PPMI Week In Review

MARCH 23,, 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.
March 23, 2012
The Week in Review
1. What a week! Stock markets and precious metals markets both took a beating this week, apparently
solely on headlines, fear and emotion. This appears to be just another buying opportunity
in precious metals and many noted analysts and investors have publicly stated that they
are doing just that.
2. Initial claims for unemployment fell to their lowest level since February of 2008 according to
a report from the Labor Department on Thursday. The enthusiasm over what appears to be a
recovering jobs market was somewhat dampened this week by news of economic contraction
in China for the fifth straight month. A “hard landing” in China and sustained high oil prices
may create pressures on the US’ own fledgling recovery and send employers scrambling to
cut costs once again.
3. The Bank of England’s Financial Policy Committee, a newly created risk assessment committee
for the central bank, said “the committee remained concerned that capital was not yet
at levels that would ensure resilience in the face of prospective risks. It therefore advised
banks to raise external capital as early as feasible”. On Wednesday, the BoE raised its inflation
forecast for the next two years to 1.8 percent, higher than economists’ expectations and
leading some to speculate that additional quantitative easing stimulus may not be an option
for the Central Bank in the near future.
4. The honeymoon appears to be coming to an end in the Eurozone less than a month after the
much publicized Greek debt swap deal. Bond yields are beginning to rise again in Spain and
Italy, with Spain appearing to be in the worst shape. William Buiter, chief economist at Citi,
said in an interview with CNBC “There will be a further restructuring of Greece and Portugal,
Ireland is at risk, and Spain has been deteriorating spectacularly in the recent past in
terms of its public finances. There’s still far too little sense of urgency, and the facilities that
are available at the moment are not really adequate if Spain becomes a troika program country.”
5. Housing data was mixed this week. KB Homes quarterly report showed that the company
experienced an unexpected loss and the housing data reflected in their report was just miserable.
In the market as a whole, overall sales of new homes were unexpectedly down in February,
but home prices increased to their highest levels in eight months. Until the glut of
foreclosed and distressed properties works its way through the market, housing data will continue
to be suspect.
6. China was this week’s news mover with a fifth consecutive monthly decline in its factory activity.
Analysts have been projecting a slowdown in China’s economy since last year but
many had stated that they expected it would be a “soft landing”, or a gradual easing of
China’s economy. The latest figures now have those same analysts saying there may be a
“hard landing” underway and that China’s economy may drastically contract in the coming
7. Crude oil continued its run in the upper $100 a barrel range. Continuing tensions between
Iran and the rest of the world over its nuclear ambitions appear likely to maintain pressure
that may keep oil prices above $100 for an extended period. As economic sanctions imposed
by the US and designed to pressure Iran’s oil sales take effect, there may yet be even more
upward pressure on oil prices.
8. The euro moved higher against the dollar much of this week but reversed direction by the end
of the week apparently over concerns about rising bond yields in Spain and Italy. The Japanese
yen continued its decline against the dollar for most of this week, but appears to be ending
the week essentially sideways.
Friday to Friday Close
March 16th March 23rd Net Change
Gold $1655.00 $1662.00 7.00 + 0.42%
Silver $ 37.05 $ 32.25 (0.35) – 1.07%
Platinum $1745.00 $1625.00 (50.00) – 2.99%
Palladium $ 700.00 $ 656.00 (44.00) – 6.29%
Dow Jones 13232.62 13040.77* (191.85) – 1.45%

Previous year Comparisons
Mar. 25th 2011 Mar. 23rd 2012 Net Change
Gold $1426.00 $1662.00 236.00 + 16.55%
Silver $ 35.06 $ 32.25 (2.81) – 8.01%
Platinum $1723.00 $1625.00 (98.00) – 5.69%
Palladium $ 747.00 $ 656.00 (91.00) – 12.18%
Dow Jones 12220.59 13040.77* 820.18 + 6.71%
* Current at time of writing

Here are your Short Term Support and Resistance Levels for the upcoming week.
Gold Silver
Support 1640/1625/1600 31.80/31.40/31.00
Resistance 1680/1700/1725 32.50/33.00/34.00
Platinum Palladium
Support 1600/1580/1550 650/620/600
Resistance 1650/1700/1740 680/700/730

Volatility should be expected to continue and may even increase. It is important during
the next few weeks and months to be agile and ready to move when buying opportunities such as
the one experienced this week present themselves. The price manipulations that have been occurring
in the precious metals markets are now being discussed, publicly and openly, by those
that once scoffed at it and relegated it to conspiracy theorists. The obvious manipulative events
that have been occurring with what seems to be an increasing air of desperation make it difficult
for even the staunchest of naysayers to deny that it is happening and still remain credible. John
Embry, Chief Investment Strategist at Sprott Asset Management, said in an interview with King
World News this week, regarding this week’s price action in precious metals, “I wouldn’t worry
about it; I think you’re talking $50 to the downside on gold and thousands of dollars to the upside.
These guys [manipulators] are really working on it relentlessly, which suggests to me there
are more problems behind the scene than even I imagine.” Mr. Embry continued, saying “This is
just a wonderful opportunity to acquire physical metal and I suspect the Eastern central banks
and the wise people are doing exactly that. If we’re not at a bottom, we’re very close to it. The
sentiment is dismal and you can particularly see that in the [gold] stocks which are almost tragic.
I’m shocked quite frankly at the valuations and how low they are. In the fullness of time, this
will be seen as one of the great buying opportunities of all-time.” When asked about silver, Mr.
Embry said “Nothing has changed. The supply/demand is powerful.” Mr. Embry continued,
saying “The only thing you’ve got to focus on is the amount of physical silver that’s available in
the world and the demand for it. The demand for it is overwhelming. Eventually this is going to
take out these paper shenanigans which have kept the price under wraps to date.” The economic
slowdown in China, if it is indeed a “hard landing”, may add massive headwinds to the economic
recovery that seems to have been getting under way in the US. Add sustained high oil prices to
the mix and not only will consumers be forced to cut back further on their spending, producers
and manufacturers will be forced to begin cutting costs again to remain profitable. The logical
place for those corporations to begin cutting would be scaling back on their labor force again.

The Eurozone economy is showing signs of contraction as well, which does not bode well for
those countries that have been forced to implement crippling austerity measures to try to bring
their sovereign debt under control. No amount of austerity in those debt laden nations will help
bring their debt down if their economies continue to contract while they continue to rack up additional
debt in the forms of bailout loans. Wise investors appeared to be taking advantage of the
buying opportunity presented this week to acquire additional precious metals. Jim Rogers, a near
legendary investor, told CNBC’s Fast Money anchor Melissa Lee this week: “At $1,600, gold
would be a buy.” Rogers said he would continue to accumulate even if the metal went lower,
saying “Gold is going to go much higher – and silver – over the next decade.” If gold and silver
behave as these analysts all expect, now may be a perfect time to purchase additional product in
preparation for what may potentially be record setting price moves. 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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