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Smart Money - Precious Metals

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Looking at the trends for Precious Metals right now with the Hurricane and North Korea missile launched then it seems the smart money is going into Precious Metals. Gold, Silver, Platinum and Palladium are performing as one would expect. There may be a short term play here where profits can be made. 

 

What will be interesting is how Bitcoin performs now with the news that North Korea launched missile. Last time around it shot up. Lets see what happens. There is a nice trend on Copper too! The doctor is performing. 

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I am replying to my own post as Gold and Silver have declined slightly from yesterday's high. I think looking at historical price action and when the facts are presented it demonstrates that Cryptocurrencies are behaving like safe havens more than Gold. The 'big boys' don't want to put big money into something that the Governments can control or manipulate. 

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Palladium has been outperforming all the other precious metals by quite a distance. Yes the margin requirements are higher but the performance has been higher too! The spread is not actually that bad either on it.

As I have stated in many occasions a long term upward trend can last a lot longer than one expects. Palladium has a unique benefit in that it is a precious metal that can go up during time of crisis but also it has important industrial uses which means when economies are doing well, their stock markets are doing well in the shape of equities / indices then  Palladium can too perform well. 

Platinum has been the weakest and Gold and Silver seeming to be at the beginning of their journey to possibly join Palladium but I do not think Palladium is about to give up its crown as 'Top Dog' anytime soon. 

From an investment portfolio perspective, I would want to start considering shifting a small allocation from equities into Precious Metals and Bonds and think about rebalancing based on Brexit consequences, recessions in certain EU Member States such as France and Germany and the US!

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It seems that Gold, Silver and Platinum followed similar price behaviour yesterday.

Was it because of the US Government re-opening albeit temporarily? We would certainly like to think so and convince ourselves that every significant price action is based on some form of news which we can relate to the price action. There will be many times when this is the case. However, there are times when positions are being built and prices are moving without any specific news that has been released by the media. 

Previous metals are a very interesting asset class within the Commodities asset class and within the metals asset class. They have industrial uses but are historically known to be used as a hedge against uncertainty in the economies around the world. Interest rates and inflation can play a key part in the portfolio allocation of precious metals and the likes of bonds.

There is also another factor which affects the prices of precious metals. That is demand and supply. How much demand is there and are there any supply issues and these can cause sharp moves either upwards or downwards in precious metals. Mining strikes, wars, serious supply issues when there is large demand, etc.

There could be a rally in precious metals which lasts a year or two and what we are seeing since August 2018 is merely the beginning. One must remember that trends can last a lot longer than one thinks. 

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A bullish narrative is presenting itself for Precious Metals.

I think we have witnessed large institutions beginning to reposition their portfolios by increasing their allocations towards Precious Metals.

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At the moment Silver's chart is more similar to Platinum's than Gold's. 

Gold's chart is more similar to Palladium's than Silver's though Palladium has totally outperformed Gold over the last 12 months. 

 

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Palladium is performing strongly on the upside and has been since August and September 2018. August 2018 was also when the Gold upward journey began. 

It is all about identifying these breakouts and assessing how strong these trends are by monitoring the price action. 

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Palladium is still showing signs of strength in its upward trend.

All four 20, 50, 100 and 200 DMA curves are sloping nice upwards which to me personally is a bullish sign. I include the chart below to illustrate this point.

2010929310_SpotPalladium_20190311_20_44.png.8bb65e3d40a7cd51b88a0496b442e573.png

Now what could happen next is possibly a continuation of the uptrend or a very sharp drop which is very common in Commodities. This asset class tends to attract a lot of speculative trades hence why trends tend to last a lot longer upwards and come crashing down quickly and sharply for fantastic shorting opportunities. 

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With Brexit uncertainty one could predict a good day for Precious Metals today based on conventional wisdom. Now the market knows this so I will be rather interested in seeing how they perform today. 

All four Precious Metals are up this morning around 5:00 am. It will be interesting to see how they finish tonight. Do they follow historical theory or do the opposite.

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Precious Metals are performing as expected and the time is 7:17 pm at the time of this post.

Gold up nearly 9 points at the time of writing

Silver up nearly 16 points at the time of writing

Platinum up over 17 points at the time of writing

Palladium up nearly 2 points at the time of writing

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Platinum could be readying itself for a breakout and its chart certainly looks more bullish than Palladium, Gold and Silver. 

786730465_SpotPlatinum_20190506_16_53.png.c3054d9c4be83c1c0d20a7f7a334669a.png

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Just have a look at Palladium's chart on the 'daily'.

1750116320_SpotPalladium_20191028_16_45.png.975222d3bc6b93f4b75a2c71511c74f4.png

Now look at the curves for the 20, 50, 100 and 200 DMA's all sloping upwards nicely on the 'daily'. This an extremely bullish trend and one of the 'strongest trending assets' at the moment. 

466175335_SpotPalladium_20191028_16_46.png.a6f293f76e96bf775ba0e74ef9eaeb23.png

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The RSI is showing Palladium to be below 70 on the 'daily'. This means it is not currently at overbought levels. That provides an opportunity for more upside though I am very weary of the trend reversal due to profit taking, short covering, stop losses being triggered thus an amplified downward move. 

205321741_SpotPalladium_20191124_09_10.thumb.png.138bd3963f2cd17997538d813111724c.png

 

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@Patbuffet1,

Palladium has been a buy for the past couple of years. Is it s a buy or not now then it could be if you believe 'precious metals' are going to go up with the 'safe haven' narrative as things are going to get ugly from an economics perspective around the major economies in the world. If you believe that stock market will continue their upward trajectory and then there may be a sharp correction coming for the likes of Palladium in which case there may be a potential shorting opportunity. After that may provide a better trade to go 'long'. 

Short term you could merely trade in the direction of the trend which would be 'long' but different trading strategies will trade Palladium differently.

The best thing you can do if you are interested in Palladium is use the internet (credible sources) and look to learn as much as you can about the asset. Then conduct some research on the 'Demand and Supply' fundamentals and try and compare them to the charts and technicals. That would be an excellent starting point in my opinion before you even start trading Palladium. 

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Precious Metals are performing well today along with Bonds with the US-China narrative as the backdrop. 

Palladium is continuing its upward trajectory. The 'Awesome Oscillator' is supporting the price action we are witnessing in this asset. It is demonstrating strong momentum in the time period of the trend which has lasted quite a while now. In fact well over a year and approaching a year and a half. 

1631490585_SpotPalladium_20191203_19_45.thumb.png.e0c538c53199e9593726a437fbd9f0fa.png

 

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