Premium Updates

It's been almost a month since we've posted our latest mid-week update (sent/posted ahead of schedule; featuring charts) in which we suggested using speculative capital to bet on higher precious metals prices, and here we go again, as we once again believe that desperate times call for desperate measures.

The markets in the US have been closed today, but based on Kitco's internal gold/silver prices we might infer that silver has just moved to new highs and gold moved much higher as well. Consequently, unless the situation is just as extreme tomorrow but in the opposite direction (not likely), we're going to see much higher prices of GLD and SLV ETFs along with rising values of mining stocks. Silver moved over $1 higher today, so the situation is becoming critical, as these types of rallies usually take place close to the end of a rally. Are we there yet?

Two reports were released this week that are bullish for gold. The World Gold Council’s Demand Trends report says gold demand wills stay high this year and that China is breathing down Indian’s neck to claim the title as the world’s largest consumer of the yellow metal. The U.S. Securities and Exchange Commission revealed the holdings of some of America’s largest hedge funds. The good news is that they still like gold. And another story this week—the gold rush is on—California here we come!

Silver is up over 6% for the week and Subscribers who followed our analysis took full advantage of this rally - with both long- and short-term capital. However, the recent rally took place on strong volume, which caused the volume for the SLV:GLD ratio to spike - in the past declines followed after such a development. In today's update, we explain if this time is really different. Meanwhile, gold and mining stocks reached resistance levels, so the question is should you exit your speculative positions. Naturally, this is one of the things what we comment on in this week's update.

The ironic fact this week is that part of a bearish head-and-shoulder's pattern in mining stocks appears to be a bullish reverse head-and-shoulders pattern with noteworthy target for the sector. In addition to explaining this phenomenon, we decided - as requested - to provide you with the True (!) Seasonal pattern for gold in March.

Message sent on February 17th, 2011

Message sent on February 14th, 2011

Next week we’ll find out if the Big Guns are still investing in gold when the U.S. Securities and Exchange Commission will release information on their stakes on Feb. 14. Also, we ran into two bright MIT economists who have found a new way to measure inflation ahead of the government’s Consumer Price Index.

Today's Premium Update features 24 charts including 6 gold charts (one of them illustrates a breakdown), 4 silver charts and 2 charts dedicated to the gold:silver ratio (what does high volume in the ratio mean?). We also covered the recent breakout in the yield spread between short- and long-term bonds, and seasonal patterns for gold in February. Additionally, we've analyzed the current situation on the palladium market.

The general stock market appears to have a significant impact on the situation in precious metals, especially silver - today we provide details on what to look for as an indication that silver will indeed rally or plunge from here.