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Metals – Copper, Silver, Gold

Posted by nexvucapital on December 1, 2012

This weekend I wanted to present the weekly charts for copper, silver and gold. The similarities are striking. It is important that we understand where we are in the cycle. The seeds of growth are beginning to appear in the global economy after an interlude of fear: Euro meltdown, US pending recession, China hard landing, Fiscal Bluff…I can go on. Psychology is what makes markets and the overwhelming mood has been absolute pessimism with brief interludes of panic for several years – interesting fact that markets in the US have risen on this “wall of worry”. Maintaining a consistent state of “fight or flight” is tiring!!! Other than the Lehman once-in-a-lifetime capitulation event in 2008-09 the prognosticators of doom have been crying wolf without for a while now. Sure, there are issues to be dealt with but none of these is acute (the Fiscal Bluff will be dealt with despite the ongoing political paralysis in Washington – these folks do not want to wear that one).

So what are the seeds: rising home prices in the US (fundamental to the wealth effect confidence of the average middle-class American). The US economy is growing (that’s right its growing). China has bottomed and seems to be turning up. Japan is reporting some better numbers. Europe is even having its moments. See a trend!!!

So where is all that printed money hiding: Cash, T-Bills, Defensive Stocks, Gold. And, what if that money starts to move from fear/safety to growth. What if the consumer feeling a little better spends. What if the CFO feeling a little better spends. What if the Central Banks of the world have temporarily halted massive systemic Deflation through massive Inflation. What if the global GDP surprises. Question for all: if the world is headed for depression, why is oil at almost $90. Why is copper at $3.63. These are the commodities of growth. Enough said…

The Weekly Copper Chart…broke the down trend and has tested and held…look for the resistance at $3.84 and if this breaks – $4.00.

Weekly Copper Chart

The Weekly Silver Chart…look familiar…I like silver at this point better than gold due to its industrial properties.

Silver Weekly - November 30 2012

The Weekly Gold Chart…sorry this is getting redundant but again gold has a “flight to safety” quality so I prefer silver at this point.

Gold Weekly - November 30 2012


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