This week saw the yellow metal record a 3.3% rise, its biggest weekly gain since July 2006.

 

Growing speculation that the Fed will drop borrowing costs by a quarter point 4.25% in December, another bad week for the greenback and oil teetering just below $100 a barrel were the drivers.

 

Last week saw the beginning of our anticipated pullback in price and we eagerly looked forward to adding to our holdings with buy orders in at $760 an ounce, just above the resistance level if $785 had been breached.

 

Churlish to sound disappointed as we are showing excellent profits, but it now looks as if we will have to do a serious tactical re-evaluation of entry points as the market looks like steaming ahead.

 

Silver had yet another good week and we are tempted to keep with our position in gold and look to put our available cash into the white metal and its derivatives when the next pullback takes place.

 

One thing for sure, this is a time when we will not deviate from the old market adages of “buy the dips, sell the peaks” and “the trend is your friend” as far as the precious metal markets go.

 

The whipsawing and apparently random movements in the US stock markets look very dangerous indeed.

 

Even specialist short term speculators can be severely burnt when the markets can turn so rapidly on sentiment alone, as evidenced during the week.

 

If you are hooked on speculating then picking a form horse looks an easier and safer bet than any Dow component.

 

Keep a weather eye open for the mining majors. As mentioned on previous occasions the Philadelphia Gold and Silver Index is an excellent way to gain exposure to the mining sector and, as it represents a basket of companies, it has a safety in numbers element.

 

With the South African government introducing stricter safety measures and penalties, mine workers unions all over the world understandably demanding more money as the fruit of their labors add to the bottom lines of their employers, even the biggest miners can stumble.

 

Having said that bear in mind that historically the share price of precious metal producers has outpaced the rise in the metals price in percentage terms.

 

As the precious metals market outlook looks highly promising then expect some even greater bonanzas from the mining sector. Just get the picks right!

 

As always the opinions expressed here are given in good faith and should not be construed as recommendations to buy or sell.

 

We hope that they will be thought provoking and encourage our visitors to investigate the precious metals market in depth and draw their own conclusions.

“Bon chance” with your investing.

 

 

 

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