Thursday, June 19, 2008


Platinum has broken out of its channel range and possibly going into what Goldman Sachs would term a "super cycle". Look for the metal to continue to outperform its peers, especially due to the supply concerns again.
There is recent article on the affects of Platinum price and US auto sales that I believe again misrepresents the dynamic forces moving prices.
The fact is that auto sales and growth aren't in the US. The growth continues to come from emerging markets, although it will come in the smaller, lower margined car markets, thus creating the demand for platinum, and all other commodites, no matter what the US is doing with it's auto, or any other purchasing in general. When these shifts change the first conclusion is most often the wrong conclusion, so with people focusing on the muddled US economy when looking at commodity pricing - most likely they are not seeing the true landscape, especially with what has happened to OIL despite the slow US economy. The rise of commodity prices is a byproduct of worldly demand-pull inflation, thereby creating rising prices for the US economy while were in the midst of major changes to our financial system. This also leads to stagflation as the credit woes deteriorate our wealth factors - but were not going to try and become economists, were just going to analyze the charts.
SWC - Stillwater mining will be a major beneficiary of any swings in price and with the last run at the beginning of the year, and after a consolidation, SWC has triggered a buy signal.

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