-- Posted Sunday, 11 December 2011 | | Disqus
It was actuality a pretty quiet week all in all with no decisions on Europe, just meetings. Of course most all of Europe was put on watch by a prominent U.S. Ratings agency but in my eyes they are so far behind the curve that they nor their ratings matter and the markets largely reflected that view.
The major event was Jon Corzine testilying and as was expected he didn’t seem to know much or offer any real tidbits. He’ll likely get away with what he’s done and be allowed to continue to play dumb, but I assure you he’s anything but dumb and knew exactly what was transpiring as the company spiralled out of control and ultimately failed.
We really didn’t go anywhere all week in the markets after the huge move higher the week before and that is great as we need rest if a rally is to continue.
We can expect some news out of Europe this coming week and the way most charts and index charts are setting up it’s looking like good news is expected, and I would welcome it.
Not that good news will truly be good, it will just be a bailout, but it will prop up markets likely into the end of the year, but one way or another the massive debt crisis is slowly coming to a head and that’s why I believe physical possession of physical gold and silver remains the best core asset one can have in a portfolio.
In that vein I know it’s a very busy time of year for shopping and holiday preparation so I’ll keep today’s newsletter short and to the point so as to respect your time.
And I do thank you very much for your time in reading my weekly work and even more-so to subscribers who read my daily thoughts and charts in a much more real and concise fashion.
Metals review
Gold slid 1.95% this past week and is still trading in the large triangle pattern. You can draw two lines for the lower end of the triangle as I did but either way you do it, a resolution is coming quickly.
We may see another week in this triangle but the price action is now so tight that it’s unlikely to last that long. It could be a fun week for gold longs as our next leg higher looks to be on our doorstep.
The GLD ETF saw consistent volume all week which is fine as we’re still chilling out in this triangle. What was interesting was the futures volume in the chart above. Thursday saw the heaviest volume for the week as gold tried to break out of the triangle but was shot down.
This is tell tale action that somebody doesn't quite wasn’t gold to go higher yet but their time is limited.
Right on cue a report surfaced that joint central bank selling of gold on Thursday was the major factor in the decline. Even without this report you had to have that feeling as gold was on the cusp of breaking out and then huge volume surfaced pushing it lower and keeping it within it’s chart pattern.
It will just look better if Europe can at least agree on some sort of plan before gold rips higher. The last thing authorities want to see is gold flying in the face of such major economic uncertainty, that would only solidify the view that we are indeed in between a rock and a very very hard place. I suggest they get their act in order now because gold is ready to go.
That being said I suppose we have to also consider the time of year. We should begin to see traders taking off for the year later this coming week, and with that volume could and should drop making it easier to push stocks and commodities around.
While the technical picture for gold looks very very good indeed, the time of year may be conducive to allowing a false breakdown in gold or just prolonging this triangle past it’s due date.
I know I’m a bit wishy washy here but I have to be realistic and consider that we are coming upon a thin trading time of year.
We’ll see but any correction would be a Christmas present to you to buy a few more coins while traders may just have to wait a little longer for the breakout buy point.
The fact that large gold buyers are having trouble acquiring physical is encouraging though, as a major miners CEO was interviewed this past week he told of large buyers contacting the company directly in hopes of buying physical gold from the company and skipping the now dodgy futures market.
This is a major shift and speaks volumes about the lack of trust in the futures market now after the failure and robbery undertaken by MF Global.
Silver fell in lock step with gold and only fell 1.53% on the week. It’s in a triangle pattern here as well and much the same can be echoed in regards to silver as I just talked bout in gold.
We shall see soon if the metals are going to pop for us before the year’s out or if we wait until the new year.
Personally I could care less. Building wealth is a marathon, not a sprint so minor setbacks are fine with me.
This is the time of year where you’ll be flooded with predictions for the upcoming year and most of them will be wrong.
I’m not in the predicting business as I’m not psychic nor do I have a crystal ball. I am pretty darn sure though that gold and silver will be higher in 2012 than in 2011 by years end and I’m even surer that the worlds powers will be in more debt next year than this year.
These predictions or feelings fit my style as I’m heavy into the metals until things change on the macro-economic front and the rest of the portfolio is set up to react to things as they come.
It works for me, and if you’re struggling I suggest you try my style out.
The SLV volume was nothing to really talk about and it’s typical of consolidation periods so I can’t say much about it.
Let’s see how the end of the year plays out and react accordingly.
Platinum dropped 2.82% on the week and continued lower in its downtrend channel. It definitively broke support just under $1,550 and now looks headed lower to at least the $1,450 area.
I’d not be stepping into this market as a trade, nor buying physical platinum at the moment. You’re likely to get a better deal over the fast approaching holidays.
The PPLT ETF volume for the week was pretty good and above average which is telling me we have more downside to go.
Palladium was once again the star this week rising 5.67%. I don’t really know why, nor do I know the numbers specifically but I do know palladium jewellery has been hot and is on fire this holiday season.
Maybe the fact the The Ellen Show gave away some palladium jewellery and pumped it a bit during their 12 days of Christmas giveaway also had something to do with the current frenzy.
I do know palladium looks great right now and is set for more if it can clear the 100 day moving average right here.
This could be a nice end of the year trade here and I’d be expecting a move to test the 200 day moving average at $725 if we move higher from here.
The PALL ETF volume was above average but steady and by no means excessive which says this move has legs. We’ shall soon see with traders about to take off for the year but I may take this trade in the near future.
Again, thank you for reading and supporting my work. If it weren’t for you dear readers and subscribers I’d keep this all to myself. I really to enjoy conversing with so many of your brilliant minds.
Until next week take care and thank you for reading.
Warren Bevan
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-- Posted Sunday, 11 December 2011 | Digg This Article
| Source: GoldSeek.com
