PPMI Week In Review March 9th 2012

March 9,2012
“The following text is taken from Precious Metals International, LTD’s weekly memo titled “The Week in Review”.
The text is duplicated here as a courtesy to you, our customer, and is not intended as a solicitation to buy or sell. The
original memo can be viewed at pmilimited.com and a new one is released every Friday.

The Week in Review

1. Greece once again dominated news headlines this week as the deadline for its debt swap deal
with private bondholders approached on Thursday.
2. The data from the Bureau of Labor and Statistics’ February jobs report was mixed on Friday.
January’s job creation data was revised upwards and February’s data fell short of the newly
revised figure. Unemployment was held steady at 8.3 percent despite the labor participation
rate edging marginally higher. Many analysts thought that an increase in the labor participation
rate (the number of people actively seeking jobs) would cause an increase in the unemployment
rate when previously discouraged workers once again entered the search for jobs.
The positive data was tempered by comparisons with last year’s data during the same time
period. 2011 started off in similar fashion during January and February but tapered off as the
year wore on. Andrew Wilkinson, chief economist strategist at Miller Tabak, said “The problem
is, however, that there are few signs that the pace of growth is accelerating and while we
might be in for a series of decent reports like this, the February data is the bare minimum
necessary to help expedite recovery.”
3. The Wall Street Journal reported on Thursday that the US Federal Reserve may “sterilize”
further bond purchases, coining the term “sterilized QE”. The WSJ outlined the sterilization
procedure as meaning that if the Fed decides to buy more bonds, it could borrow back the
money it used to buy them for short periods of time at low interest rates. This would effectively
take the money out of circulation, thereby “sterilizing” it.
4. In Europe, Greece was the big news item for the week once again. The deadline for the private
debt swap deal that is such a key part of Greece receiving their next bailout payment
came and went on Thursday with the embroiled country seeing a participation rate in the deal
of 83.5 percent which was better than expected. Following a conference call with euro zone
finance ministers on Friday, Greece announced that it would be activating the Collective Action
Clauses on those bond holders who refused to participate, forcing them into the debt
swap. Fitch ratings agency cut Greece’s credit rating to “restricted default” on Friday as a
result of this week’s events. All three major ratings agencies now classify Greece in “default
5. According to CoreLogic’s home price index, US home prices fell for the 6th month in a row
in January. The real estate market continues to be hampered by a massive amount of distressed
properties flooding the market. As foreclosures that had previously been locked up in
court battles over the ”robo-signing” incident begin to move through the system again, we
may still see prices continue to decline.
6. According to the International Atomic Energy Agency, Iran has stepped up its uranium enrichment
efforts. In the latest quarterly report, the IAEA said “The agency continues to have
serious concerns regarding possible military dimensions to Iran’s nuclear program.”
7. Crude oil remained in the upper $100 a barrel this week, held there by a less than expected
increase in inventories, fears over Iran’s continued hostilities and uncertainty over the success
of Greece’s debt swap.
8. The euro spent much of the week declining against the dollar as the deadline for the Greek
debt swap loomed. Once the deadline was reached, the euro reversed course and began
climbing against the dollar. The yen was climbing weakly against the dollar most of the
week, but reversed course after the Greek deadline was reached.
Friday to Friday Close
March 2nd March 9th Net Change
Gold $1709.00 $1710.00 1.00 + 0.06%
Silver $ 34.50 $ 34.20 (0.30) – 0.87%
Platinum $1690.00 $1682.00 (8.00) – 0.47%
Palladium $ 710.00 $ 707.00 (3.00) – 0.42%
Dow Jones 12977.57 12918.50* (59.07) – 0.46%
Previous year Comparisons
Mar. 11th 2011 Mar. 9th 2012 Net Change
Gold $1422.00 $1710.00 288.00 + 20.25%

Silver $ 35.95 $ 34.20 (1.75) – 4.87%
Platinum $1780.00 $1682.00 (98.00) – 5.51%
Palladium $ 763.00 $ 707.00 (56.00) – 7.34%
Dow Jones 12044.40 12918.50* 874.10 + 7.26%
* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.
Gold Silver
Support 1680/1650/1600 33.50/33.00/32.50
Resistance 1720/1750/1780 34.50/35.00/35.75
Platinum Palladium
Support 1650/1610/1580 700/680/660
Resistance 1700/1740/1780 720/750/775

Volatility should be expected to continue. Everyone seems to be issuing a sigh of relief
over the outcome of Greece’s debt swap this week, but the situation there, and in fact in the Eurozone
as a whole, is far, far from over. Late Friday, the “determinations committee”, made up
of 15 members from large banks, hedge funds and investment firms, announced that Greece had
indeed experienced a “Credit Event” as a result of activating the Collective Action Clauses that
would force their remaining bondholders to accept the debt swap they proposed. The result is
that any Credit Default Swap policies, written essentially as insurance against the possibility of a
default, must now be paid out for a total of roughly $3.2 billion. Focus now shifts to Spain, Portugal
and Italy as these countries digest the fact that Greece effectively will not have to pay back
the full extent of its debts. Many fear that these countries, battling their own forced austerity
measures, may take the stance of “if they didn’t have to pay back their debts, why should I have
to pay mine?” leading to massive contagion among the debt laden nations of the Eurozone. In
Iran, a continued hostile stance towards nearly everyone in the region, and a refusal to slow
down their nuclear enrichment programs, may likely keep oil prices at their current high levels, if
not drive the prices even higher, for the foreseeable future. Sustained high oil prices will likely
lead to a sharp cutback in consumer spending, resurrecting fears that the economy may slip back
into recession. Following last week’s blatantly obvious manipulation of the precious metals
market, King World News interviewed their anonymous source, the “London Trader”, and asked
his opinion on the events taking place. Their source said “When silver took out $33, a huge
amount of physical orders were filled. The Chinese are doing the exact same thing in the silver
market that they are doing in the gold market; massive accumulation on dips. It is also important
to note that the local traders in silver are short and nervous. Everyone is short silver and so that
market can move violently higher when it turns.” China’s economy appears to be showing signs
of slowing further. Annual consumer inflation in China slowed to a 20 month low and factory
output growth was at levels not seen since 2009, all of which may point to additional monetary
easing by the Peoples Bank of China. Once again, we go into a weekend facing an announcement
out of Europe that took place late on a Friday that may affect markets at the open in Asia
Sunday night. Now more than ever it is important for you to pay attention to the news and analyze
the fundamentals that are driving the precious metals market today. If analysts are correct in
their assumptions, we may be nearing the point when the sheer demand for physical product outstrips
the big bullion banks’ abilities to manipulate the market. When that occurs, we may see
prices explode to the upside in a spectacular and violent fashion. Remember that precious metals
should be viewed as a long-term investment and that the key to profitability through the ownership
of physical precious metals is to actually own the physical products and to hold them for the
long term. Never overextend your ability to maintain ownership of your precious metals over the
long term.

Trading Department – Precious Metals International, Ltd.
This is not a solicitation to purchase or sell.
© 2012, Precious Metals International, Ltd.

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