand has outlined.
Trader Tracks: http://www.tradertracks.com/
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