Precious Metals on the Move!
As we all know, precious metals have been on a roll. With gold and silver moving like nobodies business, I’m going to take a few moments to discuss reasons why they’re moving so quickly.
Interestingly in the recent rally, the miner stocks have been the big winners. Recently, we saw that miners were hurting from a lack of capital, the credit crunch had limited the ability of miners to fund the day to day operations. As such, miners were lagging well behind the metals, mostly due to the fact that with lower metal prices, the risk to lenders was greater.
Inflation trade is persistent
The rise in prices also show the inflation trade is still abound. Investors, who have become increasingly concerned with inflation, especially as monetary inflation continues as the economy shows signs of “green shoots.”
5% on Gold, 10% on Silver
The changes in gold and silver are incredible, especially for metals that are better known as inflation plays and not super speculative investments. I think the best quote I heard on this subject was from CNBC, in which they alleged “Generally a movement like this means someone knows something!” Now, the timing is interesting, because the employment report is poised to come out tomorrow. But we also must consider that the move follows a large jump in equities with little move from metals. Following the multiplier effect, it should only be normal that you might see something like this.
Levels to Break
Ultimately silver must break $16.30 and gold $1000 before the metals can move further. Unfortunately for the bulls, these levels will be extremely tough to break. Metals, unlike equities, typically touch many many times before a break out. This is usually due to the fact that many companies are hedging their bets, and trying to find both the highest and most consistent price they can for their metals. Though there is plenty of speculative interest, there is also lots of commercial interest which further adds to the strength of the lines.
Commodities are where you want to be in the case of inflation. While silver and gold are great to have in the portfolio. Nat gas might be even better because of the upside potential. Read more at
http://joeshareholder.blogspot.com/2009/09/okay-its-about-time-we-got-to-fun-stuff.html
I’ve read some stuff about nat gas dropping below $1, but I don’t see producers producing at such levels.
Don’t get me wrong, I like gold and silver, and believe they’ll cross the $16 and $1000 marks, but the potential is in nat gas.
You do make some good points Jordan, I agree with you that there is more potential in natural gas as an inflation hedge than gold,oil, or silver for now. Refinery demand for oil is likely to fall this month, and outlooks for some short-term dollar strength are strong, it is a warning sign with 95-97% of traders being bearish on the dollar. This extreme bearish sentiment on the dollar combined with other fundamentals, individuals should hold on buying oil now. Also, I would be aware of the divergence or recent short term inversion of the dollar and gold correlations, that I have seen is usually a warning sign against gold at least having a little pullback from here. Note the technicals on the medium term gold chart too, a nicely forming pattern, soo for gold I would wait on the sidelines until it breaks either way. In conclusion nat. gas is over-extended to the downside, approaching a strong support, and the fundamentals for it moving forward are upward.
in turn near term oil is likely to have more of a pullback than natu
I couldn’t have put this better myself. Inflation is definitely a major cause. The value of gold and silver is constantly on the up, and it is advised that every serious investor adds gold to their portfolio if they haven’t already.
Unfortunately our economy thrives on debt and the only way to break free from its hold is to spend sensibly and save more.
I couldn’t have put this better myself. Inflation is definitely a major cause. The value of gold and silver is constantly on the up, and it is advised that every serious investor adds gold to their portfolio if they haven’t already.
Unfortunately our economy thrives on debt and the only way to break free from its hold is to spend sensibly and save more.
I call into question nat gas and do the rate on physical gold. Read more buying gold at http://goldvender.com/