Uncommon Wisdom Daily Blog

HoweStreet Interview on Junior Miners, Gold, the US Dollar and More

by Sean Brodrick on February 3, 2012

I talked to Phil at HoweStreet.com yesterday, about 5 things to look for in junior miners, Pan American Silver’s (PAAS: 24.02 -0.01 -0.04%) acquisition of Minefinders (MFN: 14.91 +0.07 +0.47%) and what it portends for the industry, and the terrible, no-good, very bad outlook for the U.S dollar. Here’s the link: http://talkdigitalnetwork.com/2012/02/mining-the-miners/.

And here’s a link to the my video that I mention: http://www.uncommonwisdomdaily.com/5-things-to-look-for-in-a-junior-miner-13668.

And here’s an updated chart of the U.S. Dollar …

And here’s an updated chart of gold …

Looking at the chart of gold, you can see that it has touched that first level of resistance that I put on the chart. It could take some time to work through this. The forces that could cause gold to pull back here are the same forces that could put some support under the U.S. dollar, because gold and the dollar sit at the opposite ends of the see-saw of pain.

Still, the big trend is in place. I’m playing that trend. Good luck and good trades.

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US Dollar Is Slip-Sliding Away

by Sean Brodrick on February 1, 2012

Boy, the chart of the U.S. Dollar Index is looking nasty. Every time it tries to find a toehold of footing, it slides lower, and lower. Take a look at a recent chart …

Yesterday was touted as a potential “bullish reversal” in the US dollar index, but today’s action says “no way.” You can see that there are two levels of support for the U.S. dollar index, and it could test both of them in fairly short order.

The dollar is down today because the euro is up, rising against the dollar for the first time in three days as a purchasing managers’ index of manufacturing output in the region beat analysts’ estimates, adding to signs that the economy in Europe is stabilizing. In Germany, the output gauge reached the highest level in six months.

Meanwhile, manufacturing in China and the U.K. also rose. This lowers the demand for a safe haven, so that weighs on the dollar.

We’ll get U.S. manufacturing numbers for January today. Maybe if the ISM number beats expectations (55) we’ll see the dollar rise.

If not – if the U.S. dollar continues its slide, what do you think that will do to gold? What do you think renewed signs of economic growth in Europe and China will do for the price of silver?

Good luck and good trades.

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Rare earth prices soar

by Tony Sagami on February 1, 2012

What’s the hottest commodity to invest in? Rare earth metals prices are on fire. Ytterbium, one of the 17 elements known as rare earths, has surged more than 1,000% since 2009 and is up by 300% since January 2011.

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WTO rules against China rare earth export limits

by Tony Sagami on February 1, 2012

The World Trade Organization has ruled that China’s policy to limit rare earth metals exports has violated international trade rules.

This ruling really emphasizes how crucial rare earth metals are to the world and how desperate non-Chinese countries are to secure access to these key resources.

“China now must comply by removing these export restrictions swiftly and furthermore, I expect China to bring its overall export regime – including for rare earths – in line with WTO rules.”

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China, India manufacturing roaring

by Tony Sagami on February 1, 2012

Despite the problems in Europe and slowdown in exports to the Eurozone, the manufacturing industry in both China and India is thriving. What the China naysayers fail to understand is the booming domestic consumption driving the Chinese economy.

In China, the official purchasing managers’ index, an important gauge of factory growth, rose to 50.5 in January from 50.3 a month earlier. In remaining above 50, the PMI indicated an expansion in industrial activity that confounded forecasts for a decline.

India’s manufacturing sector grew at its fastest pace in eight months as factory output surged the most on record on increased domestic and foreign demand. The HSBC manufacturing PMI, compiled by Markit, jumped to 57.5 from 54.2 in December.

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Cash for clunkers….Japanese style

by Tony Sagami on February 1, 2012

The Japanese government has instituted a tax subsidy for new car buyers and it has worked wonders to jump start the Japanese auto industry.

Japanese automobile sales rocketed more than 40 percent in January after the government restored subsidies for eco-friendly vehicles.

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Latest Interview on Al Korelin’s Radio Show — gold ETFs and Silver surge

by Sean Brodrick on January 31, 2012

Here’s my latest interview. Al Korelin called to chat about gold ETFs, and my outlook for silver.

http://www.kereport.com/2012/01/31/tax-advice-discuss-big-es-question-etfs-collectibles/#comments

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Let’s Talk About Silver

by Sean Brodrick on January 31, 2012

I’m bullish on gold, which you know if you saw my presentation from the Vancouver Resource Investment Conference, a presentation I sent to paying subscribers on Monday of last week. But we can’t ignore silver, either. Indeed, there is plenty to be bullish about.

Look at this chart of the iShares Silver Trust (SLV: 32.69 -0.67 -2.01%) divided by the SPDR Gold Trust (GLD: 167.64 -3.41 -1.99%) …

(Updated chart)

You can see that silver underperformed gold for a long time. But that underperformance ended earlier this month. That’s just what we want to see in a bull market for the precious metals – silver, which often trades like gold on steroids, should be leading gold higher.

To be sure, silver still has some overhead resistance to work through (as does gold). Silver won’t be in the clear until it gets above $35.70. But I’m turning more bullish on silver as well as gold now. I think it’s going to have a great 2012.

And I’m not the only one saying so. Here are some articles from around the web that are well worth reading …

1. From GoldCore, Silver surged 21% in January, yet most analysts remain bearish.

2. Industrial demand for silver is surging, and whittling away at supply. Manufacturers will use 15,415 metric tons, 2.5 percent more than in 2011 and reducing the glut by 41% to 3,297 tons. One thing silver is used in is solar panels, now powering about 20 million homes. Silver Powering 20 Million Homes as Supply Surplus Subsides

3. Silver coin sales are soaring. Here’s an interesting factoid:

At Dillon Gage Metals, a leading U.S. precious metals dealer, dollar sales of silver and gold products reached parity in January for the first time in its history – even though bullion costs 50 times more. Some hedge funds are now interested in silver coins

Read more about this trend in Silver Coin Sales Hit Record Pace

4. Someone needs an editor – Steve St. Angelo has enough good ideas in this article for three stories. Check it out for his great charts on silver (he has interesting charts on gold, too). The Coming Paradigm Shift in Silver

In other news …

Three more stories you might want to read this morning …

Many analysts have pointed to the plunge in the Baltic Dry Index as a sign that the global economy is headed for a hard landing. It turns out to be lackluster rise in demand compounded by a glut in supply (too many new ships)
The S&P 500 is trading at a steep discount, unless you think the profit forecasts are a bunch of BS.
And if you’re trying to wade through the waist-deep BS we encounter in the media nowadays, this story is for you.

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