Gold 1715,385
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EURUSD 1,1957
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DJIA 32560
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OIL.WTI 65,715
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DAX 14552
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The stock markets are once again showing us new highs. Of course, buying such a market is a very risky thing to do. In fact, there is almost always a correction sooner or later from new highs. It is worth considering a few instruments that will not make you bite your nails in the next trading session.
Gold
First and foremost, gold is worth considering. We have noticed in past reviews that gold has lost quite a lot of ground since the beginning of the year and now looks the worst among commodity metals. But looking ahead, the current value could be quite attractive to buy. Inflationary expectations in the US, the next bailout packages in the US and the EU are seriously increasing the total money supply in the world economy. Sooner or later some of this money will flow into metal markets and since gold lags behind its peers in terms of growth and dynamics, buying it will become more attractive. Already we are seeing a slowing of the bearish trend and some semblance of a reversal at $1700/oz.
A second instrument that is perhaps underestimated is platinum. Platinum has been used as a safe haven metal on a par with gold for quite some time. Why consider buying platinum?
Firstly, platinum, like silver, is used in a wide range of industrial applications. It is an indispensable element in the automotive industry. Platinum is used in the manufacture of catalytic converters. It is logical to see that as the economy recovers, so will the production of cars with internal combustion engines. Hence the demand for platinum should increase. Platinum is also being used in the generation of clean energy, which is now gaining momentum.
Secondly, it so happened that gold and platinum were traded at parity. Now gold is one and a half times more expensive than platinum, which also gives a definite signal for a possible rise of the asset. If you look technically at the price levels of the platinum, it is worth noting a fairly dense range of variation of the daily price. This suggests that investors are trying to buy out almost all of the supply. They probably want to get on the train that will go up.
Of course, buying these metals will not be as profitable as investing in bitcoin, but at this stage, the risk/reward ratio of such deals looks pretty good.
What’s in store for us today?
08.00 UK Monthly Three Months GDP Change
11.00 EU Industrial Production in February
14.30 US PPI Producer Price Index for February
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.