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It's Time to Take Precious-Metal Profits

By Jeff Clark
Tuesday, April 14, 2009

It's just about time to take profits on platinum.
 
Back in January, we made the unpopular assertion that platinum would outperform gold this year. At the time, it seemed ludicrous – at least, that's what I heard from the many gold bugs who read our musings here in Growth Stock Wire.
 
After all, platinum is more of an industrial metal while gold is a a hedge against inflation. So with the economy in a recession and with the government running the currency printing presses around the clock, logic dictated gold should be the metal of choice.
 
Of course, I've never been a big fan of logic – especially as it applies to the financial markets – and we put our money on the shiny white metal instead. Since then, gold has basically marked time. It's trading about $20 higher than where it was on January 6. That's a gain of about 2.3%.
 
Platinum, on the other hand, is up $220 per ounce, about 22%.
 
While there are more gains ahead, and all of the metals will likely end the year higher than they are today, platinum is approaching an important resistance level. Traders should consider taking some profits off the table here.
 
Take a look at this chart...
 
 
Platinum closed yesterday at $1,195 per ounce, just a fraction beneath obvious resistance at $1,220. It has been a great run over the past three months, but the metal is unlikely to bust through resistance on its first attempt. So in the short term, platinum is due for a bit of a correction.
 
Traders can sell it here, with the idea of buying it back somewhere around $1,050.
 
Shares of E-Tracs UBS Long Platinum ETN (PTM) are up about 25% over the past three months. If you jumped into this trade when we first wrote about it, then perhaps now is a good time to enjoy the profits.
 
Best regards and good trading,
 
Jeff Clark




In The Daily Crux Recent Articles
Market Notes
RIMM up 58% this year... shares of the Blackberry maker hit a six-month high.
 
Bank of America is back in the double digits... stock crosses $10 per share for the first time in three months.
 
DeVry races its peers to the bottom... the secondary-education rally is toast.
 
Earnings today... CSX, Goldman Sachs, Intel, Johnson & Johnson.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%