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Gold, Silver, Platinum and Palladium All Decline On Week

June 25, 2011 by Leave a Comment

It was a dismal week for precious metals as prices declined across the board.  Platinum declined by over 3%, palladium and silver by 2% and gold by 1.5%.

As measured by the London PM Fix Price, gold declined on the week by $22.75 after a gain of $8.25 last week.  After closing Wednesday at $1,552.50 gold was hit by selling that drove the price down by $37.75 at Friday’s close.  Gold has now dipped below its 50 day moving average as it has done on numerous occasions since early 2009 but remains solidly above the 200 day moving average.  Since early 2009 the price trend of gold has remained in a solid uptrend and every sell off to the 200 day moving average was followed by significant upward price moves.  The 200 day moving average for gold is currently at $1,410.

 

Gold - Courtesy Stockcharts.com

Silver declined modestly on the week, losing $0.66 and has remained in a tight trading range over the past two weeks between $36.22 and $34.68.

Platinum was down $55 on the week, closing at $1,751, after losing $78 in the previous week.  Palladium was also weak, falling $15 to $739 after retreating $61 in the previous week.  Both metals have large industrial uses and sold off as numerous economic indicators suggest a slowing world economy.

Precious Metals Prices
PM Fix Since Last Recap
Gold $1,514.75 -22.75 (-1.48%)
Silver $34.73 -0.66(-1.86%)
Platinum $1696.00 -55.00 (-3.14%)
Palladium $739.00 -15.00 (-1.99%)

Markets had been positioned for an improving economy, higher interest rates, higher inflation and additional monetary stimulus by the world’s central banks.  Since early May, the consensus has reversed considerably.  Commodity prices have declined substantially and U.S. interest rates, contrary to the expectations of many, have declined sharply.  Contributing to the sell offs in equity and precious metal markets were midweek comments by Fed Chairman Bernanke that, despite lower expectations for economic growth, the central bank had no plans for QE3.  Markets, confronting the loss of both fiscal and monetary stimulus along with slower economic growth, sold off sharply.

The Dow Jones has plunged over 900 points since early May.

 

DOW JONE - COURTESY YAHOO.COM

Commodities have tanked by 16%.

 

COMMODITIES - COURTESY YAHOO.COM

Oil, after peaking in early May at over $112 per barrel, has declined to the low $90’s.

 

OIL - COURTESY STOCKCHARTS.COM

Interest rates, expected to soar after QE2 ended, have declined substantially with the 10 year Treasury note dropping from 3.6% to 2.9%.

10 year treasury - Courtesy yahoo finance

 

The massive amounts of debt in the system can no longer be supported by economic growth.  Bernanke knows this which is why he is terrified of deflation.  The collapse of asset bubbles have resulted in debt that is now unsupported by collateral value, threatening the solvency of banks and countries.

As the current market sell offs turn into a rout, the Fed will again turn to the only option left – money printing on a scale that will dwarf QE2.  As reported by Bloomberg, former Fed Governor Lyle Gramley said,  “The hurdle for QE3 is obviously high. But if large downside risks materialize and the economy slows enough so that the unemployment rate starts to increase again, QE3 would have to be considered.”

The Federal Reserve can’t create jobs, increase incomes, reduce unemployment or maintain the integrity of the dollar.  The one thing the Fed can and will do is produce dollars in infinite quantities to prevent a 1930’s type debt induced deflationary depression.

Filed Under: Featured, Gold, palladium, Platinum, Silver, Weekly Recap Tagged With: , , , , ,

Silver ETF Holdings Decline Again As Gold ETF Holdings Gain

June 23, 2011 by Leave a Comment

Holdings of the iShares Silver Trust (SLV) declined again this week by 106.14 tonnes after a decline of 248.69 tonnes in the previous week.  The year to date decline in silver holdings by the SLV now totals 1,362.19 tons.

The decline in holdings of the SLV from its all time high of 11,390.06 tonnes on April 25, 2011 now totals 1,830.68 tonnes, or a decline of 16.1%.  There is not a direct and timely correlation between the price of silver and the holdings of the SLV as evidenced by the fact that silver has declined in price by a much larger percentage than holdings in the iShares Silver Trust.  From its high of $48.70 on April 28th, silver has had a price correction of 35.6%.

The holdings of silver by the SLV are structured in a complex manner.  The trust is set up so that the SLV price correlates closely to the price of silver.  This is accomplished by allowing Authorized Participants to arbitrage against a premium or discount of the SLV to the trust’s underlying net asset value  (see How Wall Street Made Huge Profits On Silver ETF Crash As Small Investors Sold).

As measured by the closing London PM Fix Price, silver closed today at $35.91, up slightly from last Wednesday’s close of $35.26.  Silver has been consolidating in the mid 30 range after the early May sell off.

As of June 22, 2011, the SLV held 307.3 million ounces of silver valued at $11.0 billion.

 

SILVER - COURTESY KITCO.COM

Silver seems to be building a base in the mid $30’s and presents a buying opportunity for long term investors.

GLD and SLV Holdings (metric tonnes)

June 22-2011 Weekly Change YTD Change
GLD 1,209.14 +9.09 -71.58
SLV 9,559.38 -106.14 -1,362.19

Holdings of the SPDR Gold Shares Trust (GLD) gained by 9.09 tonnes on the week after a decline of 11.52 tonnes in the previous week.   The GLD currently holds 38.88 million ounces of gold valued at $60.3 billion.

As measured by the closing London PM Fix Price, gold closed on Wednesday at $1,552.50, a new closing high on the year.  The price of gold remains in a solid uptrend supported by huge physical demand from investors and central banks.

 

GOLD - COURTESY KITCO.COM

 

Filed Under: Featured, Gold, Silver, Statistics Tagged With: , , , , , , , ,

Gold Gains Slightly On Week While Silver, Platinum and Palladium Decline

June 18, 2011 by Leave a Comment

Precious metals had a tough week as silver, platinum and palladium all declined, while gold registered a small gain.

As measured by the closing London PM Fix Price, gold gained $8.25 on the week after declining by $10.75 in the previous week.  Gold remains in a solid long term uptrend.  Since early 2009, gold has remained above its 40 day moving average and every dip to the 40 day moving average has followed with rallies to new highs for gold.

Gold’s last decline to the 40 day moving average in January of this year was subsequently followed by a rally of over $220 per ounce.  A correction to the 40 day moving average would bring gold back to the $1,400 level.

 

GOLD - COURTESY STOCKCHARTS.COM

Gold has held above $1,500 as world financial markets, oil and other commodities have declined substantially over economic worries.   As the European Central Bank struggles to prevent a Greek default that could trigger a series of other sovereign defaults, debt yields are soaring not only in Greece but also Spain, Portugal, Italy and Ireland.

Markets are beginning to reflect the unavoidable truth that we are reaching an end game where sovereign governments have become the new systemic risk to the financial system.  As debt burdened governments face the prospect of financial collapse and political unrest, the only option will be to sell new debt to the central banks who will buy the debt with newly printed money.  As central banks worldwide compete with each other in massive currency debasement, gold will soar to new highs beyond predictions of the boldest gold bulls.

As the slow motion collapse in Europe unfolds, investors in the U.S. seem resolute in the belief that “it can’t happen here, we are not Greece.”  This argument is rejected by Bill Gross who runs Pimco, one of the largest bond funds in the world.  According to Gross, who recently announced that he would stop buying U.S. Treasury debt, the U.S. is actually in worse shape than Greece.

The total debts of the U.S. government, including off balance sheet obligations for open ended social programs, totals $100 trillion.  Gross notes that “To think that we can reduce that within the space of a year or two is not a realistic assumption.  That’s much more than Greece, that’s much more than almost any other developed country.”

Critics who dismiss the warnings of Bill Gross point to the current level of low yields on U.S. treasury debt.  Why would the U.S. be able to sell its debt at such low rates if the finances of the United States are worse than Greece?  The answer is that crises develop in a linear fashion.  Investors don’t worry about credit risk until the crisis is upon them and suddenly everyone wakes up and panics.

Carmen Reinhart of Harvard and formerly of the IMF correctly predicted that a sovereign debt crisis would follow the financial crisis of 2008.  In a study of bond markets as a forecasting tool, Reinhart showed that rates are a poor forecaster of  repayment risk.  According to Reinhart, “Very often, interest rates are a coincident, rather than a leading indicator” of a looming financial crisis.

Preserving wealth during the next financial meltdown will require taking steps before the inevitable crisis develops.

Precious Metals Prices
PM Fix Since Last Recap
Gold $1,537.50 +8.25 (+0.54%)
Silver $35.39 -1.99(-5.32%)
Platinum $1,751.00 -78.00 (-4.26%)
Palladium $754.00 -61.00 (-7.48%)

Platinum had a volatile week, declining by $78 on the week to $1,751.00.  After moving up by $650 per ounce between July 2009 and May 2010, platinum has been consolidating its gains.  During 2011, platinum has remained in a narrow but volatile trading range between $1,700 and $1,850 per ounce as traders try to sort out whether the predominant demand for platinum is industrial usage or investor demand.

PLATINUM - COURTESY STOCKCHARTS.COM

Palladium had the biggest decline in the precious metals group, falling by $61 per ounce for a loss of 7.48%.  After reaching a high on the year of $858 in February, palladium has been correcting in a sideways pattern.

 

PALLADIUM - COURTESY KITCO.COM

Silver declined by $1.99 on the week to $35.39 after a gain of $2.19 in the previous week.  After the sharp decline in early May, silver has been building a base in the $34 to $38 range.

 

SILVER - COURTESY STOCKCHARTS.COM

Filed Under: Featured, Gold, palladium, Platinum, Silver, Statistics Tagged With: , , , , , ,

Silver and Gold ETF Holdings Both Decline On Week

June 15, 2011 by 3 Comments

Holdings of the iShares Silver Trust (SLV) declined by 248.69 tonnes for the week after declining by 27.12 tonnes in the previous week.  The year to date decline of silver held by the SLV is 1,256.05 tonnes.

The holdings of the SLV hit an all time high on April 25, 2011 at 11,390.06 tonnes and the decline from this high now totals  a substantial 1,724.54 tonnes.  Total holdings of the SLV have declined by 15.1% from the high of April 25, while the price of silver has declined by 27.6%  from its high of $48.70 reached on April 28th.

Silver closed today at $35.26 (as measured by the closing London PM Fix price), up $8.58 from the low of the year at $26.68 reached on January 28th.  Shares of the SLV closed today at $34.88, down $13.47 from the high of the year at $48.35.

 

SLV - COURTESY YAHOO FINANCE

The iShares Silver Trust currently holds 310.8 million ounces of silver valued at $10.95 billion.  At the start of 2011, the SLV held 351.1 million ounces of silver valued at $10.9 billion.  The holdings of the iShares Silver Trust does not directly track the price movement in silver due to the manner in which it is structured.  For a discussion of how SLV shares are created or redeemed by Authorized Participants, see How Wall Street Made Profits On Silver ETF Crash.

According to the iShares website, the SLV closed yesterday at a premium of 2.54% to the fund’s net asset value.  On rare occasions when silver is exhibiting large price swings, the premium or discount to net asset value has been as large as 6%.

GLD and SLV Holdings (metric tonnes)

June 15-2011 Weekly Change YTD Change
GLD 1,200.05 -11.52 -80.67
SLV 9,665.52 -248.69 -1,256.05

Holdings of the SPDR Gold Shares Trust (GLD) declined on the week by 11.52 tonnes, after declining in the previous week by 1.30 tonnes.  The GLD currently holds 38.58 million ounces of gold valued at $59.0 billion.  The all time record holdings of the GLD was 1,320.47 tonnes on June 29, 2010.

Gold traded in a narrow range over the past week, declining by $8 per ounce.  Gold has stayed above the $1,500 level since May 20th and has gained $141.25 since the beginning of the year.

Shares of the SPDR Gold Trust closed at $149.12, up $0.45, not far off the year’s high of $153.61.

 

GLD - COURTESY YAHOO FINANCE

Filed Under: Featured, Gold, Silver, Statistics Tagged With: , , , , , , ,

Gold Down Slightly On Week While Silver, Platinum and Palladium Advance

June 11, 2011 by 1 Comment

Gold pulled back slightly on the week while silver, platinum and palladium registered strong gains.

As measured by the London PM Fix Price, gold gave up $10.75 on the week, while silver advanced by $2.19 for over a 6% gain.  Gold remains in a solid uptrend while silver has traded in a narrow range in the mid to high $30’s after the early May sell off.

Platinum continued its winning ways with a $22 dollar gain after picking up $21 in the previous week.  As noted last week, platinum sells below the price at which new mine expansion is profitable.   A price of $2,100 per ounce in necessary in order to motivate platinum miners to expand exploration and production.

In addition, the platinum to palladium ratio is only 2.2 compared to a historical ratio of 3.0 to 4.0, suggesting that platinum is undervalued relative to palladium. Platinum prices have been in a narrow price range between $1,500 and $1,840 since the beginning of 2010.   A breakout above $1,900 could lead to sharply higher prices.

After advancing by $13 per ounce last week, palladium jumped by $45 on the week.  Palladium had a huge run from 1996 to 2000 when the price moved up from $100 to $1,100.  During the worst part of the financial crisis in 2008, palladium dipped below $200 but has since been in a strong uptrend.

 

Palladium - Courtesy kitco.com

Although some might have expected gold to move up strongly in the face of steep sell offs in the financial markets and the looming threat of a debt ceiling stalemate, the uptrend in gold remains intact.

Anyone doubting the long term value of gold as a store of value versus the paper dollar can reflect on this week’s USA Today column  disclosing the precarious state of U.S. government finances.  Unfunded and off balance sheet financial commitments of the U.S. for government pensions, social security and medicare amount to $527,000 per household.

Precious Metals Prices
PM Fix Since Last Recap
Gold $1,529.25 -10.75 (-0.70%)
Silver $37.38 +2.19(+6.22%)
Platinum $1,829.00 +22.00 (+1.22%)
Palladium $815.00 +45.00 (+5.84%)

The Government has clearly made promises that are economically unfeasible.  What will happen when millions of people, with a strong sense of entitlement and blind belief in the Government, suddenly stop receiving benefit checks?  Or if the checks do keep coming (by virtue of the printing press) of what value will they be?

Filed Under: Featured, Gold, palladium, Platinum, Silver, Statistics Tagged With: , , , , ,

Perth Mint Introduces Stunning Silver Proof Coins

June 9, 2011 by 1 Comment

The Perth Mint has offered a variety of stunningly beautiful coins over the years.  As an investor/collector, it is particularly appealing to purchase coins that not only have the intrinsic value of precious metals but also offer a magnificent coin design.

The latest offerings from the Perth Mint highlight their artistry in producing coins with colorization.  The limited mintage coins are not only enjoyable to own and display but also make excellent gifts, especially for those who have never owned precious metal coins.

The three latest silver proof coins from the Perth Mint illustrate that investing in precious metals can not only be profitable but also enjoyable.

Australian Sea Life II – The Reef – Hawksbill Turtle

This coin’s reverse features the endangered Hawksbill Turtle which lives in the coral reefs of northern Australia.  The silver proof coin’s mintage is limited to only 10,000 coins and is offered in 1/2 ounce size 99.9% pure silver.  The coin’s obverse depicts Her Majesty Queen Elizabeth along with the 2011 year date.  A display case is included with the coin.  The cost of the coin in US dollars is $65.20.

Australia’s Box Jellyfish 1 oz Silver Proof Coin

Depicting the deadly box jellyfish on the coin’s reverse and offered in 99.9% pure silver, this 1 ounce coin has extremely limited mintage of 5,000.  The obverse of the coin features Her Majesty Queen Elizabeth II and also the monetary denomination.  A high gloss timber presentation case houses each coin.  The cost of the coin in US dollars in $112.04.

Transformers III – 1 oz Silver Proof Trio

Transformers III comes as a three coin set with mintage limited at 5,000 coins. Featured on the respective coin’s reverse are colorized depictions of Bumblebee, Optimus Prime and Megatron.  Each 1 ounce coin is struck in proof quality 99.9% pure silver and the obverse depicts Her Majesty Queen Elizabeth.  Each coin comes housed in a clear presentation box.  The cost of the three coin set in US dollars is $288.82.

While the Perth Mint offers a wide variety of coins, many in limited mintage, the U.S. Mint has taken the opposite approach based on the theory that not every collector who wanted the coin would be able to purchase it.   Neither has the U.S. Mint ever produced coins with colorization and many of the U.S. coin designs are dated.

The U.S. Mint should consider producing limited mintage coins with more imaginative designs to create some product excitement and expand the universe of coin and precious metal collectors/investors.

 

 

 

Filed Under: Featured, Perth Mint, Silver Tagged With: , , , , , ,

Gold and Silver ETF Holdings Decline On Week

June 8, 2011 by 1 Comment

Silver holdings of the iShares Silver Trust (SLV) declined for the week by 27.12 tonnes after being unchanged in the previous week.  The price of silver, as measured by the closing London PM Fix Price has declined by $1.73 or 4.6% since June 1st.

After reaching a high of $48.70 per ounce on April 28th, silver has declined by $12.48 or 25.6% based on today’s closing price.  From the low of $32.50 on May 12, silver has seen a price recovery of $3.72.

The iShares Silver Trust has seen a substantial reduction in silver holdings of 1,007.36 tonnes since the beginning of the year when silver traded at $30.67.  The decline in holdings by the SLV from late April have been even more dramatic.   The SLV hit an all time high for silver holdings on April 25, 2011 of 11,390.06 tonnes.  The decline in SLV holdings from the all time high registers at 1,448.73 tonnes or 46.6 million ounces of silver valued at $1.7 billion.

The iShares Silver Trust currently holds 318.7 million ounces of silver valued at $11.5 billion.  On April 27th, the value of silver held by the SLV was $16.1 billion.

At today’s closing price of $36.03, shares of the SLV traded at a premium of $0.71 or 2.0% to the net asset value of the Trust.  Since the beginning of the year, the SLV has gained 20.2% and over the past year has increased by 115.4%.  For a discussion on why silver prices may see a quick recovery to all time highs see – How Soon Will Silver Hit New Highs?

GLD and SLV Holdings (metric tonnes)

June 8-2011 Weekly Change YTD Change
GLD 1,211.57 -1.30 -69.15
SLV 9,914.21 -27.12 -1,007.36

Holdings of the SPDR Gold Shares Trust (GLD) were little changed on the week, declining by 1.3 tonnes, after a decline of 1.21 tonnes in the previous week.  The GLD currently holds 38.95 million ounces of gold valued at $59.9 billion.  Holdings of the GLD hit at all time record high of 1,320.47 tonnes on June 29, 2010.

Gold prices gained slightly on the week, closing up $4.00 per ounce from the June 1 close.  Gold has now gained $149.25 since the beginning of the year, up 10.75%.  Gold has remained in a narrow trading range for several months, consolidating its early year gains.  Gold has remained above the $1,500 level since May 20th when it closed at $1490.75 per ounce.

Filed Under: Gold, Silver, Statistics Tagged With: , , , , ,

Silver Demand To Soar In Solar Energy Applications

June 8, 2011 by Leave a Comment

Industrial applications for silver continue to increase based on silver’s unique chemical properties.  In 2010, total industrial demand applications for silver increased by almost 21% and since 2001 has increased by 40%.  Industrial applications now consume 46% of total world silver supply and are likely to show continued increases as new uses for silver are discovered.

One fast growing business sector that is projected to consume increasing amounts of silver is the solar energy industry.   According to the Silver Institute, the amount of silver used in photovoltaics could double by 2015 to 100 million ounces from last year’s consumption of 50 million ounces.  Based on last year’s supply statistics, solar energy applications would absorb almost 10% of total silver supply within the next four years.

According to the Silver Institute, silver is used as a film coating on photovoltaic cells to maximize light absorption which enhances the electric output of the cells.  Due to silver’s high efficiency in conducting both electrical and thermal energy, it is an essential component in photovoltaic produced energy.

The Silver Institute notes that silver’s use is also essential in many products of everyday life such as cells phones, personal computers and laptops, solid state lighting, global positioning devices and automobiles.

The Executive Director of the Silver Institute, Michael DiRienzo, stated that “Silver surround us.  And every day, from our commute to work, to our cell and smart phones, to the lighting in our workplace and homes, to our computers, silver is an important element which makes our lives more convenient and energy efficient.”

 

Filed Under: Silver Tagged With: , , ,

How Soon Will Silver Hit New Highs?

June 8, 2011 by Leave a Comment

The recent sharp price correction in silver has left many wondering how long it will take before silver recovers and moves on to new highs.

Since hitting its April 28th peak price of $48.70 (as measured by the closing London PM Fix Price) silver declined to a low of $32.50 on May 12, for a loss of $16.20 per ounce or 33.3%.

Looking at the last major price correction in silver which occurred in 2008, we find that the 2011 correction is far less severe.   Silver hit a high of $20.92 per ounce on March 17, 2008 and then proceeded to consolidate until late July.  In August 2008, the financial crisis entered its worst phase and asset classes of every type were driven lower by panic selling and forced liquidation.

On October 24, 2008, silver reached its low at $8.88 and then began a recovery phase, closing at $10.79 per ounce on December 31, 2008.  From the March 2008 high to the October 2008 low, silver dropped by a shocking 57.6%.

 

SILVER - COURTESY KITCO.COM

 

From the lows of 2008, silver never looked back and rose to higher highs throughout 2009, closing the year at $16.99 per ounce.  The upward trend continued during 2010 and silver finally closed above the March 2008 high in September of 2010.  Silver continued to gain momentum through the final three months of 2010 and closed at $30.63 per ounce on December 31, 2010.

It took two and a half years (30 months) for silver to fully recover from the price correction of 2008.  For a variety of reasons, the recovery to new highs in silver from the May 2011 sell off should be much shorter.

Authorities were unprepared for the financial meltdown of 2008 and were completely caught off guard as to the severity of the crisis.  In February 2008, just prior to the collapse of major banking institutions, Fed Chairman Bernanke said “I expect there will be some failures.  I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”  It was only months later that almost every large bank in the country was on the verge of failing.

At mid year 2008, the highest ranking financial officials in the U.S. Government could still not see the financial meltdown that was imminent.  In June 2008, Fed Chairman Bernanke said the danger of the economy falling into a “substantial downturn” appears to have waned.  Literally days later, the global financial system was on the verge of collapse.

The system has not been fixed since 2008, despite the expenditure of trillions of dollars by governments and central banks to restore financial stability.  The attempt to solve the problem of too much debt by extending additional credit has failed – the cure cannot be the same as the disease.

Every economic indicator is now pointing towards another global slowdown and this time the insolvency threats extend to numerous sovereign entities which will make containment of a financial crisis more difficult.   Above all else, the world of paper currencies relies upon confidence.  Who is going to be confident that insolvent sovereign States can come to the rescue in Financial Crisis II?

Global authorities do not want to risk a replay of 2008 when the entire financial system came within a heartbeat of collapsing.  At the first signs of a potential financial crisis, central banks will use the only tool they have left and flood the world with printing press money.  The alternative is to risk a full blown Financial Crisis II which ultimately may not be containable.  As the prospects for massive quantitative easing intensify, investors seeking to preserve their wealth will turn to precious metals driving prices sharply higher.

Looking back a year from now, investors will realize in hindsight that the price dip of May 2011 represented the best buying opportunity in silver since October 2008.

 

 

 

 

 

Filed Under: Featured, Silver Tagged With: , ,

Gold Advances On Week, Silver Retreats As Financial Crisis II Looms

June 3, 2011 by Leave a Comment

Gold, platinum and palladium all advanced on the week while silver gave up most of the previous week’s gains.

As measured by the London PM Fix Price, gold gained $7 on the week to $1,540.00 while silver pulled back by $2.50 to $35.19.   Platinum moved up by $21 to $1,807.00 and palladium gained $13 to $770.00.  After the London close, prices of precious metals moved up strongly in New York trading, especially silver, which last traded at $36.39, up $1.20 from the earlier London closing price.

Financial markets worldwide pulled back sharply as the stock traders finally began to acknowledge the fragility of the world’s paper back financial system.  Governments that have borrowed and spent trillions of dollars to stimulate economic growth and support a fragile banking system now find themselves reaching the limits of their borrowing capacity.

It is becoming obvious that the financial crisis of 2008 was just a warm up act to the real financial nightmare that is looming ahead.  Despite trillions of dollars in stimulus spending, coordinated with a money printing campaign by world central banks, the economies of the U.S. and Europe have not recovered.  Unemployment continues to grow, real estate values continue to plunge, debt levels have reached unsustainable levels and real incomes for the majority of workers continue to decline.

There are numerous events that could trigger the second financial crisis  There is no way of knowing which specific event will trigger the next crisis,  nor does it matter.  What does matter is the manner in which Financial Crisis II will be dealt with by world governments and central banks.  Unable to raise taxes or take on trillions more in borrowing, monetary authorities will exercise the last resort option of money printing on a massive scale to avoid a total collapse of the world monetary system.  The gold market is already reflecting this scenario as one of the few safe havens against paper currencies that have little intrinsic value.  When Financial Crisis II gets under way, uninformed talk of a “gold bubble” will quickly disappear as investors will buy gold at any price to preserve their wealth.

Precious Metals Prices
PM Fix Since Last Recap
Gold $1,540.00 +7.00 (+0.46%)
Silver $35.19 -2.50(-6.63%)
Platinum $1,807.00 +21.00 (+1.18%)
Palladium $770.00 +13.00 (+1.72%)

Will platinum, which has lagged the price rallies in other precious metals, start to play catch up?  According to the Wall Street Journal, due to rising production costs for platinum, a price of $2,100 per ounce is necessary to encourage increased mine production.

The historical price ratio of platinum to palladium also suggests that platinum prices could rally significantly.  The Wall Street Journal notes that when palladium reached $860 per ounce in February, the ratio was 2.15 compared to 2.12 today.  The historical average of the platinum/palladium ratio is 3.0 to 4.0, suggesting that platinum is undervalued.

 

PLATINUM - COURTESY STOCKCHARTS.COM

Filed Under: Featured, Gold, palladium, Platinum, Silver, Statistics Tagged With: , , , , ,