Precious metals have been on a run for the last 48 hours, pushing gold back over $1,400/oz and silver back over $30/oz. Platinum and palladium have followed gold and silver on the rise to $1760 for platinum and $800 for palladium.
These highs have been reached with very light trading volume during the statistically good week between Christmas and New Years. However, this year a winter storm has prevented traders from getting to work after the Christmas holiday as they are stuck in airports across the country awaiting clear runways. Dont mistake this for the reason, but merely a contributing factor.
The London market closure yesterday is another factor that is lending to the light trading volume in metals this week.
This could lead to few different scenarios, one is a nice pull back just after the first of the year as fund managers and investors take any profits they could not take in 2010. This will start the year off for them, with a positive trade that could cushion their books against any losses through 2011. It could also be a peek in to how fast metals will rise in the new year based on investor speculation and uncertainty within markets and currencies across the globe.
Profit taking is likely to happen within the next two weeks, sooner rather than later. When it does it will be an excellent entry point for those that have been watching on the sidelines thinking it is too late to enter metals. Ultimately, precious metals will continue their rise for a few years, so $30 silver and $1400 gold are still within reason for a safe haven against the instability of today.
The only ones that are feeling uneasy about todays metals prices are those that have been investing and analyzing charts for years. Keep in mind, our country has never been in this situation before, not even during the great depression, so any rules that were followed before to aid in determining investments are out the window. It’s a new game, being played with a new set of rules and regulations. Just ask JP Morgan about that.
The new game seems to be titled ETF’s, and that is making us here at precious metals news uneasy. It is reminding us of the time when every bank began to offer subprime mortgages because so much money was to be made by giving every beating heart a house. Now there is so much money to be made by creating a cheap way to invest in metals, and that way is ETF’s. Buyer beware!
Buy physical metal and you will not have to worry about getting in a situation where you are holding a worthless piece of paper.
Prepare yourself to take advantage of any pullbacks that happen in metals over the next 30 days.