Market Recap – Gold Continues to Power Upwards but the PGM’s Point Even Higher

 

From: Neptune Global Holdings – July 1, 2014

The precious metals continue to outperform in 2014 against a backdrop of negative commentary from the financial press at large and poor investor sentiment. This scenario has been a textbook setting in the eyes of contrarian investors.

Year-to-date gold has delivered an impressive gain of 9% and appears to have broken the agonizing two year consolidation in this ultimate store of wealth. Interestingly, despite gold’s grinding higher over the last six months, the spirit of many of the yellow metal’s most resolute believers appears to have been broken. Thus, this psychological indicator of an established bottom adds support to the technical charts that show gold confirming a low around $1,280 in December 2013. From this sub $1,300 level of support the next leg of the gold bull is expected to commence.

Adding even more punch to the overall gains in the precious metals complex have been the white metals; silver, platinum and palladium. Providing us with a bigger picture of the precious metals market is The PMC Index™ (Precious Metals Composite). This weighted measure of the precious metals market clocked a 10% gain year-to-date and continues to expand its lead over gold in the long term, as seen in the chart below. The greatest standout in this group both year-to-date and over the last several years has been palladium. This generally overlooked metal from an investment perspective has a host of fundamentals supporting its price, including increasing industrial uses, scarcity, geopolitical concerns, and labor strife in South Africa.

Neptune Global PMC vs Gold Dec08 thru June14 with Grid Lines JPEG

Moving forward, many of the most astute analysts with a precious metals and macroeconomic discipline believe 2014 will be the breakout year for gold and the precious metals. Of course the threat of a near term knock down in gold and silver is always a looming threat. But the duration of such a negative, and possibly contrived, event is generally expected to be short in duration.

The greater threat not understood by most individual investors is the probable lack of supply of physical metals for investment once the big breakout commences. At such a time the masses will rush to jump aboard in their usual fashion. Such an event will be triggered by the next global financial crisis which will be punctuated by an accelerating collapse of confidence in the US Dollar. Countless global situations have developed which are capable of setting-off the this financial avalanche predicted by many analysts and the body of evidence points to a macro meltdown occurring before the close of 2015.

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Neptune Global Holdings LLC (NGH) is a precious metals dealer and as such does not deal with securities of any type.  This communication, and the NGH website, are for informational purposes only and as such are not a solicitation to sell or promote any security or investment.  NGH does not act as, nor offer the services of, an investment advisor.  Therefore, this message, and the NGH website, in no way purport to recommend any security or investment.