Quick Take: Palladium Leads Precious Metals
NEW YORK (TheStreet) -- Precious metals are higher Friday's session. TheStreet's Joe Deaux spoke to David Morgan, publisher of "The Silver Investor," about whether that will continue.
"One day doesn't make a market," Morgan said, who doesn't put a ton of emphasis into one knee-jerk reaction from the market. Instead, he mostly looks for outperformance based on double- or triple-percentage moves. For instance, if gold is up 0.5%, he wants to see silver up about 1.5% for at least a couple of days.
Based on this, he can establish a changing in the trend and then look to find his position.
Lately, that leader has been palladium. The white metal, along with platinum, is traded on much lower volume than either silver or gold and, according to Morgan, that makes it even better.Due to shortened supply from South Africa, the prices have been pushing higher, Morgan said. Although the larger breakout from the metal hasn't happened yet, this would be a key indicator for the group if it did. Seasonally, August tends to be the worst month for the metals group, he added, although the season hasn't played much of a role in the last couple years of price action. Of more significance, however, was the key reversal seen in silver prices on June 28. "It's called a key reversal for a reason," he said, noting that while many are calling for lower metal prices and sub-$1,000 gold, he thinks we may have already seen the bottom in the two metals. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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