An Alternative Precious Metals Play

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The Rude Awakening Wednesday, March 6, 2013 | 0930 Hours An Alternative Precious Metals Play The story of an industrious precious metal... What happens when fundamentals and price align? Plus: The emotions of a new Dow record... Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Gold has dominated the precious metals headlines this year. You’ve watched the yellow metal’s shaky start to 2013. You’ve seen it fall from close to $1,800 back in September to below $1,600 today. Heck, a lot of this drama has played out on these pages — especially when I gave you advance notice of gold’s impending drop just before it shed $100 on its slide to the $1,550’s. But gold has settled after a couple of wild weeks. So for now, I want you to focus on another precious metal — one that has not received nearly enough attention lately. I’m talking about palladium... “Demand for palladium has been stagnant for over a year, but now is growing,” writes resource maven Byron King. “There’s not enough new palladium mine output (plus recycled metal) to meet the need.” The need Byron references here is catalytic converters. As automakers ramp up demand, palladium is a key material used in diesel engine catalytic converters. Add in the fact that diesel- powered vehicles are the fastest growing auto segment, and you have a very compelling argument for this industrious precious metal. It’s no surprise that palladium has broken free from gold over the past two months. After trading hand-in-hand for much of 2012, palladium has picked up the tempo — while gold has stumbled. The palladium to gold ratio has ticked steadily higher for more than four months as palladium prices jumped from a low near $600 in late 2012 to $735 today. While you wait for gold to tip its hand, betting on palladium is a strong option. Fundamentals and price are lining up in favor of a strong upside move... Rude Numbers Targets, Predictions and Wild Guesses 4 years have passed since the stock market found a bear market bottom in March 2009. Meanwhile, a market milestone emerged... 14,162 was eclipsed by the Dow Jones Industrial Average yesterday. The Dow set a new all-time intraday high of 14,286 and a new all- time closing high of 14,253. 1,539 was yesterday’s closing number for the S&P 500 — which is now also within spitting distance of all-time highs... $1,576 will buy you an ounce of gold this morning. After enduring four straight days of declines, the price appears to be leveling off in this range. 66% of all stocks trading on a US exchange are above their respective 50-day moving average. Rude Trends When to Buy... When to Sell “What does your crystal ball say?” writes a curious reader. “Are we in for another sell-off this year?” Hmmm... Unfortunately, I cannot see into the future. If I could, I promise I would tell you all about the markets over the next decade — and I might even give you the scoop on the iPhone 23. When analyzing price and trend, the only information anyone has access to is the past and the present. As you’ve found out countless times before, anything can happen in the markets. Sellers can always materialize out of nowhere due to some collective fear. That’s the herd mentality... Yesterday, the Dow hit new all-time highs. Some market watchers fear the milestone as an ominous sign. Others celebrate the achievement. Instead of joining either camp, I encourage you to take a step back and think. Now is an emotional time for the markets. If you keep a level head and mind the numbers, you’ll stay five steps ahead of everyone else. [Ed. Note: Follow me on Twitter: @GregGuenthner — E-mail me here: rude@agorafinancial.com] Ignore At Your Own Peril Today's Must-Read Links The Embarrassing FACT We Found on Page 210 of the White House Budget... The largest financial bubble in history may be about to pop... Addison Wiggin’s Exclusive Invitation to the ‘Round Table’ Additional articles and commentary from The Daily Reckoning on: DR iPhone APP To end The Daily Reckoning’s Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, cancel your free subscription here. Please Note: If you unsubscribe from The Rude Awakening, you will also be unsubscribed from The Daily Reckoning. If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by whitelisting the Daily Reckoning. Copyright 2013 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. 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