-- Posted Sunday, 1 April 2012 | | Disqus
US markets eked out small gains this past week but ended the first quarter with very strong results. It was the best Q1 since way back in 1998.
Could we be on the verge of another two year massive run higher in tech stocks which have been performing very well?
Only time will tell but they are doing well and leading the sector for the most part.
IPO’s are coming out pretty regularly and have been received very well and seen huge gains in short order, even while income is dubious in some cases.
While we’re a long ways off from the tech bubble heyday when any company that had anything remotely connected with the internet saw huge gains for no apparent reason, we could begin to see some of that type of froth coming up.
In all honest honesty I thought I’d be talking about a mining share boom by this stage but it’s not yet to be. It will be one day but it’s looking more and more to me that we will see a mini tech bubble here first, or again I should say.
Gold and silver look to have bottomed and that means it’s still a great time to get some awesome deals on some really top quality mining names.
Metals review
Gold rose a slim 0.67% this past week and is now in a trading range between Fibonacci retracement levels.
While I do think gold has bottomed now and it’s time to get your share of the mining shares, I don’t think gold will rocket higher immediately. I am looking for a slower move higher before it is ready to break its major reverse head and shoulders pattern which is more evident on a longer timeframe chart.
This could take a month to two I imagine.
The confluence of moving averages right above here is also going to take some work to better.
Both the ETF volume and the futures volume was pretty average for the week with no real conviction either way.
Silver rose 1.20% this past week and is also range bound within Fibonacci levels here and this can last a while longer. We could see a drop to the $30.50 area and still be ok here but the real test will be moving above the strong resistance level at $33.
I think silver has bottomed here with a slight possibility of a flash spike lower to $30.50 but that is looking more and more doubtful by the day.
The moving average cluster here is also constraining the price for now.
Volume in both the SLV ETF and the futures market was not at all indicative of a strong will to move one way or the other.
Some more work needs to be done before silver can move higher in my opinion.
Platinum move up 1.34% this past week and is getting nice and tight here in it’s wedge pattern. The moving averages are holding the price here like a magnet for now but we can expect a move out of this pattern in the next week or slightly more.
I would have to say I expect a move higher when that move comes.
Volume in the PPLT ETF as well as the futures market is tapering off before we move one way or another and lower volume is healthy as we approach the resolution of this chart pattern.
Palladium fell 0.70% this past week and continues to exhibit a bearish pattern here. The bearish head and shoulders pattern is playing out well and I added Fibonacci levels this week to show where the next stop may be and that appears to be the $627 support area.
The lower lows and lower highs we’ve seen over the past few weeks looks set for one more dip and then we should begin to see a bottoming pattern form.
It’s not pretty but it is what it is for the moment.
Volume in both the PALL EFT and the futures is typical with higher down volumes and then some strength in volume as shorts cover after lower lows are hit.
One more dip and we should be good but then again we will just have to see how the chart looks next week.
Fundamental Review
We’re seeing more and more evidence of a move towards skirting the US Dollar in trade, especially throughout Asia. It’s only a matter of time now until the US Dollar reaches the next step in its lifecycle and that is the loss of the its status as the world’s major reserve currency.
Australia and China have agreed to a $30 billion currency swap to facilitate trade between the two countries in they own currencies, not the US dollar. This follows a recent similar move by China and Japan.
The US dollar is going to be used less and less as time goes on and its value continues to deteriorate. It’s a certainty that the US dollar will continue to depreciate as more and more dollars are printed as the US goes further and further into debt with no chance of ever paying it off, ever!
China will be the dominant world power in terms of money, it’s just a matter of time and they are taking the right steps towards that by stockpiling real goods like commodities and oil along with securing financial and mining arrangement throughout the world and slowly loosening their monetary stance. Al being done peacefully thus far.
Nothing against the US, it’s just a cyclical trend that happens over and over again as history unfolds. No country can remain the monetary power forever and the sooner we all study and understand this the better we can prepare for the change.
Physical gold and silver are a key factor in prospering during this slow change.
Norway sees this as well and is restructuring their sovereign wealth fund to take advantage of it. They are cutting exposure to Europe as they have much of the same issues as the US, and focusing on emerging countries along with the Asia-Pacific region.
South Korea has also reduced US dollar reserves in favour of increases in Australian and Chinese currencies. There is definitely a trend here and I assure you the big players are following suit or even leading the central banks as in the case of the legendary Jim Rogers who now lives in Singapore. He also happens to be very keen on silver.
To finish it all off South Africa is also endorsing the Chinese Renminbi and planning on using it for bilateral trade between the two countries.
The world is indeed shifting gears away from the US dollar.
We only grew this years list of biggest losers by one this past week a one single bank failed late on Friday evening as usual.
A major find of silver coins was found in the Roman Baths last week. Over 30,000 coins were found and they are literally worth a fortune. Amazing!
A new tax was signed into law this past week in Poland on copper and silver mining. As mining companies become more and profitable this will become more and more of an issue and that's why it’s very important to invest in the right countries. Not that they can’t do it also, but hopefully they will be more diplomatic about it if they do.
Canada has finally decided to squash the penny. The country will no longer mint pennies as they cost more than what they are worth. Good riddance I say. They just add up in my change dish anyhow.
To finish off this week’s missive I’ll leave you with another feel good story from the Idol series that’s making the rounds these days. What a voice!
Enjoy your weekend and week ahead.
Warren Bevan
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-- Posted Sunday, 1 April 2012 | Digg This Article
| Source: GoldSeek.com
