Precious Metals long term wealth insurance
13 May 2022 close: Metals and especially silver suffered last week on higher interest rates and probably some general market nervousness.
Our positions remain unchanged with an even 3 way balance between Gold, Silver and Platinum, where Platinum continues to look strong against Silver and Gold in spite of recent weakness.
Technically Gold looks a little stronger short term against the USD, although Weekly, Monthly and Quarterly are all showing a firm downtrend. Further price erosion however looks to quickly bring about low risk weight in the key Weekly and Monthly time intervals. We see that the coming days may harden the technical picture. A rally into the coming week may either confirm longer term weakness or a break back up. So, these technicals do make us less certain, but having our base currency in Euro and the much higher inflation economic environment plus the unlikely event of central bank tapering (IOO), Precious Metals remain the centrepoint of our risk insurance. Metals may react adversely intially as certain bubble assets feel more price pressure and metals simply move along that path intially. This could last several months.
If the war in Ukraine comes to a sudden halt however, we could experience a fairly massive 'sigh of relief' rally in equities and pressure on Metals and various other key commodities like Oil.
01 April 2022 close: Traditional market risk appears to be ignored whilst it feels like there is more global financial and geopolitical uncertainty than ever before. Market participants, whether in stocks, bonds, metals or crypto put full trust in their risk on positions across asset classes. This high risk and hugely opportunistic, in our view, approach is better avoided. As inflation with increased risk of stagflation is moving into the system, we simply stay put with a 50% metals portfolio and roughloy equal weight between Gold, Silver and Platinum. Gold closed Q1 at $1924 which is around the 2011 high whilst Gold vs Euro reached it initial upper resistance target at €1872 briefly touching €1900 before settling back. Metals are not in favor which is a good reason to stay firm on these holdings. The Quarterly Gold risk chart is still in an unfinished uptrend and supports the ongoing monthly uptrend since Nov 2021. Longer term support is at $1810. A clear break of $1960 is positive for a stronger short and medium term advance.
Gold/USD risk position relative to
Quarterly, Monthly, Weekly and Daily risk weight data.
(Previous update in brackets)
|Au Trend||↓ (↑)||↓ (↓)||↑ (↑)|
|Au % Risk
|56 (64)||35 (60)||8 (40)|
Portfolio allocation 50% (40%)