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Weekly Market Wrap

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Crushed: Metals Prices Respond to Negative News This Week

We're Perilously Close to a Breakdown -- Which Direction from Here?

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Announcer:

Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.

Mike Gleason:

Welcome to this week's market wrap podcast, I'm Mike Gleason.

The moment of truth is drawing near. As things stand, both gold and silver prices rest just above levels they touched back in December 2011 and again in mid 2012. Will these levels act as a springboard for a spring rally? Or will they give way to another leg down?

After months of directionless action in the precious metals markets, a directional move that breaks the trading range one way or the other is coming. Our analysts continue to expect a rally off these deeply oversold levels, though perhaps not to new all-time highs for some time.

If we're wrong and the short sellers manage to push spot market prices even lower from here, then we'll be looking at major divergences with the physical market, where demand among retail investors remains incredibly strong. Pre-1965 90% silver coins that are now very difficult to obtain may become nearly impossible to get. And premiums for all products could rise in response to spot prices that are widely perceived to be artificially low. At Money Metals Exchange we are now quoting at least some kind of delivery delay on nearly every single silver product we offer. The mints simply can't keep up and produce the coins and bars fast enough to meet the overwhelming demand.

This week gold got hit with a bevy of negative news items. A surprise early release of the Federal Reserve's most recent FOMC minutes was interpreted as bearish for inflation plays. Some FOMC members suggested Quantitative Easing could come to an end sooner rather than later. In response, gold fell more than 1.6% on Wednesday, and it's continued lower still this morning.

Adding to the selling pressure was news out of Cyprus. According to reports, the troubled island country must sell 400 million euros' worth of gold reserves in order to raise cash. This amounts to about 10 tons of gold. It's a relatively small sum that will be more than offset by expected central bank net buying in other countries. Central banks around the world added 460 tons to their reserves in 2012.

Finally, a bearish new price forecast issued by Goldman Sachs gave traders another excuse to sell gold. However, I note that forecasts from Wall Street firms constantly change and tend to be more trend chasing than trend anticipating. In other words, it's quite common for bearish pronouncements to be issued at cyclical market lows. Major bottoms occur when everyone in the mainstream is bearish, including the analysts.

Despite the bad news week for gold, we still haven't seen it breach major support levels – at least not at this point. It currently trades below last week's lows. Silver is faring no better, as it has dropped below $27 this morning as we're recording this podcast.

Platinum sells at a slight discount to gold once again after commanding a slight premium earlier this year. Whenever platinum can be bought at a discount to gold, it tends to represent good relative value. Historically, platinum has more often traded at a premium – often in the 1.5 to 1 or 2 to 1 range.

Money Metals Exchange has beautiful Canadian Maple Leaf and Australian Platypus platinum coins in stock. Occasionally we have platinum bars as well if you're looking to save a few dollars an ounce compared to the coins.

If you haven't already, please be sure to check out our newly redesigned website for up-to-date pricing information. You can even place an order online now through our secure shopping cart.

As always, you can also place an order directly with one of our knowledgeable, no-pressure Specialists by calling 1-800-800-1865. If you haven't taken the price plunge and purchased precious metals from Money Metals Exchange before – or bought from anyone for that matter – check us out and find out why we're the fasting growing dealer in America with an unprecedented level of customer satisfaction.

Prices are attractively low and those who don't have much of a position in the precious metals – or any position at all for that matter – shouldn't let this type of buying opportunity pass without taking advantage of it. Again, you can either visit our website at www.MoneyMetals.com or give us a call at 1-800-800-1865.

Well, that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for your depreciating dollar... with speed, with accuracy, and with top notch service. Have a great weekend everybody.

Announcer:

Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.

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