Platinum leading the charge in precious metals

Precious metals in New York were higher across the board, with platinum leading the charge…higher by another $19 an ounce in the April contract at 1,715 – right near contract highs continuing its bullish momentum on the fact of possible disruptions in supply that could happen this year. That is also pushing palladium prices to new yearly highs once again, up $14 at 772…continuing its bullish momentum on the fact that automobile industry is doing extremely well – which is propping up demand for these products.

As I’ve stated in many previous blogs, I do believe that platinum and palladium are headed sharply higher from these levels.

Gold futures were very quiet, basically unchanged for the trading session at 1,649 an ounce…and is still trading in a sideways to lower pattern with really no trend in sight. That is pushing silver prices slightly higher today, by $.08 at 30.98 in a lackluster trade in New York. Silver is still stuck in a sideways channel at this point, and I’m still advising traders to be long this entire complex because I do believe silver will join the party in the next couple of weeks – especially if platinum and palladium continue to make new highs.

Copper futures for the March contract closed up about 200 points at 3.7450, still right at the upper end of the range on the fact that the housing market is improving. Also with the S&P 500 hitting a new 5-year high again today, which is pushing up optimism that demand for copper will increase in the coming months.

TREND: MIXED
CHART STRUCTURE: EXCELLENT

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Metals Futures for 2013

(futuresknowledge.com) – Copper, gold, palladium, aluminum and silver futures give metal traders an alternative to physically buying and storing the metal. Metal Futures, especially gold, are popular securities among speculators. Whether it is a hedge against inflation, or a speculative play, the precious metals futures can be inviting to invest your money. The precious metals futures market is a place to hedge and speculate.

The US Unemployment increased by 155,000 workers which was in line with expectations. The US Unemployment rate came in at 7.8 % as expected. It is thought that about 12.2 million US citizens could not find work. Underemployed individuals that may be part-time seeking full-time or job hunters may be about 14.4 %. Many will simply not show up in the surveys! The employment in the construction sector increased by 30,000 jobs. Health care jobs increased by 45,000. Federal jobs were decreased by 3,000. Local government jobs decreased by 14,000. The average earnings increased by 7 cents to $23.73 per hour. The average work week came in at 34.5 hours.

The US Institute for Supply Management Index for Non-Manufacturing business increased to 56.1 in December while the previous reading was 54.7. Of course, any number over 50 points to expansion. The new orders portion of the report increased to 59.3 from 58.1. The business activity portion decreased to 60.3 from 61.2 in the previous reading. The employment index portion increased to 56.3 while the previous reading was 50.3.

US Factory Orders increased $211 million to $477.65 billion. The automobile orders increased by 2.8 % while the civilian aircraft orders decreased 13.8 %. Excluding defense, factory orders increased 0.1 %.

Thursday, the US Initial Jobless Claims is forecast at 362,000 while the previous reading was 372,000. US Wholesale Trade is forecast at 0.3 % while the previous reading was at 0.6 %. Friday, the US International Trade is forecast at -$41.1 billion while the previous reading was -$42.2 billion( Carepage Profile ) . The US Import Prices is forecast at 0.1 % while the previous reading was -0.9 %. The US Export Prices is forecast at -0.1 % while the previous reading was -0.7 %. US Treasury Budget is forecast at – $20.0 billion for December while the previous reading was – $172.1 billion.

The Japanese investors may double their Gold pension investment to 100 billion yen by 2015 to counter a higher inflation target. India, on the other hand is seeking further import deductions to weaken Gold imports. Gold is an emotional market that needs confidence to move it. Once some heavy buying from Asia comes in, the speculators may join in. Analysts have targets for Gold between $1700 and $2000 typically. 2013 may be a year of moderate inflation and recovery. The stock market may not have stellar earnings coming in. The Gold may yet have its day!

The hard support now remains at $1627.90! If the Gold can breach $1693.10, it may get some traction to head to higher ground. There is still a concern that if $1627.90 is violated that $1538.70 may be a downside target.

 

Metals Commentary on Jan 13th

Precious metals have slowly inched back higher trending above support lines in both Gold and Silver as the Euro fights back against the USD today with the Euro trading at a $1.32 handle today.  Today the Gold market is lower by about $5 here to $1,382 but above the $1,370 level as there was a lot of consolidation going on for the last two weeks now after that huge fall from $1,420.  Silver futures for March delivery fell 16 cents, or 0.5 percent, to $29.385 an ounce in New York. A decline today would be the first loss in four sessions. Palladium futures for March delivery added 1.1 percent to $815.40 an ounce in New York, and earlier touched $819.50, the highest price for a most active contract since March 2001. Platinum for April delivery gained 0.4 percent at $1,809.10 an ounce. (1) There hasn’t been a whole lot of buzz after the talk of Gold supposedly liquidating even further after that $50 drop but the bulls have came in to support the market at $1,365 and have taken some pressure from the downside for now.  I look to play the long side when Gold gets back down here and even if the next support level gets reached at $1,320 as I think a dip in the gold market is just another buying opportunity to go long as prices will likely head higher this year.

– Daniel Cronin, Metals Guru

Metals Review – January 03, 2011

Precious metals continued to rally last week and will likely do the same this week as Gold traded up to $1,420 as investors gobbled up the yellow metal in front of the big resistance number at $1,430.  Gold has been making W shaped patterns in this market now and will likely continue to head higher as prices have hugged the 50 day moving average at $1,375 only to bounce off and trade higher.  I think Gold will test $1,430 this week and eventually break the mold.  Silver also trading higher and I believe this metal can break the $30.70 resistance area this market has seen at this level thus far.

Copper had an unbelievable breakout above the $4.30 mark to trade up to $4.45 Friday and it feels like there is no stopping this market.  It has now broken above 2007-2008 highs and looks like it is going to continue to move higher.  I will look for a period of profit taking to try to get in on this market and to not chase.  Somewhere around $4.35 to $4.30 would be a good entry level to me, if this can be attained.

Resource: Pitguru Weekly Review

The Bullion Report: Metals as Money

It has been about a month now since the World Bank chief found a way to work gold into his comments for the Financial Times. His words, no matter how they were originally directed, added to the revival of mainstream discussions over the gold standard. Central banks are likely nowhere near that kind of conclusion, but the strong feelings some people have towards precious metals as currency are likely not taking a back seat any time soon. What is it about gold and silver that beckons such debate in the first place?


Past performance is not indicative of future results.
***chart courtesy Gecko Softwareís Track ní Trade Pro


Past performance is not indicative of future results.
***chart courtesy Gecko Softwareís Track ní Trade Pro

The first answer to that question is usually the idea that gold and silver occur in such rarity that there will always be an intrinsic demand for that which is harder to come by. This is the supply and demand argument at its root. Supply includes the visible and quantifiable amount of precious metals that is held by investors and banks. It also includes identifiable jewelry and industrial applications. The potential underground resources in areas where metals are mined are also observed as part of the overall estimated supply. These “yet-to-be-mined” metals present a bit of a challenge. After all, there are significant input costs related to mining, but the general picture of potential metals for investment and manufacture include these estimated values as well. If demand keeps ratcheting up over time, this finite value of precious metals has to be spread among more participants. This would essentially lead to a higher price if the number of buyers outpaces the number of sellers.

On that demand side, the answer to using metals as money can be a little more esoteric. To the critic, gold has limited desirability. Some infamous investors have even gone on record making statements that point out higher values to be found in farmland or oil. They suggest that gold and silver are just metal. They have no function beyond that which imagination imbues in them. However, therein lies the answer. Apparently, there remains a strong drive to possess gold and silver. Gold may not represent a food value or potential energy source. The fans of bullion point out things that are possible with gold – and even silver to certain extent – that are not found in other financial instruments.

Gold does not easily tarnish or rot away. It doesn’t change with the seasons or get consumed while performing its function. Precious metals have history. They have been used as a store of wealth for millennia. There is an inherent difficulty in manipulating or devaluing precious metals, unlike currencies. To the fan of a gold or bimetal standard, it appears easier for a central bank to change policies in the short-term to print more money. Making more gold or silver would more often involve an investment in mining or a gold discovery the scope of which might need to match the Comstock Lode or other significant ore deposit. Again, critics of gold may suggest that the instability created by central bank sales shows an inherent weakness in gold values. However, the likelihood of sales of such magnitude from banks might be eroded by the requirement to back paper currencies with actual, physical gold.

Gold and silver were used as exchange mediums for centuries. They held places of esteem in many civilizations. Gold and silver coins and jewelry are easy to mold into convenient sizes to transport. When agreed upon values exist, precious metals represent something familiar to most modern societies.  Unlike other financial vehicles, there are very few inherent weaknesses to precious metals like there are for a nation’s currency. They do not rely on performance figures or economic policies. They are just physical gold or silver. Even though attempts have been made historically to alloy or plate coins to pass them off as bullion for illicit gain, it is harder than it sounds to manipulate an investment that way. On the other hand, even rogue comments by central bank members can have significant impact – even temporarily – on overall markets.

Summary

It is likely impossible to divorce the world economy from the current monetary system. There are several schools of thought that argue against precious metals being used in any format that suggests anything other than dabbling in investment or industrial enterprise. These arguments are not likely to silence the call for reform any time soon. The real issue at hand appears to be the possibility of inflation stemming from the central bank and policy changes. Consumers are growing increasingly alert and aware of the potential for manipulation and the overall global impact. Gold and silver coins are hard to counterfeit. Crooked bullion or sales policies are more difficult to sweep under the rug. The impact of a dilution of a gold coin by alloying it with another metal is immediate. The shift in monetary policy or an accrual of debt by a nation may have an effect that many modern investors believe can ripple on for years. The trick to a “return to gold” would lie in a re-education that might be a harder undertaking than people imagine. Unless there is a complete collapse of a specific international trade, precious metals will probably remain an alternative to paper money, instead of a backing for it.

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Gold and iron are good
To buy iron and gold.

RALPH WALDO EMERSON, Politics

What are Metal ETFs?

An ETF (Exchange Traded Fund) is an investment vehicle that is traded much like a regular stock but is considered a mutual fund. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. An ETF combines the valuation feature of a mutual fund or unit investment trust, which can be purchased or redeemed at the end of each trading day for its net asset value, with the tradability feature of a closed-end fund, which trades throughout the trading day at prices that may be substantially more or less than its net asset value. Closed-end funds are not considered to be exchange-traded funds, even though they are funds and are traded on an exchange. ETFs have been available in the US since 1993 and in Europe since 1999. These ETFs are usually comprised of a specific sector or industry, such as gold or silver.There is an ETF called Spider Gold Shares (GLD) that tracks the daily price of the commodity. There all sorts of different ETFs that you can use. Silver has one with I Shares Silver Trust (SLV), oil has United States Oil (USO), and Platinum (PGM) just to name a few. These ETFs have also likely been used by investors trying to hedge. Some ETFs, however, have been said to manipulate the heavy selling pressure seen in the market over the last year. Many investors have been trading “short” ETFs usually at the end of the trading day to drive the market down. Trading in futures and options involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.