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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
www.preciousmetalstockreview.com
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