Silver premiums approach historic high

Just a heads up for the silver stackers. The premiums are approaching the historic highs of 30%, so we should find a bottom soon.

Initial Jobless Claims Vs. Unemployment Rate

Initial Jobless Claims are a leading indicator for the Civilian Unemployment Rate.

Initial jobless claims report the number of individuals who have filed for unemployment insurance benefits in the previous week (mostly involuntary layoff). This gives us near real-time data on the state of the labor market. The blue chart leads the red chart with a 3 month delay.

LIBOR Vs. Jumbo CD

Typically, the certificate of deposit rates or CD rates follow the LIBOR rate.
But since 2015, something weird happened. The LIBOR rate moved higher along with the Fed Funds rate, but the CD rate stayed at around 0%.

This means that banks don’t want to pay out depositors, possibly to maximize their own profits. Also, another reason is that banks have too many deposits.

What happens when the CME gets involved

PPI Vs. CPI

The producer price index (PPI) measures the prices of output from producers. The PPI is a leading indicator for the consumer price index (CPI). As producers see their output costs go up, they will pass these costs on to the consumer.

Platinum is a buy

When we look at the platinum supply and demand, things are getting worse for platinum. The automotive demand has been going down sharply and we are in platinum surplus now.

But the price of platinum is now at $800/ounce, which means that a lot of producers are having losses. Lonmin and Impala are going to go bankrupt in a year from now. That means that we will see around 2 million ounces less production, which will put the supply and demand balance back into deficit. Platinum price will need to go up.

Moreover, there is one interesting development. Fuel cell cars are going to hit the market in the coming years and they need platinum. So I see platinum demand to go back up due to fuel cell cars in the coming decade. But this depends on market penetration, if the industry decides fuel cell cars are not the future, then the outlook for platinum will be dire.

Conclusion, it is a good time to get into the physical platinum market. Go buy a platinum ETF.

Gold Forecaster Index

I created my own “Gold Forecaster” index.

The red line comprises all metrics that are bullish gold and looks at their change in sentiment. The blue line is the gold price.

Whenever the red line is above zero, the gold price will go up with a delay of 1 year.

This is a real game changer in the world of precious metals.

The chart below is the same index, but the CPI has been replaced by the PPI: