Jump to content
Sign in to follow this  

Smart Money - Precious Metals

Recommended Posts

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. 

Share this post


Link to post

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. 

Share this post


Link to post

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!

  • Like 1

Share this post


Link to post

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. 

Share this post


Link to post

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.

Share this post


Link to post

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. 

 

Share this post


Link to post

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. 

Share this post


Link to post

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. 

Share this post


Link to post

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.

Share this post


Link to post

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

Share this post


Link to post

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • IG ISA Season

  • Member Statistics

    • Total Topics
      6,421
    • Total Posts
      28,556
    • Total Members
      37,555
    Newest Member
    MaxwellIG
    Joined 25/03/19 21:20
  • Our picks

    • APAC brief 26 Mar
      Markets trade-off Friday overhang: Markets traded in something of a vacuum Monday. The themes driving price action were more-or-less those that had determined activity to end last week. The effects of this were pronounced in the Asian session, but much less so in Europe and North America. It stands to reason: Asian markets were still to digest Friday night’s abysmal European PMI figures. That data’s impact is still rippling through the market. Anxieties about global growth and the likelihood for a global recession is the topic of the day. But the material losses stemming from these concerns, though broad-based, have been limited overnight. Wall Street is down but bouncing; European stocks were down; while futures contracts for Asian markets are mixed.

      Risk-off generally prevails: Fear is demonstrably higher. On balance, safety was generally sought on Monday. In something of a bittersweet development, the VIX has pulled of its lows, to trade above 16, as traders reprice volatility and risk. In the broader G10 currency complex, the Yen has been led the pack, though its rally has steadied, and it is currently shuffling around the 110-handle. Investment grade credit spreads have widened notably, as speculation about slower growth has fanned-fear regarding the massive US corporate debt burden. And finally, the overnight-drop in the US Dollar, combined with the ubiquitous disappearance of safe-yielding assets the world-over, has pushed gold prices to $US1322 per ounce.
      • 0 replies
×
×