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Precious Metals Recap

Commentaries & Views

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(Kitco News) - Those who have followed our comments over the past few weeks already know my levels for engaging in the gold price. We have been active buyers at $1,282 support and sellers at the $1,317 level.  The first go around, we bought at $1,281.50 and sold the position at $1,316.80. We took a flyer at $1,302 with a hard stop at $1,297 and were handed a small loss for trying to catch the reversal. We re-entered at $1,282 and will hold this trade unless we breach $1,292. We consider the macro picture to remain bullish, as global growth slowdowns continue to argue for accommodative monetary action. Silver has struggled against this backdrop of slower global growth but we continue to suggest accumulation of the metal on any weakness under the $15 print. We exited palladium at $1,605 and suggested that the global slowdown may attract sellers, as car demand may soften. We think the supply-demand levels suggest further upside in palladium from current levels but as we cautioned, investors need to be able to handle extreme volatility. As with palladium, we also exited our rhodium trade at $3,300 and suggested it may see $3,700 but we only tested the $3,500 level. Again RH was met with heavy selling as global growth concerns continued to make the news. We continue to see potential in RH but would wait for a break above the $3,000 level to confirm the next leg higher. Investors should remain committed to the metals complex as a balanced approach to their portfolios. There is a lot that can go wrong in a hurry and a weighting of gold and silver in your portfolio should be considered.

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