Precious Metals still provide primary insurance
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.
25 Febr 2022 close: Geo-politics has taken control of financial markets. The invasion by Russia of Ukraine, a sovereign state, put nations around the world on high alert and sent markets tumbling and precious metals up sharply last Thursday. It shows the immense financial risk that is always around the corner besides the immense human suffering in case of war. That war is now on our own doorstep and we strongly follow our asset protection strategy to remain fully committed to precious metals. At time (Sunday 27/2/2022 15:00 CET) of writing this short note the latest news is Russia ordering activation of nuclear armor. Speculation with financial assets has truly become a matter of secondary importance. We are surprised that gold sold off sharply again within 24 hours of reaching a intermediate peak of $1974 on Thursday morning. Our PM portfolio nevertheless will remain at least 50% of total. The long term picture on risk weight remains positive for Gold and in uptrends. Daily is down but has not yet reached a reading of negative divergence. The present cycle uptrend which started on Jan 28 is still in play. Present gold weakness, if still on when Monday markets open, is a reason to switch more to Gold insurance. Logically, the gold market is more likely to open (much) higher on Monday, whilst Russia only has one counterparty left to trade Gold.
Gold/USD risk position relative to
Quarterly, Monthly, Weekly and Daily risk weight data.
(Previous update in brackets)
|Au Trend||↑ (↑)||↓ (↑)||↑ (↓)|
|Au % Risk
|64 (50)||60 (73)||40 (74)|
Portfolio allocation 50% (40%)