02 April 2013

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

"Oh what a tangled web we weave,
When first we practise to deceive."

Sir Walter Scott, Marmion

Thin premiums on another 'record day' for stocks.

I bought volatility when the SP 500 June Futures tagged 1568 intraday.  As you know volatility is just another name for uncertainty.

That is close enough to my intermediate target of 1570 to have a go at it. We may get back up there for a couple more tests.

I think the hit on the metals today was rather heavy-handed and obvious. The Gold/Silver ratio is approaching an extreme.

Remember that Non-Farm Payrolls is on Friday.  I was therefore expecting a hit on the metals, and here it is.  It may not be over. 

The COT seems to indicate that this is in the hands of the hedge funds and momentum funds in addition to the usual suspects.  They tend to move quickly when there is a turn.

As you may recall I tend to take a long view of the precious metals bull market as the progress of the ongoing currency war which will result in the establishment of a new global currency regime to replace what we have called 'Bretton Woods II' based on the fiat US dollar.

I believe gold will play a role in this, and probably silver as well, if not in a formal way, then as a modifier or a 'hedge.'

Respect your timeframes and your ability to endure risk, because there will be risk aplenty no matter what you may do.
It is probably better to leave leverage to the professionals.