Gold/USD London pm fix at all time high on July 24, 2020

Gold/USD	LT-M	MT-W	ST-D
1898 (1808)
Au Trend	↑ (↑)	↑ (↓)	↓ (↓)
Au % Risk Weight	94 (94)	93 (93)	94 (83)
Platinum/USD
918 (865)
PT Trend	↑ (↑)	↑ (↑)	↓ (↓)
Pt % Risk Weight	57 (55)	80 (80)	88 (73)
Allocation	Pt:30% Au:70% (Total 100%)

The Precious Metal space had one if its best weeks ever with Gold up 100 dollars last week and settling at 1898 after the London PM fix at an all time high of 1902 taking out the August 2011 pm fix highs at 1895. Whilst all our time frames are in overbought territory we must now first see bearish (higher price to lower risk) divergence in the MT and Long term time frames before calling a top. This is still weeks away and we can see some more volatile action reaction markets. Whilst gold hasn’t yet taken out the all time intraday high tick at 1920, this new all time high pm fix is probably more significant and will add to a fear of a necessary reset. Is that fear justified? Yes it is. Fiat money is at a crossroads of finding continued existance in a new economic order and being fully digitilised. No one knows what will happen and we are sure various impossible yet creative scenario’s have already been discussed amongst elite peer groups. Early last week we invested our 30% Gold risk divestment into Platinum. Platinum is still fundamentally forecast to be weak but this us all about industrial use. Arguably Palldaium follows the Tesla stock and Platinum the opposite. PT however is as good as gold and always has been. It is a much smaller market with western supply coming almost entirely from South African mines. This metal needs to be rediscovered and once it does it will rebalance at a normalised level vis a vis gold. Platinum usually either precedes or follows silver which has been equally weak against Gold. Next week we will update on the Gold Platinum ratio risk weight against the chart patterns shown below. With Gold landing at this all time 2011 high level there is always a risk of pause and volitile profit taking as daily prints a slight down trend in a highly overbought range. This will be temporary. As more speculators may switch a few percent of their gold to Silver and Platinum in anticipation of a strong ratio adjustment.
Gold/USD, once it flies into uncharted territory, eyes an initialy objective of 2500 on a normal linear scale.
Platinum/USD turned down in Daily time frame. Initial object is the 1041 high recorded in January this year. The subsequent crash to 600 shouldn’t have happened as evidenced by the massive bullish divergence in the Monthly time frame. This market has only just started in spite of industry bearishness. A series of closes above 1040 opens a low risk premium trade towards the 1500 level. No Change in holding our newly preferred Gold Platinum spread investment.

21 July:: Today we re-entered our 30% Gold for cash profit 10 days ago at 1802 into Platinum at $865. Platinum has been seriously week for several years and ther are good reasons not wishing to own the metal. However this weakness cannot historically be aligned with the strong advance of gold since 2018 and this weeks further expected advance in Silver. At this level and under these extreme circumstances Platinum will attract specualtive attention whilst it is a solid car industry replacement for the much more expensive metal Palladium. Because PT is less liquid than Gold or Silver, the white metal could advance very quickly to double its current value. Another strong reason for seeking refuge in ‘anything precious’ is the obvious weaker dollar trend at this moment in a struggling world economy with overload of debt and the fact that the Gold PT ratio equilibrium is more happy at the 1.0 level. In 2000 and 2008 Platinum was double the price of gold. We sometimes say: ‘buy if no one is interested and be patient’. Our risk management style deserves a more careful approach, but adding to metals on clear upward breaks is on the cards.

This gets us back to 100% in metals with Gold now at around 32%, Silver at 55% and Pt at 13% of the total precious metals portfolio.
We will add the Platinum update to this Gold and Silver blog section and our portfolio allocation represents well our technical outlook for precious metals and their internal price ratio’s.
Silver had a very strong boost today with a 6% rally hitting our first objective at 21.15. A break above this level for 3 days will target $35.00

Platinum/USD live price

Silver/USD	LT-M	MT-W	ST-D
22.68 (19.25)
Trend	↑ (↑)	↑ (↑)	↓ (↓)
% Risk Weight	75 (75)	93 (92)	90 (91)
Allocation	100% (100%)

Silver rallied over 15% last week peaking briefly at 23.25 on Wednesday and holding these higher levels. the daily runed down again but at a higher risk level meaning we should first see bearish divergence in this short term time frame to warrant a more serious short term pause or correctio. This market is unlikely to stop its advance until we see a medium term correction type divergence. Looking at the chart formation and risk tools, this will be at least one or 2 months away. Because silver

21 July: Interim Update. Today’s strong 6% advance to 21.15 finally opens this market to a more realistic price discovery level. A break of the horizontal resistance at 21.15 for several days sets the next price target for Silver at 35.00 which is a strong reason to increase our total holding of precious metals. We remain fully invested in Silver which is now the largest precious metals holding in our portfolio complented with 32% gold at 13% Platinum as of today. The next price objective is the horizontal resistance that provided support during ther period Jan 2011 and March 2013. That resistance resides at the 27.00 handle. The real objective should be somewhere between 27.00 and 50.00 and where 35.40 was fairly strong resistance durin that same 2011 and 2013 period. No change staying fully invested in Silver.

17 July: As with Gold/USD, silver shows signs of short term consolidation although the Long term monthly timeframe shows solid strength. Our 21.15 objective is still very much in play even though the 19 handle has set a fairly strong resistance level since September 2017. It may take a bit longer for Silver to drive through comfortably. Unlike physical gold, which is easier and cheaper to trade we hold on to our full silver allocation until risk in the primary uptrend which started, like gold, in December 2015 and hit a new unexpected quick price low in March this year shows bearish divergence in either the Medium term or Long term time frames

GOLD/SILVER Ratio	LT-M	MT-W	ST-D
83.25 (93.27)
Trend	↓ (↓)	↓ (↓)	↓ (↓)
% Risk Weight	40 (40)	10 (10)	10 (10)
Allocation	50/50 AU/AG (50/50 AU/AG)

We continue hold our bearish view on the Gold/Silver ratio favouring Silver in our portfolio and still aiming for that more recent equilibrium level of 60-65. Many of the silver bugs still visualise that historic equilibrium of 10-15, but for now this looks highly speculative. Any reset should probably include silver as money and possibly also a digital alternative to a basket of major fiat currencies. We have a clue how it can be resolved as discussed previously but absolutely no clue as to what will actually happen. As we ride a geo-politcal mess anything is of course possible and we are currently living on a very speculative and dangerous platform called planet earth. So, we’ll stick to the charts that at least give us some direction. If we look at Tesla, Amazon, Facebook and Palladium to name a few, we can see what is possible in a world that appears to going berserk. There are bubbles to be pricked and Gold/silver may already have seen that. As we see Platinum more as a Gold space commodity we will continue to separately comment Gold/PT and Silver. No change in maintaining a balanced spread between Silver and Gold/Platinum.

17 July: The Gold/Silver ratio allocation is a direct result of the risk allocation to the individual metals, but also shows how we seen an opportunity to allocate more to Gold or Silver in the metals space. As we have seen with Platinum, that metal has lost all its shine even though it is the Rolls Royce of precious metals. Some day in the future we shall not be surprised to see PT rise above the level of gold again whilst having lost so m uc h more than we expected a few years ago. Historically platinum must still represent a tremendous opportunity as does Silver at this level of ratio well above the equilibrium of closer to 60. Platinum is a clear buy if it closes above 900 with an immediate $2000 target. As it may be difficult to get hold of physical PT some allocation to this metal can be part of the the total metals allocation. Long term risk appears low and opportunity high. Physical pt numismatics, if at all available and at a much higher price, is also a worthwhile wealth preservation commodity. No change to keep a level balance between gold and Silver, and or some Platinum, which a bias towards silver.