Charts Predict: Avoid Ghouls with a Silver Bullet

Investors looking for havens to hide their cash are faced with only “ghoulish” options, but the Swiss franc, German Bobl and silver are the best of a bad bunch, Nicole Elliott, technical analyst from Mizuho Corporate Bank, told CNBC.

“The parade of ghoulish, tarted up or sick choices that I’ve got in front of me is worse than chucking out time on a Saturday night,” Elliott said. “It’s getting worse rather than better,” she added.

Investors should first decide which currency to park their cash in and the Swiss franc is the “least of all evils,” according to Elliott.

“It’s not in the euro zone, it’s a small country, there’s not too much of it about. It is extremely expensive, but then like all quality things, they’re always expensive,” Elliott said.

“I would prefer to be in this than just about anything else,” she added.

The bond market has seen a flurry of activity in recent months as cautious investors look for safety in the face of widespread stock weakness. But it’s now a crowded trade and the only real option is the German Bobl, according to Elliott.

Watch the full interview with Nicole Elliott above.

The German government securities, issued with a 5-year maturity, are “definitely quality instruments and I think they’ve got some catching up to do with the Shatz (German government debt with two-year maturity), which has been in an absolute feeding frenzy,” Elliott said.

The current Bobl yield of around 2.2 percent should drop to 1.6 percent and it has “the right combination of maturity and quality,” she said.

In the precious metal space, Elliott recommends silver over gold and says gold is very expensive in comparison.

“If we can start holing above $14 (an ounce), we should quite easily get back up to about $18 and a half, $19,” she said.

Investors buying silver will need a shovel, however, because “what you then do is dig a great big hole in the back of your garden and hide it from the bankers,” Elliott said.

For the Investor:

Pros Say: Euro-Dollar at $1.20; Gold at $1,000
Predator or Prey? Chart the Better Deal