PPMI Week In Review

The Week in Review
1. It is a short trading this week due to a holiday for Good Friday this year. The US government
released March employment data on Friday, when markets were closed for a holiday, so markets
had no chance to react to the less than stellar report.
2. Initial claims for unemployment remained at their lowest levels since April of 2008 according
to a report from the Labor Department on Thursday. The media spin was that there was a
greater than expected decline, but the “decline” was mainly due to an upward revision of the
prior week’s figures.
3. The March employment data showed that the US only added 120,000 jobs in March, far less
than the 203,000 additions that economists had expected. The unemployment rate was adjusted
to a four year low of 8.2%, but that appears to have been due mainly to less participation
in the labor market as job seekers gave up the search for work.
4. The Federal Reserve released its March FOMC meeting minutes this week, and the language
contained in them sent gold and silver tumbling. While the Fed maintained its expectations
to keep interest rates low through 2014, the minutes noted that only a “couple of members”
believed further Quantitative Easing would be necessary. It should be noted that the minutes
did not specifically rule out further QE but did seem to contradict Chairman Bernanke’s
statements made just last week stressing that QE was still “on the table”. It appears that if
the Fed can keep everyone second guessing the likelihood of QE, then that just allows the
usual suspects to manipulate the prices of precious metals as they wish.
5. In European news this week, Spanish bond yields were climbing higher once again as fears
began escalating that Spain might need to restructure its sovereign debt just as Greece has
done. The International Monetary Fund announced that Portugal has “made good progress”
on its economic reforms and subsequently approved the release of another 5.2 billion euros in
bailout funds. The bank of England also announced this week that it would maintain interest
rates at ½ a percent and would not immediately increase its ongoing 325 billion pound Quantitative
Easing program.
6. In the US Housing sector, expectations continue that 2012 will see foreclosures ramp back
up, finally recovering from the “robo-signing” scandal of 2011. As Mark Seifert, executive
director of Empowering & strengthening Ohio’s People (an Ohio based counseling group)
told CNBC: “We are right back where we were two years ago. I would put money on 2012
being a bigger year for foreclosures than 2010. Last year was an anomaly, and not in a good
7. In Asia, a major Chinese ship insurer announced it will halt coverage for any tankers carrying
Iranian oil beginning in July. The move tightens the already strict financial sanctions imposed
against Iran by the US for continuing to pursue its apparent agenda to produce nuclear
weapons. An official with The China P&I Club, the insurer in question, told CNBC “Many
ship owners want to join our club and want our club to cover this risk, but considering all
these regulations from the United States and the EU, I know the China P&I club will not do
that. The China P&I club will not take the risk. We have asked our members not to go there,
if they go there, they take their own risk.”
8. Crude oil continued its run in the lower $100 a barrel range, held there by a larger than expected
jump in crude oil inventories. Continuing tensions between Iran and the rest of the
world are still expected to maintain upward pressure on the price of oil.
9. The euro took a nosedive against the dollar this week, sharply declining as news broke that
bond yields in Spain were rapidly rising, renewing fears that Spain would be next in line for a
bailout. The Japanese yen struggled higher against the dollar this week.

Friday to Friday Close
March 30th April 5th Net Change
Gold $1669.00 $1628.00 (41.00) – 2.46%
Silver $ 32.48 $ 31.75 (0.73) – 2.25%
Platinum $1636.00 $1595.00 (41.00) – 2.51%
Palladium $ 652.00 $ 643.00 (9.00) – 1.38%
Dow Jones 13212.04 13053.33* (158.71) – 1.20%

Previous year Comparisons
Apr. 7th 2011 Apr. 5th 2012 Net Change
Gold $1458.00 $1628.00 170.00 + 11.66%
Silver $ 39.55 $ 31.75 (7.80) – 19.72%
Platinum $1790.00 $1595.00 (195.00) – 10.89%
Palladium $ 780.00 $ 643.00 (137.00) – 17.56%
Dow Jones 12409.49 13053.33* 643.84 + 5.19%

Gold Silver
Support 1620/1600/1575 31.00/30.50/30.20
Resistance 1650/1680/1700 32.00/32.50/33.00
Platinum Palladium
Support 1590/1550/1525 630/600/580
Resistance 1625/1650/1680 675/700/715

Volatility should be expected to continue and may even increase. The machinations of
the US Federal Reserve appear to have been directly responsible for the drop across not only
precious metals, but stock markets as well this week. Jim Sinclair had this to say, in an interview
with King World News, about the attempts of central banks around the globe to keep gold prices
under their control: “The attempt to keep [the gold market] from moving higher creates by nature
a spring, a coil as it were, in markets. If the spirit of the gold market could have been broken,
it certainly would have been broken down at the $1,500 level. This thing is turning into a
spring, into a coil, and when it goes it’s going to be something to behold on the upside.” Mr.
Sinclair continued in the interview, saying “When you feel the worst, when you get to the point
where you say ‘I can’t take it anymore,’ toughen up. Everything that you are doing, you are doing
for good, right and logical reasons.” The sovereign debt situation in Europe continues unabated,
with Spain once again appearing to be on the edge of being next in line for a bailout.
Greece is now in a standoff with private bondholders who are refusing to participate in the debt
exchange that so many others agreed to last month. If these hold-out bond holders take this glorified
game of chicken to the point where Greece is forced to default on the bonds they hold, then
chaos may very well ensue across the Eurozone. Europe continues to be mired in recession and
awash in debt, China is feared to be witnessing a “hard landing” economic slowdown, central
banks around the world continue to print money in one fashion or another, and suddenly everyone
seems to be looking at the US economy as the next great recovery machine and now expect
that the Federal Reserve will suddenly stop printing money just because the media reported a

language change in the latest meeting minutes. As Bill Fleckenstein, President of Fleckenstein
Capital, told King World News in an interview this week, “So now the same people who missed
the stock bubble, the real estate bubble and every other problem that we’ve had, now once again
believe in Goldilocks. Even though the rest of the world is slowing down, somehow, magically,
it’s going to be great here. Although yesterday’s Fed minutes said they weren’t going to ease,
until they had to again, the metals markets were bombed, commodities markets were bombed
and now stocks are getting hit a little bit. So, stocks may throw a temper tantrum and tank, just
like they did last summer and the summer before that. Then, Bernanke will come in and save
them. Last time he did a ‘twist,’ and in the next couple of months he will come in with a new
kind of ‘twist.’ Basically the Fed is trapped. They have spoon fed the markets and the economy
to expect more confetti, and they will continue to do it until inflation takes the printing press
away.” The US employment data for March shows just how overblown the media spin of the US
“recovery” has been. The fundamentals that have been driving metal prices higher remain unchanged,
despite media spin to the contrary. Wise investors are viewing this latest price dip,
manufactured courtesy of the Federal Reserve, as just another buying opportunity to pick up additional
precious metals “on the cheap”. 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.

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