Metals With McGuirk: The Outperforming Metals
Gold did remarkably well last week...
G'day…So the end of the first quarter draws to a close and we see Gold and Silver outperforming ANY other major financial instrument with rises of near enough to 15% for the quarter. That's nice and I still contend that the words of the old BTO classic should be ringing in everyone's ears: "You ain't seen nuthin' yet." Commentators in the mainstream media still talk of 25-year highs for the metals but we know better than to believe the rubbish that those blokes trot out as fact.
Inflation adjusted is the only way anyone can look at precious metals over any serious timeframe – but you all know that coz we've harped on about it for months, right???
Has anyone read Chomsky's Manufacturing Consent, or seen the Canadian produced documentary of the same name? Just wondering.
Gold did remarkably well last week following the rate hike by Helicopter Ben and his merry men. The physical markets again flexed their muscles on the attempt to break down through the $560 level which is beginning to get the same sort of feel that $540 had a few months ago. I still don't discount a sell-off of 15% (taking us back to close to $500) but we do know that it will take a lot of metal and some determined paper players to drive it there, let alone keep it down there for any period of time. I note that my mate Jane from the Australian Bullion Co was quoted in the SMH as saying that there is a lot of pent up wholesale buying ready to buy on any dips. Interestingly, "The Lisa" is waiting for such an opportunity to pick up some cheaper physical metal herself. I am somewhat concerned that she will be like many others- waiting and hoping for the big dip. Hope is not a metric that one should embrace when it comes to investment and finance (trusting others is also way down the list!). Hmmmm. "Women - can't live with 'em, pass the beer nuts." In fact, when I visited her one time back in 2002, I gave her a 5 kilo silver bar (at $4.75). She was very impressed by it and really loved it. Not many people have actually ever seen a real silver bar. She loves it so much more today. Anyone who has saved in dollars (or just been lazy leaving dollars in a bank account) over these past four years has lost 40% of Gold purchasing power and 60% versus Silver. Then again, we're gonna be in the US in August for MiM3 and we'll be spending dollars so it's good to have a few dollars lying around.
What's the technical picture for gold? I'm no technician and there are better equipped people to make comment in the 'Ville. Sure, I watch trendlines and moving averages but fundamentals are driving metals and will continue to, IMO. I think technicals are becoming less and less an issue in this whole game. The sheer weight of dollars chasing such a small amount of metal will render technicals obsolete in the future, IMO. Sure, the paperboys will give all sorts of numbers up with EW counts, Fibonacci whatevers and all sorts of other mumbo-jumbo that works for a few days/months/years and generally always in hindsight. Mr. Prechter has been wrong for the last 5 years in Gold, but still has some credibility due to previous calls - they were ALL in paper denominated markets. Physical precious metals are a very different animal. So, I just said nuthin' about where I see the metals in the near term- you all know my long term view- it has 3 zeros in it!
Gold I think will touch $595 before coming back to 575, probably this week. Why? Just the psychology of the big figure change to a 6. It meant bugger all at $500 but I think the 6 will be a harder hurdle. I could justify $850 today but let's not get too far ahead of ourselves. The downside is $560 then 535 then 505 and I'll buy all tickets below $500 given all current publicly available information and policy. Opinion only.
Silver is due a breather but the ETF tailwind has some giddy-up. Being square paper silver is as short as I would wanna be in the current market. My physical is not for sale, even if it were $15 tomorrow. I'd lighten up on the paper stuff at around the 11.80-90 level and I'm looking for a pullback into the high 10's with a good feel we see 10.20 again not too far down the track. Opinion only. Here's someone else's view of silver.
Gold stocks should be OK although there looks like plenty are ready to ditch on any pullback in metals. Reckon back to 300 HUI if people get their way. Buying a few OTM puts on a few selected stocks, just as insurance, looks to be a prudent move for those not busting a brain to grab some return. Buy 'em when they're cheap and no one else is. Hope you waste your premium!
Lots of chatter about Asia and China. Others in
Then this comes up; you can decide for yourself whether it's feasible. And then this from a site that I highly respect. The SMH throws this out to the public domain. Is this the pot and the kettle?? Methinks so.
Only by reading everyone and everything (some via unlikely sources and media), can you make an informed decision. It's not gonna be in the WSJ or on Bloomberg.
UBS sees more upside in precious metals although notable is its caution regarding Palladium. I don't know much about palladium and platinum so I can't comment much. The rest I agree with but you'd know all that. When is an institution gonna bite the bullet and say something like: "We could easily see $1200 gold as that is the inflation adjusted equivalent of where gold was back in say 1987." Yeah and pigs might fly. Giddy-up.
I've mentioned a few times over the years that I reckon the next wars will be about WATER, not oil or metals or whatever. People can't live without water. The Australian Government is about to sell out its own population--again. I've talked a lot about how these morons are giving away my kids future, all for a few pieces of paper--not even gold!! They have let the whole mining sector get gobbled up by opportunistic predators paying with borrowed paper, they've screwed our telecom sector, our energy infrastructure and the list goes on. This is a huge deal to many down here!
Ron Paul makes plenty of sense in his latest note. Check out his suggested reading for a bit of economic enlightenment.
This was interesting about the old shop down here – hmm.
My fishing trip to NZ was awful. The weather was terrible and the fish knew it! Have you ever tried to cast a fly in 50 mile per hour wind??? We didn't catch a fish in 3 days but we saw a couple that would've taken a small dog should it have been swimming in the river! The closest we got was when I hooked up a big one on a protected lake just outside of Twizel. It broke everything off my rod after taking a dry fly off the top on the first cast. That was exciting and my new favorite fly is the Kakahi Queen.
I did get to run around with my mate and his nice Ruger .223 Magnum and there are a few rabbits feeling a little worse off--actually they aren't feeling much at all. Vermin on the sheep station is fair game--so were the Cormorants who eat the baby trout. As a right hander in everything I do, it is uncomfortable shooting left handed. I'm left-eyed so that's what I've gotta do. It works--ask the rabbits!
Lisa and I went to Sheik Maktoum's marquee at Rosehill for the Darley Rosehill Guineas on Saturday. He has a stud farm in the
We had a great time. The whole day was opulence personified. We enjoyed he finest wines and food, great amenities for the punter, entertainment and great company. Seriously, I've done some pretty good entertaining do's in the last 20 years but this was the finest thing I've ever been to. Even the portable dunnies (Toilets) had granite benchtops and full Royal Doulton porcelain! These guys really know how to put on a great show. They are not in it for the money, they're in it to promote the thoroughbred and make sure its history and magnificence are presented and preserved for everyone. Some history of the Thoroughbred.
Lisa looked sensational, certainly the most beautiful that I have ever seen her. An elegant yet simple crushed burgundy dress with a hat that complemented the outfit perfectly. Matched shoes, purse, pearls and silver jewelery had her spotted as "Best Dressed" in the marquee of over 600 people. She's gonna win the Fashions on the Field at
Roll on Derby Day at
Have a good week.
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