-- Posted Sunday, 25 March 2012 | | Disqus
All in all it was a pretty quiet week in the US markets long with precious metals while we saw a huge and swift drop in terms of US bonds this past week which is not something we see every day but markets seem to be digesting that news rather well.
The precious metals still do not looks great here but are getting closer to finding a low.
Metals review
Gold was flat for the week having risen only 0.02%. Gold is probing for a bottom here but I’m not sure one is quite in yet. There has been no volume spike low yet which is what I’m looking for along with a violation of support levels to really give the old tree a good shaking.
I put the Fibonacci retracement levels in as they show good support. And resistance levels often. Ideally I’d like to see a spike low down to the $1,575 area, not that I’d really like to see it, but it would almost assuredly secure a tradable long-term bottom.
For now we’ve got a flat base building here and a break above and out of it could indicate a bottom is in.
Either way you slice it, this area is a great spot to still be buying physical gold and demand for it has been very heavy lately as gold buyers understand just how cheap it is a the moment.
The gold shares are also dirt cheap here and should begin to be bought in many cases.
Volume in both the GLD ETF and futures market was pretty steady and average for the week which isn’t telling me much at the moment.
Silver dropped a further 1.67% this past week and does not look to be done on the downside to me yet. Please don’t accuse me of being a bear here in the precious metals, I’m just reading the charts and I remain wildly bullish for them in the medium to long-term.
That said, every market needs to have corrections along the way or else it is time to exit the trade. Markets need rest which builds strength for the next push higher and that's all we’re experiencing here although the trigger that set this correction in motion was blatant manipulation as I’ve talked about the past several weeks.
They have won the battle but we are winning and will win the war in the end.
It wasn’t long ago people thought I was nuts to say gold will trade well over the $1,000 level, now a move to that area would devastate people. Oh how things change and the past is so quickly forgotten.
I’d expect a move to the strong support level in silver near $30 and hopefully a washout spike below that.
I put the Fibonacci levels in as well which give us a few other support areas.
Volume in the SLV ETF and the futures market is average and higher on down days than up days which says we have further to fall. There is absolutely no conviction on moves higher yet but that will come in the next few days to a couple weeks at the latest from what I can see.
Platinum dropped 3.26% this past week on heavy volume in the futures market but volume was lacking in the PPLT ETF as not many people are eying this trade.
A break of this wedge pattern will see the $1,560 area hit easily and possibly even a move down to $1,530.
Palladium was smashed 6.64% lower this past week and I totally missed it. In hindsight I can’t believe I missed the very obvious head and shoulders pattern but I did. I happens.
The measured move was hit in only a couple days and now the lows looks to be in on the measured move basis but we shall see about that very soon.
I’m looking for a base to form here before we move higher or even lower.
Volume in the PALL ETF and the futures was very heavy on the huge spike lower Thursday and quite mediocre the rest of the week. Volume is suggesting that we could see prices drop further from here.
Fundamental Review
Ben Bernanke praying on young University children this past week was pretty sickening. He bashed the gold standard repeatedly and falsely but one of the strangest arguments he posed was that while a gold standard may maintain the value of the dollar in the long run that it’s effects are negligible on a year to year basis.
Well that makes no sense to me. Who cares if we don’t notice much difference in a year?
I care about the long-term. After-all the US dollar has lost 98% of it’s purchasing power over the long-term. He basically says he doesn’t care about the future, only about the very short-term, like the next election cycle, or his chairmanships duration.
He sounds like a politician and admitted he does not care about the monetary futures of the youth of this world. What a jackass!
As Pink Floyd would say, “leave them kids alone”. The young university kids are being fed this load of foolishness and most won’t look for the true answer unfortunately.
The gold standard is far from perfect but it’s best and most useful function is that it is a means of accountability and we all know the government needs that or we end up where we are today with massive spending problems and going into more and more debt every single second.
I’m trying to do my part to educate people of all ages and I think it takes an effort by everyone who understand whether it be talking to your kids, grandkids, siblings or even neighbours.
Most people know deep down that something isn’t right and a little simple education is al it takes to open their eyes and join us investors in our insurance, physical precious metals.
We had two banks fail this past week to join 2012’s short list of biggest losers.
It’s now coming to light that Jon Corzine, of MF Global fame, indeed did order directly that customer money be used to cover his company losses. So Bloomberg can get this information but the SEC can’t?
Where is the accountability, and where are the cops?
This is nothing less than theft and it’s been known for a while now but his connections are so far saving him.
Add to that the fact that he testified and lied under oath and Jon must be put behind bars.
Now that this has come to light it will be a very interesting story to follow. His connections run deep, very deep, within the Obama administration and if he’s not prosecuted Obama must be held personally accountable in my opinion.
I’m hearing a hearing is being set for later this week to delve into the matter a bit deeper but Jon Corzine’s name was absent from the list so far.
One of the major reasons being touted for the continued fall in gold prices is the strike in India by bullion traders who are protesting duty increases. It’s still unknown how long this strike will last and it definitely does have a significant impact on physical gold demand although retail buyers elsewhere are stepping up to fill the gap in a huge way lately. They are taking advantage of the sale on physical gold and silver.
A major lawsuit is in the works in South Africa regarding cases of silicosis contracted by many thousands of miners who’ve worked in poor and unsafe conditions over the years. This could be a huge blow to the already fragile mining industry in South Africa and just one more reason I’ve steered clear of investing in that country.
On the other hand Tanzania is quite mining friendly, especially if done the right way, and their gold exports rose to $2.2 billion, and increase of 49%, in 2011 January through November.
I much prefer investing in countries with what I consider to be sustainable practices and less legacy issues. On that note mining companies are on sale nearly as much, in many cases, as they were during December 2011. Those prices quickly doubled in many cases and the others saw increases more in the 50% range in short order.
These are the types of moves we should soon be expecting from our mining portfolios from here on. At least if you’ve got the right mix that is.
Back up the truck!
Enjoy your weekend and week ahead. We’re still eyeing gold and silver very closely for subscribers to let them know as soon as a bottom is in and they can safely fill their boots!
Warren Bevan
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-- Posted Sunday, 25 March 2012 | Digg This Article
| Source: GoldSeek.com
