Newsroom
The Week in Review – March 30th, 2012
March 30, 2012
It was another rollercoaster week regarding news out of the Federal Reserve. Chairman Bernanke, apparently not content with media outlet analysis that his comments last week meant further QE was totally off the table, started the week off saying that further QE was most definitely still an option available to the Fed if it was deemed necessary.
Initial claims for unemployment fell to their lowest level since April of 2008 according to a report from the Labor Department on Thursday. The positive spin the media put on this was dampened by the fact that the decline from the prior week’s levels was much smaller than economists expected. Mr. Bernanke was again quick to point out that the US recovery was still relatively weak.
Eurozone finance ministers announced on Friday that the lending ceiling for their bailout funds was being raised to a combined total of 700 billion euros, up from the existing 500 billion euros. Additional statements by Austrian Finance Minister Maria Fekter put the figure closer to 800 billion euros, but analysts projected that figure may include money that had already been spent in other areas and was just meant to manufacture bigger headlines to wow investors.
In Greece, Prime Minister Lucas Papademos said on Friday that the debt laden country may need yet a third bailout if the austerity measures it has put in place at the demand of the rest of the Eurozone fail to restore market confidence in the Greek economy. Papademos told Il Sole 24 Ore, an Italian business daily, that “Greece will do everything possible to make a third adjustment programme unnecessary. Having said that, markets may not be accessible by Greece even if it has implemented fully all measures agreed on.” The sovereign debt situation in Greece, it seems, is virtually interminable.
Moody’s Investors Service said it will decide in mid-May whether to lower its ratings for 17 global financial companies including the likes of Morgan Stanley, Bank of America and Citigroup. If ratings cuts do go through for those three banks it will mean that they will all have to put up possibly billions of dollars more in collateral to back their trading contracts and that may have far reaching effects on these banks ability to do business with the rest of Wall Street.
Chinese economic data out on Friday is still fueling concerns that China’s economy will see further slowdown and contraction. Despite the inflation rate hitting 20 month lows, economists do not expect China to loosen its monetary policies yet due to inflation fears from high oil prices a property market whose value remains substantially overinflated.
Crude oil dropped into the lower $100 a barrel range amid headlines that a release from the Strategic Petroleum Reserves may be imminent in both the US and Europe.
The euro once again moved higher against the dollar for most of the week, reversing course at the tail end of the week on concerns over Spain and Italy and news from Standard & Poor’s that Greek debts may need to be restructured yet again. The Japanese yen struggled against a decline for much of the week but looks to end the week higher against the dollar.
Friday to Friday Close
| March 23rd | March 30th | Net Change | |
|---|---|---|---|
| Gold | $1662.00 | $1669.00 | 7.00 + 0.42% |
| Silver | $32.25 | $32.48 | 0.23 + 0.71% |
| Platinum | $1625.00 | $1636.00 | 11.00 + 0.68% |
| Palladium | $656.00 | $652.00 | (4.00) – 0.61% |
| Dow Jones | 13080.73 | 13194.93* | 114.20 + 0.87% |
Month End to Month End Close
| February 29th | March 30th | Net Change | |
|---|---|---|---|
| Gold | $1710.00 | $1669.00 | (41.00) – 2.40% |
| Silver | $34.55 | $32.48 | (2.07) – 5.99% |
| Platinum | $1690.00 | $1636.00 | (54.00) – 3.20% |
| Palladium | $705.00 | $652.00 | (53.00) – 7.52% |
| Dow Jones | 12952.07 | 13194.93* | 242.86 + 1.88% |
Previous year Comparisons
| March 31st, 2011 | March 30th, 2012 | Net Change | |
|---|---|---|---|
| Gold | $1438.00 | $1669.00 | 231.00 + 16.55% |
| Silver | $37.92 | $32.48 | (5.44) – 14.35% |
| Platinum | $1779.00 | $1636.00 | (143.00) – 5.69% |
| Palladium | $777.00 | $652.00 | (125.00) – 12.18% |
| Dow Jones | 12319.73 | 13194.93* | 875.20 + 7.10% |
* Current at time of writing
Here are your Short Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
|---|---|---|
| Support | 1640/1625/1600 | 32.00/31.60/31.00 |
| Resistance | 1675/1700/1720 | 32.75/33.25/34.00 |
| Platinum | Palladium | |
|---|---|---|
| Support | 1620/1600/1550 | 640/615/600 |
| Resistance | 1660/1700/1740 | 660/680/700 |
Volatility should be expected to continue and may even increase. It was hard to filter through the noise this week as all the major media outlets seemed bent only on reporting about the massive “Mega Millions” jackpot that is due to be drawn in the US later on Friday. Spain experienced a general strike on Thursday in protest of the austerity measures which the country has been forced to implement to try to reign in its spiraling sovereign debt and avoid a Greek style bailout. The strike disrupted transportation through several regions and at times became violent. There is vast concern that drastic austerity measures may put further contraction pressures on Spain’s economy, which already appears to have dipped back into recession during the first quarter. In Greece, the idea has already been floated that the bailouts which the debt laden country has received so far still may not be enough to drag it back from the brink of bankruptcy. Amid all the turmoil regarding oil and the continuing sovereign debt woes in the Eurozone, the gold and silver markets have been remarkably quiet over the last two weeks. James Turk, in an interview with King World News this week said, regarding the unusual quiescence, “It is something that you might expect in August during the middle of summer holidays, but not here in March – particularly with a quarter end approaching.” Mr. Turk continued, saying “But this quiet we are seeing masks an important development. Almost every day for the past couple of weeks gold and silver have tested critical support, which is $1650 for gold and $32 for silver. And every time the precious metals dipped below these price levels, they bounced back. One can only conclude that support at these levels is solid.” Mr. Turk continued in his interview, saying “If gold and silver close the week above $1650 and $32 respectively, I think it will then be safe to assume that this long and tedious correction of precious metals prices is over. Sentiment is near rock-bottom as everyone’s patience is being severely tested, even the old-timers. That is another reliable sign saying that we are near an end of this correction. The longer the correction, the bigger the base that is formed. The bigger the base, the more prices will soar when they finally start heading higher.” Rumors abound that the US and Europe are close to reaching an agreement on releasing oil from their Strategic Petroleum Reserves in an effort to combat spiraling oil prices, but any effect on prices is expected to be short lived just as it was the last time a release from the SPR was made. It is worth noting that it was exactly at this time last year that gold and silver both began their record setting moves to the upside amid a global environment that, if anything, was in better shape than it is today. The manipulation that has run rampant since the record moves of last year seems to have grown more and more desperate in recent months leading many analysts to feel that the end of that manipulation is very near and that the ensuing price moves afterwards will be vilent and explosive to the upside. Wise investors appear to have been taking advantage of the recent buying opportunities to add additional precious metals to their portfolio since the fundamentals driving the prices higher appear to remain unchanged. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.
Trading Department – Precious Metals International, Ltd.
© 2013, Precious Metals International Ltd.
www.wwpmc.com
The Week in Review – March 30th, 2012
Posted by Worldwide Precious Metals on Friday, March 30, 2012
The Week in Review – March 23rd, 2012
March 23, 2012
What a week! Stock markets and precious metals markets both took a beating this week, apparently solely on headlines, fear and emotion. This appears to be just another buying opportunity in precious metals and many noted analysts and investors have publicly stated that they are doing just that.
Initial claims for unemployment fell to their lowest level since February of 2008 according to a report from the Labor Department on Thursday. The enthusiasm over what appears to be a recovering jobs market was somewhat dampened this week by news of economic contraction in China for the fifth straight month. A “hard landing” in China and sustained high oil prices may create pressures on the US’ own fledgling recovery and send employers scrambling to cut costs once again.
The Bank of England’s Financial Policy Committee, a newly created risk assessment committee for the central bank, said “the committee remained concerned that capital was not yet at levels that would ensure resilience in the face of prospective risks. It therefore advised banks to raise external capital as early as feasible”. On Wednesday, the BoE raised its inflation forecast for the next two years to 1.8 percent, higher than economists’ expectations and leading some to speculate that additional quantitative easing stimulus may not be an option for the Central Bank in the near future.
The honeymoon appears to be coming to an end in the Eurozone less than a month after the much publicized Greek debt swap deal. Bond yields are beginning to rise again in Spain and Italy, with Spain appearing to be in the worst shape. William Buiter, chief economist at Citi, said in an interview with CNBC “There will be a further restructuring of Greece and Portugal, Ireland is at risk, and Spain has been deteriorating spectacularly in the recent past in terms of its public finances. There’s still far too little sense of urgency, and the facilities that are available at the moment are not really adequate if Spain becomes a troika program country.”
Housing data was mixed this week. KB Homes quarterly report showed that the company experienced an unexpected loss and the housing data reflected in their report was just miserable. In the market as a whole, overall sales of new homes were unexpectedly down in February, but home prices increased to their highest levels in eight months. Until the glut of foreclosed and distressed properties works its way through the market, housing data will continue to be suspect.
China was this week’s news mover with a fifth consecutive monthly decline in its factory activity. Analysts have been projecting a slowdown in China’s economy since last year but many had stated that they expected it would be a “soft landing”, or a gradual easing of China’s economy. The latest figures now have those same analysts saying there may be a “hard landing” underway and that China’s economy may drastically contract in the coming months.
Crude oil continued its run in the upper $100 a barrel range. Continuing tensions between Iran and the rest of the world over its nuclear ambitions appear likely to maintain pressure that may keep oil prices above $100 for an extended period. As economic sanctions imposed by the US and designed to pressure Iran’s oil sales take effect, there may yet be even more upward pressure on oil prices.
The euro moved higher against the dollar much of this week but reversed direction by the end of the week apparently over concerns about rising bond yields in Spain and Italy. The Japanese yen continued its decline against the dollar for most of this week, but appears to be ending the week essentially sideways.
Friday to Friday Close
| March 16th | March 23rd | Net Change | |
|---|---|---|---|
| Gold | $1655.00 | $1662.00 | 7.00 + 0.42% |
| Silver | $32.60 | $32.25 | (0.35) – 1.07% |
| Platinum | $1675.00 | $1625.00 | (50.00) – 2.99% |
| Palladium | $700.00 | $656.00 | (44.00) – 6.29% |
| Dow Jones | 13232.62 | 13040.77* | (191.85) – 1.45% |
Previous year Comparisons
| March 25th, 2011 | March 23rd, 2012 | Net Change | |
|---|---|---|---|
| Gold | $1426.00 | $1662.00 | 236.00 + 16.55% |
| Silver | $35.06 | $32.25 | (2.81) – 8.01% |
| Platinum | $1723.00 | $1625.00 | (98.00) – 5.69% |
| Palladium | $747.00 | $656.00 | (91.00) – 12.18% |
| Dow Jones | 12220.59 | 13040.77* | 820.18 + 6.71% |
* Current at time of writing
Here are your Short Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
|---|---|---|
| Support | 1640/1625/1600 | 31.80/31.40/31.00 |
| Resistance | 1680/1700/1725 | 32.50/33.00/34.00 |
| Platinum | Palladium | |
|---|---|---|
| Support | 1600/1580/1550 | 650/620/600 |
| Resistance | 1650/1700/1740 | 680/700/730 |
Volatility should be expected to continue and may even increase. It is important during the next few weeks and months to be agile and ready to move when buying opportunities such as the one experienced this week present themselves. The price manipulations that have been occurring in the precious metals markets are now being discussed, publicly and openly, by those that once scoffed at it and relegated it to conspiracy theorists. The obvious manipulative events that have been occurring with what seems to be an increasing air of desperation make it difficult for even the staunchest of naysayers to deny that it is happening and still remain credible. John Embry, Chief Investment Strategist at Sprott Asset Management, said in an interview with King World News this week, regarding this week’s price action in precious metals, “I wouldn’t worry about it; I think you’re talking $50 to the downside on gold and thousands of dollars to the upside. These guys [manipulators] are really working on it relentlessly, which suggests to me there are more problems behind the scene than even I imagine.” Mr. Embry continued, saying “This is just a wonderful opportunity to acquire physical metal and I suspect the Eastern central banks and the wise people are doing exactly that. If we’re not at a bottom, we’re very close to it. The sentiment is dismal and you can particularly see that in the [gold] stocks which are almost tragic. I’m shocked quite frankly at the valuations and how low they are. In the fullness of time, this will be seen as one of the great buying opportunities of all-time.” When asked about silver, Mr. Embry said “Nothing has changed. The supply/demand is powerful.” Mr. Embry continued, saying “The only thing you’ve got to focus on is the amount of physical silver that’s available in the world and the demand for it. The demand for it is overwhelming. Eventually this is going to take out these paper shenanigans which have kept the price under wraps to date.” The economic slowdown in China, if it is indeed a “hard landing”, may add massive headwinds to the economic recovery that seems to have been getting under way in the US. Add sustained high oil prices to the mix and not only will consumers be forced to cut back further on their spending, producers and manufacturers will be forced to begin cutting costs again to remain profitable. The logical place for those corporations to begin cutting would be scaling back on their labor force again. The Eurozone economy is showing signs of contraction as well, which does not bode well for those countries that have been forced to implement crippling austerity measures to try to bring their sovereign debt under control. No amount of austerity in those debt laden nations will help bring their debt down if their economies continue to contract while they continue to rack up additional debt in the forms of bailout loans. Wise investors appeared to be taking advantage of the buying opportunity presented this week to acquire additional precious metals. Jim Rogers, a near legendary investor, told CNBC’s Fast Money anchor Melissa Lee this week: “At $1,600, gold would be a buy.” Rogers said he would continue to accumulate even if the metal went lower, saying “Gold is going to go much higher – and silver – over the next decade.” If gold and silver behave as these analysts all expect, now may be a perfect time to purchase additional product in preparation for what may potentially be record setting price moves. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.
Trading Department – Precious Metals International, Ltd.
© 2013, Precious Metals International Ltd.
www.wwpmc.com
The Week in Review – March 23rd, 2012
Posted by Worldwide Precious Metals on Friday, March 23, 2012
The Week in Review – March 16th, 2012
March 16, 2012
Initial claims for unemployment in the US fell back to four year lows last week leading many to cite that this was further proof that the US economic recovery was picking up steam. Stubbornly high oil prices however have led to the biggest increase in producer costs in five months which may lead manufacturers to start implementing cost cutting measures again, including layoffs. There is also growing concern that the unusually warm winter this year may have shifted some of the demand for manufactured products forward as consumers in the northern US were able to get out and make purchases in the warmer weather.
Consumer sentiment dropped according to the Thomson Reuters/University of Michigan’s preliminary reading for early March. The decline appears to be due mainly to rising gasoline costs which are starting to squeeze the wallets of consumers who are cutting back on discretionary spending as a result. US consumer prices increased the most in 10 months in February according to the Labor Department’s Consumer Price Index.
Details of the next Greek bailout have been trickling out of Europe this week, with the European Financial Stability Facility reportedly contributing 109.1 billion euros. The International Monetary Fund will also contribute 28 billion euros which it will pay out to the embattled country over four years. According to Klaus Regling, chief executive of the EFSF, 48 billion of the 109.1 billion euros will be used to recapitalize Greek Banks, leaving 61 billion euros left for “normal program financing”.
Jobs in the Eurozone continue to be difficult to find according to Eurostat, the EU’s statistics office. Francois Cabau, an analyst at Barclays Capital, said in a research note, “Looking ahead, our hiring intention indicators continue to show ongoing weakness in all countries apart from Germany where it has stabilized at fairly high levels. In other countries, the pace of deterioration has continued to be fairly steep since the beginning of the year and therefore does not bode well for future employment prospects.”
Delinquency notices for US homeowners rose 1 percent in February according to a report from RealtyTrac. Signs are beginning to appear that the backlogs of foreclosures that have been sitting in the system as a result of the “robo-signing” scandal are beginning to move through the process once again. This may result in another sudden dip in housing prices as these distressed properties go on the market, driving prices for surrounding properties down further once again.
On Tuesday, the US Federal Reserve released its policy statement this week reiterating its intention to keep interest rates low through 2014. There was one dissenter to that decision this time however and continued high oil prices may force the Fed’s hand into an earlier rate increase if inflation targets are exceeded as a result. The Fed also released the results of its “Stress Test” of financial institutions this week. It was forced to release them earlier than it had desired by JP Morgan’s early announcement that it would increases its dividend. That announcement was effectively JP Morgan thumbing their nose at the Fed and announcing early that it had passed its “stress test”.
On Wednesday, Fitch ratings agency revised their outlook on the UK’s AAA credit rating from “stable” to “negative” citing “very limited fiscal space to absorb further adverse economic shocks.”
Crude oil remained in the mid-$100 a barrel this week despite headlines and rumors that the US and UK had reached an agreement to release oil from their strategic reserves. Continued geopolitical tensions in the Middle East are expected to maintain upward pressure on prices.
The euro dropped sharply against the dollar again this week and the Japanese yen continued its ongoing plummet as well.
Friday to Friday Close
| March 9th | March 16th | Net Change | |
|---|---|---|---|
| Gold | $1710.00 | $1655.00 | (55.00) – 3.22% |
| Silver | $34.20 | $32.60 | (1.60) – 4.68% |
| Platinum | $1682.00 | $1675.00 | (7.00) – 0.42% |
| Palladium | $707.00 | $700.00 | (7.00) – 0.99% |
| Dow Jones | 12922.02 | 13247.42* | 325.40 + 2.52% |
Previous year Comparisons
| March 18th, 2011 | March 16th, 2012 | Net Change | |
|---|---|---|---|
| Gold | $1416.00 | $1655.00 | 239.00 + 16.88% |
| Silver | $35.06 | $32.60 | (2.46) – 7.02% |
| Platinum | $1723.00 | $1675.00 | (48.00) – 2.79% |
| Palladium | $731.00 | $700.00 | (31.00) – 4.24% |
| Dow Jones | 11858.52 | 13247.42* | 1059.98 + 2.53% |
* Current at time of writing
Here are your Short Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
|---|---|---|
| Support | 1640/1625/1600 | 32.10/31.60/31.00 |
| Resistance | 1650/1680/1720 | 32.75/33.00/34.50 |
| Platinum | Palladium | |
|---|---|---|
| Support | 1660/1625/1600 | 690/660/640 |
| Resistance | 1700/1750/1780 | 710/725/750 |
Volatility should be expected to continue. Friday was a “Quadruple Witching Hour” day, meaning it is options expiry day. Why is this important? With uncanny regularity around options expiry days, there seems to be a downward manipulation event in precious metals prices. This week’s price smash down appears to have been just that; another manipulation event carried out on yet another options expiry and under additional cover of some mildly positive economic news out of the US. Wise investors appear to have viewed it as just another buying opportunity to add more product to their portfolios on what looks to be another manufactured and temporary weakness. It is important in these volatile times to deeply analyze all of the news that is available, not just the headlines that the media pundits repeat on television. The fundamentals that have been driving precious metals higher appear unchanged. Inflationary pressures are on the rise in the US, triggered by stubbornly high oil prices. World markets seem to be viewing the fact that Greece, riddled by debt, was still able to secure yet another bailout loan, increasing their debt load further in the end game, as a positive event for some reason. Unemployment in the Eurozone, with the lone exception of Germany, is running rampant and unemployed consumers mean further economic contractions. The situation in the Middle East remains unresolved, and opinions are starting to circulate that the sanctions against the Iranian oil industry may actually trigger a renewed “gold standard” in the region. The thought process is that Iran, cut off from its ability to secure international financing, will simply begin accepting gold as payment for its oil. The tension in the Middle East also is leading to sustained higher oil prices, leading to rumors that the US and UK might release oil from their strategic reserves. Both countries were quick to deny the rumors, but the wild price swings surrounding the unsubstantiated report show just how much emotion, fear, and media spin are driving markets these days instead of true fundamentals. This week’s manipulation has given the spin factory more ammunition to talk down the prices of precious metals, but the facts remain that, globally, sovereign debt is completely out of control. The US is facing another massive budget deficit this year. The best that could be said about president Obama’s newly revealed budget this week was that it would add less to the nation’s debt (only an additional $6.4 trillion in deficits between 2013 and 2022) than simply extending existing policies. China, long touted as the recovery engine that has been keeping things afloat as Europe and the US struggle, has seen its own economy beginning to slow down. With Europe still mired in an effective recession and the US still in only a fledgling recovery, a rapid deceleration in China’s economy may be the tipping point that sends the world back to “The Great Recession” part two. There seems to be a growing euphoria in stock markets. One analyst described the recent gains as “panic buying”, which does not bode well for things to come in stocks. If the usual patterns hold true, when the euphoria ends and the very real and abysmal state of global finances reassert control over the market, we may just see an explosion in precious metals prices the likes of which no one has ever witnessed. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.
Trading Department – Precious Metals International, Ltd.
© 2013, Precious Metals International Ltd.
www.wwpmc.com
The Week in Review – March 16th, 2012
Posted by Worldwide Precious Metals on Friday, March 16, 2012
The Week in Review – March 9th, 2012
March 9, 2012
Greece once again dominated news headlines this week as the deadline for its debt swap deal with private bondholders approached on Thursday.
The data from the Bureau of Labor and Statistics’ February jobs report was mixed on Friday. January’s job creation data was revised upwards and February’s data fell short of the newly revised figure. Unemployment was held steady at 8.3 percent despite the labor participation rate edging marginally higher. Many analysts thought that an increase in the labor participation rate (the number of people actively seeking jobs) would cause an increase in the unemployment rate when previously discouraged workers once again entered the search for jobs. The positive data was tempered by comparisons with last year’s data during the same time period. 2011 started off in similar fashion during January and February but tapered off as the year wore on. Andrew Wilkinson, chief economist strategist at Miller Tabak, said The problem is, however, that there are few signs that the pace of growth is accelerating and while we might be in for a series of decent reports like this, the February data is the bare minimum necessary to help expedite recovery.”
The Wall Street Journal reported on Thursday that the US Federal Reserve may sterilize” further bond purchases, coining the term sterilized QE”. The WSJ outlined the sterilization procedure as meaning that if the Fed decides to buy more bonds, it could borrow back the money it used to buy them for short periods of time at low interest rates. This would effectively take the money out of circulation, thereby sterilizing” it.
In Europe, Greece was the big news item for the week once again. The deadline for the private debt swap deal that is such a key part of Greece receiving their next bailout payment came and went on Thursday with the embroiled country seeing a participation rate in the deal of 83.5 percent which was better than expected. Following a conference call with euro zone finance ministers on Friday, Greece announced that it would be activating the Collective Action Clauses on those bond holders who refused to participate, forcing them into the debt swap. Fitch ratings agency cut Greece’s credit rating to restricted default” on Friday as a result of this week’s events. All three major ratings agencies now classify Greece in default territory”.
According to CoreLogic’s home price index, US home prices fell for the 6th month in a row in January. The real estate market continues to be hampered by a massive amount of distressed properties flooding the market. As foreclosures that had previously been locked up in court battles over the “robo-signing” incident begin to move through the system again, we may still see prices continue to decline.
According to the International Atomic Energy Agency, Iran has stepped up its uranium enrichment efforts. In the latest quarterly report, the IAEA said The agency continues to have serious concerns regarding possible military dimensions to Iran’s nuclear program.”
Crude oil remained in the upper $100 a barrel this week, held there by a less than expected increase in inventories, fears over Iran’s continued hostilities and uncertainty over the success of Greece’s debt swap.
The euro spent much of the week declining against the dollar as the deadline for the Greek debt swap loomed. Once the deadline was reached, the euro reversed course and began climbing against the dollar. The yen was climbing weakly against the dollar most of the week, but reversed course after the Greek deadline was reached.
Friday to Friday Close
| March 2nd | March 9th | Net Change | |
|---|---|---|---|
| Gold | $1709.00 | $1710.00 | 1.00 + 0.06% |
| Silver | $34.50 | $34.20 | (0.30) – 0.87% |
| Platinum | $1690.00 | $1682.00 | (8.00) – 0.47% |
| Palladium | $710.00 | $707.00 | (3.00) – 0.42% |
| Dow Jones | 12977.57 | 12918.50* | (59.07) – 0.46% |
Previous year Comparisons
| March 11th, 2011 | March 9th, 2012 | Net Change | |
|---|---|---|---|
| Gold | $1422.00 | $1710.00 | 288.00 + 20.25% |
| Silver | $35.95 | $34.20 | (1.75) – 4.87% |
| Platinum | $1780.00 | $1682.00 | (98.00) – 5.51% |
| Palladium | $763.00 | $707.00 | (56.00) – 7.34% |
| Dow Jones | 12044.40 | 12918.50* | 874.10 + 7.26% |
* Current at time of writing
Here are your Short Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
|---|---|---|
| Support | 1680/1650/1600 | 33.50/33.00/32.50 |
| Resistance | 1720/1750/1780 | 34.50/35.00/35.75 |
| Platinum | Palladium | |
|---|---|---|
| Support | 1650/1610/1580 | 700/680/660 |
| Resistance | 1700/1740/1780 | 720/750/775 |
Volatility should be expected to continue. Everyone seems to be issuing a sigh of relief over the outcome of Greece’s debt swap this week, but the situation there, and in fact in the Eurozone as a whole, is far, far from over. Late Friday, the
determinations committee”, made up of 15 members from large banks, hedge funds and investment firms, announced that Greece had indeed experienced a Credit Event” as a result of activating the Collective Action Clauses that would force their remaining bondholders to accept the debt swap they proposed. The result is that any Credit Default Swap policies, written essentially as insurance against the possibility of a default, must now be paid out for a total of roughly $3.2 billion. Focus now shifts to Spain, Portugal and Italy as these countries digest the fact that Greece effectively will not have to pay back the full extent of its debts. Many fear that these countries, battling their own forced austerity measures, may take the stance of if they didn’t have to pay back their debts, why should I have to pay mine?” leading to massive contagion among the debt laden nations of the Eurozone. In Iran, a continued hostile stance towards nearly everyone in the region, and a refusal to slow down their nuclear enrichment programs, may likely keep oil prices at their current high levels, if not drive the prices even higher, for the foreseeable future. Sustained high oil prices will likely lead to a sharp cutback in consumer spending, resurrecting fears that the economy may slip back into recession. Following last week’s blatantly obvious manipulation of the precious metals market, King World News interviewed their anonymous source, the London Trader”, and asked his opinion on the events taking place. Their source said When silver took out $33, a huge amount of physical orders were filled. The Chinese are doing the exact same thing in the silver market that they are doing in the gold market; massive accumulation on dips. It is also important to note that the local traders in silver are short and nervous. Everyone is short silver and so that market can move violently higher when it turns.” China’s economy appears to be showing signs of slowing further. Annual consumer inflation in China slowed to a 20 month low and factory output growth was at levels not seen since 2009, all of which may point to additional monetary easing by the Peoples Bank of China. Once again, we go into a weekend facing an announcement out of Europe that took place late on a Friday that may affect markets at the open in Asia Sunday night. Now more than ever it is important for you to pay attention to the news and analyze the fundamentals that are driving the precious metals market today. If analysts are correct in their assumptions, we may be nearing the point when the sheer demand for physical product outstrips the big bullion banks’ abilities to manipulate the market. When that occurs, we may see prices explode to the upside in a spectacular and violent fashion. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.
Trading Department – Precious Metals International, Ltd.
© 2013, Precious Metals International Ltd.
www.wwpmc.com
The Week in Review – March 9th, 2012
Posted by Worldwide Precious Metals on Friday, March 9, 2012
The Week in Review – March 2nd, 2012
March 2, 2012
What a week! It was a phenomenal week in precious metals right up until Wednesday when it looked poised to explode. As Federal Reserve Chairman Ben Bernanke was addressing the US Congress on Wednesday morning, a single, “not for profit” seller reportedly came in and sold a massive amount of gold in a single trade. It looks like “Da Boyz” are getting desperate.
The initial jobless claims data looked like a street corner numbers game this week. The figure was reported as “edging slightly lower” by 2000 jobs. Since last week’s figures were revised upward by the same 2000 jobs, that means essentially there was a net change of exactly 0. February’s official employment report is not due out until March 9, delayed as a result of the extra day this Leap Year.
US manufacturing growth dropped in February according to the Institute for Supply Management’s index of national factory activity, ramping up fears that the recovery still has some severe headwinds to get through. The Commerce Department reported that consumer spending rose only by 0.2 percent in January, perhaps due to rising fuel prices and, surprisingly, increasing rent costs. Fears that inflation may be higher than the government is actually reporting may be driving consumers to cut back on spending once again.
In Europe, the same banks that took advantage of the latest LTRO from the European Central Bank to borrow massive amounts of cheap euros, turned around and deposited much of the money they borrowed right back with the ECB. The move shows just how distrustful the European banks are of each other since they will only receive 0.25 percent on that money, compared to close to 1% they could receive by lending it out for 3 months.
According to RealtyTrac, 24 percent of all home sales in the 4th quarter of 2011 were distressed. According to CoreLogic, 22.8 percent of all residential properties with a mortgage were in “negative equity” where more is owed on the mortgage than the property is worth and another 2.5 million borrowers have less than 5 percent equity. All of this adds up to a potentially abysmal spring in the real estate market as none of these “negative equity” homeowners will be able to sell their home and “move up” to larger homes.
Crude oil continues to stay in the mid-$100 a barrel range. An unconfirmed Iranian report on Thursday that a pipeline in Saudi Arabia had exploded sent prices soaring before the Saudi government refuted the report, showing just how fast the tension over events in the Middle East can drive prices higher.
The euro managed to climb higher for much of the week against the dollar basically on news that Greek had not triggered Credit Default Swap payments… yet. The end of the week saw the euro reverse course against the dollar however as news broke that Spain would lower its deficit target beyond that originally agreed to. The yen continued its slide downward against the dollar, diving sharply lower at the end of the week.
Friday to Friday Close
| February 24th | March 2nd | Net Change | |
|---|---|---|---|
| Gold | $1776.00 | $1709.00 | (67.00) – 3.77% |
| Silver | $35.35 | $34.50 | (0.85) – 2.40% |
| Platinum | $1715.00 | $1690.00 | (25.00) – 1.46% |
| Palladium | $710.00 | $710.00 | 0.00 + 0.00% |
| Dow Jones | 12982.95 | 12976.06* | (6.89) – 0.05% |
Month End to Month End Close
| January 31st | February 29th | Net Change | |
|---|---|---|---|
| Gold | $1737.00 | $1710.00 | (27.00) – 1.55% |
| Silver | $33.25 | $34.55 | 1.30 + 3.91% |
| Platinum | $1600.00 | $1690.00 | 90.00 + 5.63% |
| Palladium | $686.00 | $705.00 | 19.00 + 2.77% |
| Dow Jones | 12632.91 | 12952.07 | 319.16 + 2.53% |
Previous year Comparisons
| March 3rd, 2011 | March 2nd, 2012 | Net Change | |
|---|---|---|---|
| Gold | $1416.00 | $1709.00 | 293.00 + 20.69% |
| Silver | $34.33 | $34.50 | 0.17 + 0.50% |
| Platinum | $1830.00 | $1690.00 | (140.00) – 7.65% |
| Palladium | $812.00 | $710.00 | (102.00) – 12.56% |
| Dow Jones | 12258.20 | 12976.06* | 717.86 + 5.86% |
* Current at time of writing
Here are your Short Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
|---|---|---|
| Support | 1705/1690/1650 | 34.30/33.80/33.50 |
| Resistance | 1725/1750/1790 | 35.50/36.00/37.00 |
| Platinum | Palladium | |
|---|---|---|
| Support | 1675/1650/1620 | 700/660/640 |
| Resistance | 1720/1750/1800 | 725/750/780 |
Volatility should be expected to continue. Despite the blatant attempt on Wednesday to force massive panic selling in gold and silver, the metals appear to have weathered the storm. The media tried to spin Wednesday’s manipulation as being the result of what Ben Bernanke “did not say” regarding more quantitative easing while he was in front of the US Congress. The media was quick to jump on the “gold bubble has finally popped” bandwagon, but the cracks are starting to show in that tired, old façade. Industry analysts and gold fund managers are all publicly acknowledging that a single, “not for profit”, seller came into the market as Bernanke was speaking and unloaded an unusually large amount of gold in a single trade designed to deliberately smash down the price. The sheer stupidity of such a move, coming as gold was spiking higher for the day, screams “MANIPULATION!” Once the initial panic wore off, savvy investors, led by China as usual, recognized an opportunity to buy and prices began to stabilize again as they scooped up the bargains. The fundamentals supporting higher precious metals prices remain strong. The ECB printing presses are still running at full tilt, and the banks that are borrowing their cheap money are apparently not even lending it out to each other. They chose instead to park it right back with the ECB at a ridiculously low rate rather than lend the money out themselves. Discrepancies are cropping up in the US jobs numbers which have been paraded as a sign that the US economy is improving. To paraphrase Mr. Bernanke’s statements on Wednesday, statistically the US economy has not been growing at a fast enough rate to lend support to the current “official” unemployment data. In the Middle East, tensions remain high between Iran and just about every other country in the region. Iran reported on Thursday that an explosion had occurred at a Saudi Arabian oil pipeline. The Saudi regime was quick to refute that report, but the immediate spike in oil prices that occurred on the headline shows just how trading on headlines and emotion can massively increase the volatility in these uncertain times. In Europe, 25 EU states signed a pact that will supposedly help “prevent a repetition of the sovereign debt crisis”, according to Herman Van Rompuy, President of the European Council. The political ploys have already begun among the countries that signed the pact on how to modify it so that it is less strict, and the UK and Czech Republic refused to sign altogether. In Spain, Prime Minister Mariano Rajoy lowered Spain’s target deficit for 2012 below what was agreed to under the EU’s push for austerity. Thomas Klau, head of the European Council on Foreign Relations, said “It’s the first step for undermining the credibility of a system which has not even had time to accumulate any credibility capital” apparently in reference to the recently signed pact. Mr. Rajoy said, when asked whether he had discussed the announcement with other European Leaders, “I’m not going to tell the other presidents or heads of state about the deficit figure that will be included in our budget. I don’t have to. It’s a sovereign decision. I’ll tell the [European] Commission in April.” Expect the extreme volatility to continue as the world global financial system continues to flounder amid politics as usual. Look for buying opportunities, such as the one presented on Wednesday, to take advantage of what may be seen as extremely cheap prices for precious metals if analysts’ projections for this year are accurate. Remember that precious metals should be viewed as a long-term investment and that the key to profitability through the ownership of physical precious metals is to actually own the physical products and to hold them for the long term. Never overextend your ability to maintain ownership of your precious metals over the long term.
Trading Department – Precious Metals International, Ltd.
© 2013, Precious Metals International Ltd.
www.wwpmc.com
The Week in Review – March 2nd, 2012
Posted by Worldwide Precious Metals on Friday, March 2, 2012
Subscribe to receive timely
information on
precious metals.
a
Fill Prices may vary based on actual time orders are placed and confirmed. All orders are Final and Subject to Terms and Conditions of the Customer's Account Agreement with Precious Metals International, Ltd. All Fabricated Products for Home Delivery are quoted, basis specific product, quantity and delivery destination at Time Orders are placed and confirmed. Retail Dealer Prices may vary.