Summary views

Looking at the uptrend in PMs it appears that there are certainly profits to be taken on current bullion values. Although all PMs slid marginally south tonight, silver is maintaining +33 levels. It is a 4-week uptrend with highs expressed 3 days concurrently.

Chinese mainland markets are still closed and this has taken some volatility out of this market. It is a fair indication how many 'mainlanders' must be day-trading bullion. With bullion we might just get one more bite at the cherry today. Nevertheless, even with profit taking today, as long as we don't see too much being withdrawn to trigger stop-losses like a pack of cards, the now freshly reaffirmed 'safe haven' status, should see inflows back in for the weekend. I would like to anticipate profit taking in the next swing today and tonight but rapid inflows to see new highs attained tonight - China Standard Time.(CST) We might see some crazy action today/tonight as word gets around and more players come in for a bite at the cherry. ASX is online and some profit taking is occurring but inflows are still appearing as well. We might also factor in the round of meetings this week that possibly drew some big players to the sidelines. Additional monies may find the way to these markets and maintain gold above 1700 and silver beyond 34 levels.

On the RSI it certainly is appearing overbought in PMs. On the ICBC charts yesterday silver put in a mammoth 5% increase and is yet unimpacted by significant profit taking pressure. It appears that there are still fewer big commercial players in this trend than recent uptrends throughout 2011.

When the 'big manipulators' were binding the market it was more common to see the big spikes triggering stop losses and shaking the nuts from the tree. That scenario is all but gone from this current trend it appears. As we know investors and traders are more savvy now and some class action against the likes of JPM and HSBC has possibly 'killed the chicken to scare the monkey.' I recall reading commentaries which stated that this 'more serene' trading action would occur and would result in PMs being given more reign to trade freely, at least less encumbered by the chief manipulators at least.

One of the principle tools they used in manipulation late 2011 was the 'futures' contract margin hikes. As I have stated, don't discount margin hikes again to stymy this market again. At least when Shanghai Gold Exchange increases margins it forewarns players which was not the case with COMEX/CME group.

Speaking of manipulators of the 'good' kind. The last round of low-lows was called by Jim Willie as a group of 'good guys' who were calling for huge volumes of gold to be purchased at 1600. Could it be that the shortage created around London, the current uptrend, and the current momentum is part and parcel of filling of those orders. I recall that once the orders were filled the price of gold would be let free to float above 1900 where other players had agreed to pick up the tab at 1900/oz. It was a very complex scheme but one that still could be in play.

Then there is the Sprott factor.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/25_Er...

Gold is currency - enter the Iranian oil saga and possible payments using gold. The FOMC statement saw gold break the wedge that was depicted by various chart technicians for some time now. The technicals are indicating fresh bulls at present and Sprott believes the upside should see fireworks.

Finally, the most important play in my books is the 349million dollar order for silver(PSLV). I am not sure if this has been fully factored in to the market. Nevertheless, silver kicked off this rally in the lead but is not currently leading.

Nadler of Kitco is downplaying the whole move in bullion again as being of no use. His crap views are being dribbled all over his posts to the tune that investors are reacting impulsively when they should be selling bullion by the truckload. Yeah sure! He has stated to the effect that the Fed's action to control 'inflation rates' to 2% is the main factor here. There are other monkeys out there saying similar things. Just when should we begin to trust the action of 'money lenders' that have no open and accountable system to congress over and above some form of physical hedge against inflation! With Sprott, he insinuates the Fed's action as unrestrained printing. I totally agree - 'QE Perpetual' as Jim Willie has called it. they will need to borrow a lot of printed FIAT to suffice jobs growth, housing industry growth, wars and peacekeeping, space exploration, Obama's salary etc.

Lets look at a summary of what occurs when a rally breaks. Good on this guy for having the guts to put his reputation on the line but ... this is not my view!

I Stand By $140 Silver In 2012
By Hubert Moolman
http://www.kitco.com/ind/Moolman/jan262012.html

I hope he is right but I can't see it - can you? It is like the perpetual town crier every time a rally breaks. I learned a long time ago to take these calls with a pinch of salt!

I say lets break an all time 50 USD levels first, then consider 80. If we take 80, maybe 100 is possible. 140USD in 2012 - I would bet against that because if a renewed crisis occurs and it appears it will - doesn't that drag bullion down with it? Nevertheless, Moolman always says 'God bless' at the end - I hope God does bless us with 140 silver but expect everything else to cost a damn sight more as well. Inflated silver will result in inflated consumables - particularly electronics. In today's world that includes just about everything; from washing machines to kids toys and from automotives to batteries!

That has been my argument all along - parabolic silver is something most governments and manufacturing industries will despise. Gold on the other hand is less frequently used industrially. We should however never forget that both are still viable forms of currency and that factor works for them in the long term but not in the absolute immediate view.

There is only one factor in my mind that could drive silver beyond 100 this year - short supply. With Sprott charging mining companies to retain bullion instead of cash and with the Chinese cornering and targeting silver suppliers, anything is possible but unlikely. Sprott will reach some, and he has, but the Chinese are not about to drive silver sky high just yet. On the negative side working against short supply, is increased specific mining activity, a flood of bullion sold to investors that can find their way back in if a crisis occurs, and decreased industrial demand with a looming global recession.

These are just some of the factors that will limit a possible 100USD/oz in 2012.

Strong Dollar Advocates Make a Weak Case
http://www.bloomberg.com/news/2012-01-25/strong-dollar-advocates-make-a-...

The above article is a must read in my opinion. A strong dollar does not appear that favourable for traders. Thanks go to Jon Nadler of Kitco for highlighting this article. He is a good researcher, that's why I read him. Just his opinions get up gold bugs noses. Silver bugs like me want to blow him into obscurity on a hurricane sometimes.

In order to cap this post off: PLEASE READ the FOLLOWING

I am no expert but I respect the views of many analysts and Jordan Roy-Byrne is one of them.

"It may take a few months but common stocks are nearing an important peak. They won’t crash but they will act typical of what we see in the last third of a secular bear market. Doom and gloomers and extreme deflationists ignore the obvious reasons why stocks will begin a mild cyclical bear market and nothing of the sort of the previous two bear markets. At the same time, the precious metals sector is set to emerge from a major bottom and spend 2012 working its way towards the next major breakout that will serve as a catalyst for the beginnings of a bubble."

There is so much info in this industry it is easy to be tossed too and fro with opinions. No one person has all the answers. There are however experts in varying fields that can give us an overall perspective of the issues. I am only a sentimentalist that flies by the seat of my pants.

Happy days to all.
May you prosper in spirit, in body and in soul.
God bless 2012 for all earthly citizens.