Precious Metals are Hoping!

April 3, 2010

Just in time for the eater bunny, gold, silver platinum and palladium all hoped up out of their bullish technical formations. Finally, it appears that they are on the move with gold likely on it's way to new all-time highs in the next while and silver into bull to date highs in the same timeframe.

Platinum and palladium should continue their steady marches higher, but are still a ways away from their 2008 highs.

Metals Review

Gold rose 1.78% for the week. It's funny how gold went lower so quickly before options expiry March 26, and has now moved higher with the same degree of speed. If I didn't know any better, I'd say this market was rigged!

Gold did break out of the large, beautiful wedge formation. That is what I like to see. A big long base and now a breakout. That will give gold a tonne of power for this next move up. Think of the base as refilling the tank, the more time/gas is put in the farther it can run.

RSI is in fine form. The moving averages are good, but I'd like to see the 50 move back above the 100 day, but for now it's fine. Horizontal resistance lines are drawn in but shouldn't be too much of an issue with a strong breakout like this. Not that gold will go straight up, it will go up over the next few months.

MACD is now bullish, as is the Slow STO which is mid-range. The only thing that concerns me is that the GLD ETF experienced mediocre volume on the recent breakout. Time will tell, but I think we are on the way up just like Ontario, Canada's temperatures.

Silver rose 6.03% for the week and also broke out of the powerful wedge formation. Silver looks fantastic technically, but you can never be sure with this volatile metal.

RSI is in fantastic form right now. The moving averages are looking good, except the 50 day is still heading slightly lower and below the 100 day moving average. Horizontal resistance lines are drawn in and really, there isn't a whole lot of anything from here until the $18.90 area in terms of clutter.

MACD just shot a buy signal and the Slow STO is also bullish but quite high. The SLV silver ETF broke out strongly late last week and on good volume as well so the chances of moving higher still are excellent from here.

Platinum rose 4.62% in a huge move higher this past week. The only thing stopping Platinum now is the upper reaches of it's uptrend channel and that may not matter if gold and silver continue moving higher here and now.

Slow STO is looking great although it turned flat late in the week. The moving averages are still in perfect shape. Both horizontal resistance levels were bested.

MACD is bullish now and the Slow STO indicator remains bullish but is now well into the overbought area. Anything can happen from here, but higher prices are the most likely scenario. Although, the platinum ETF PPLT did not see huge volume on the late week breakout. That is slightly troubling.

Palladium flew 7.66% for the week, did I mention it FLEW! Palladium has been acting so strongly for a long time now and remains one of the best performing investments on the planet.

RSI is in great shape and still not overbought at all. The uptrend channel is holding for now, but we could see palladium bust up and out of it as it seems it's the precious metal's time to shine once again.

The moving averages are in great shape still. MACD just shot us a buy signal. Slow STO is in overbought territory but still very bullish. The Platinum ETF PALL broke out like mad! Volume was mediocre though.

Fundamental Review

States throughout the US are hurting more and more and some such as Hawaii, North Carolina, Alabama and New York are delaying sending refunds. Minnesota did so last year, and may have to again this year. They simply don't have the cash.

Last year Missouri did the same, but laws were subsequently passed which will stop it from happening again.

Illinois just had their credit rating downgraded to A minus. Generous.

One of the big bankers said recently that California is a greater risk to their company than Greece. California is once again close to issuing IOU's as they did last year.

There were no failed banks aka. biggest losers this past week. Hey, FDIC employees deserve a break too. Funny thing how banks seem to fail when it's convenient.

Singapore's state owned company is investing $100 million in a South African Platinum junior. It's just further dollar dumping by cash rich central banks. They are looking for further investments in resources as well. Remember, Jim Rogers now resides in Singapore and is a major commodities bull.

The case of workers from a major miner being charged in China with spying ended up seeing them jailed for ten years. No doubt it could be called harsh, but it does set an example. I much rather see a harsh sentence or two, to deter these activities, than see the perpetrators rewarded as would happen elsewhere.

The WGC (World Gold Council) says that China's demand for bullion is set to double in ten years. I think that estimate falls in line with their generally cautious approach. It could well happen in five years or less.

The WGC is teaming up with a Chinese bank to develop new gold investment products and programs.

The group also states that at current rates of production China would run out of gold in six years. However more gold will be found in the meantime, but the fact is that gold is a finite material which is only getting harder to find, and found in lower grades. Higher prices are needed if gold is to continue to be mined.

Ghana's gold production rose 12% in 2009. They produced 2.9 million ounces of gold compared to 2.6 million ounces in 2008.

Mergers acquisitions and spin-off's are picking up these days. I've recently been lucky enough to be a part of a spin-off where value was created immediately, something that can be elusive. I'm also involved in a hostile take-over bid right now. There are some other battles going on in the sector and it will only heat up as prices increased.

Argentina is considering changing the provincial ban on open pit mining to allow it in certain areas. That would be good news for many companies, especially in the years ahead.

The UK's Royal Mint saw Q1 gold output fall 50%. Demand for gold has simply slipped as investors have become more complacent.

I can attest to the low demand. Investors have been steering away from the metals. Interest in abysmal. That's why we've begun adding momentum plays to subscriber updates. May as well take advantage of this strong market, while adding to metals positions with the profits.

After last years mysterious case of disappearing bullion the Royal Canadian MInt says golds and silver sales have exploded, to surpass $1 billion. Revenue increased 266%. These numbers are for 2008, with 2009's numbers being released shortly so it's certainly no looks at current trends.

The Bank of France sold 56 tonnes of gold in 2009. As of the end of 2009 the country held 2,435 tonnes.

Recently I mentioned that Gordon Brown was being made to release information on the infamous Brown's Bottom, where the BOE sold gold at the absolute bottom of the gold market. Here is some further information on the information released to date. Good stuff.

Here is Matt Taibbi's latest article titled "Looting Main Street". Enjoy, and watch out of some adult language.

There has been a very strange run of events recently that has hopefully come to an end.

First, last week during the CFTC hearing, GATA's Bill Murphy's testimony was abruptly cut as he began to speak. There were no issues throughout the whole day's hearing until the moment he began. I am told that it was only a windows media player issue, and to be frank, I was using realplayer to listen and had no issues whatsoever. I dismissed that conspiracy call.

Then the London trader, Andrew Maguire, who has first hand knowledge of the silver manipulation taking place was hit by a car shortly after going public with this information. He and his wife were briefly hospitalized and then released while helicopters had to be called in to follow and eventually capture the hit and run driver. This piqued my ears slightly, but if he were to be assassinated surely they could have tried harder, perhaps it was a warning, but I dismissed this as well.

Then, after having some GATA members on a radio interview talking about this major story which is still not being picked up by the mass media, Eric King's site was attacked ferociously and taken down for several hours. Also Trace Myers's site was attacked after a report on this breaking story.

If I didn't know any better, I'd put those pieces together and conclude someone was trying to silence this story....wink, wink!

Finishing off this week I give you this hilarious sketch from SNL which is truer than I'd like.

Until next week, may the sun shine on you and the week see gold and it's friends shine as well.

Warren Bevan is a renowned trader who’s honed his craft over the years learning the styles and techniques of Jesse Livermore, William O’Neil and Dan Zanger and forming his own unique style. He focuses on making money and going hard when the right markets present themselves and during the rest of the time focuses on capital preservation.  He focuses on the leading fast moving stocks during the good times.  He is a proud Canadian, traveler, explorer, and consummate market geek who tells it as he sees it. Warren’s website is www.wizzentrading.com and his email address is warren@wizzentrading.com

Gold is used in following industries: Jewelry, Financial, Electronics, Computers, Dentistry, Medicine, Awards, Aerospace and Glassmaking.