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ADEN
THE
FORECAST
MONEY • METALS • MARKETS
MARCH 2021 40th year
A BASKET OF QUESTIONS
This month we received quite a few e-mails. Your Meanwhile, we’ve seen the opposite in gold and the
kind comments are sincerely appreciated and so are gold universe, bonds and the dollar. They’ve been on
your questions. Following are some of the most fre- the down slope since the Summer, and the latest hit to
quently asked... new lows for the move is causing some doubts about
the bull market.
Q. Can you simply explain your primary strategy? But the bottom line is, the gold universe is the lone
A. In many ways, and keeping it simple, the markets ranger and the most undervalued for now. If you look
are similar to surfing. The ebbs and flows of the market at the wave, the ebb and flow of a market, you’d have
are very much like the waves in the ocean. My son is a
to say gold, silver, their shares and platinum are good
surfer and he has shown his young sons to surf as well.
buys now, over the short and the long term.
Watching them made me realize how similar it really is.
It’s the same story with the resource sector. We be-
If you time the market correctly, you’ll likely get a
long ride and take the wave to the end. This is like a lieve the resource sector rise is just beginning a longer
long-term trend. Your strategy and timing are key to a bull market run. And stocks have further to run too
successful trade and one of our main goals is to ride in this Melt Up move. So we’re riding these big waves
these long-term trends. until they’re over. They’ve been a little bumpy but
On the downside, if you catch the wave at the wrong they’re good and they have further to run.
time, you’ll likely get a wipe out, or at least a very bumpy
Q. Could you provide me with mathematical for-
ride. This is the same with the market.
mulas for each of your indicator tools?
We understand the ebbs and flows of the market.
A. Our indicators are proprietary indicators that
And we appreciate our indicators to help guide us to-
we’ve developed through trial and error, and fine tuning
wards a good buy area and a good sell area.
over the years. These are for our subscribers only and
The other key thing is to be clear if you are in for the
we hope you’ll understand why we keep these in-house.
intermediate move, or for the long term. This is what
people normally find hard to understand. If you’re in for Q. I don’t understand your reference to “D de-
the long-term, riding through some weakness is fine and cline.” Where can I find the definition and the
healthy. But the weakness could last several months. meaning?
When we see an intermediate rise forming, we’ll men- A. We have often explained these recurring interme-
tion it to our subscribers in case they diate cyclical movements in the gold
want to take some profits. Taking a INSIDE price, which we call A, B, C and D.
profit is never a bad decision, but in These are explained on our website,
a bull market you could get anxious U.S. & World Stock Markets..... 2 under Indicators and we hope that’ll
as to when to get back in. The ongoing bull
answer your question.
We’re in a similar situation today.
We’ve seen a stellar rise since the U.S. Interest Rates & Bonds ... 5 Q. Are you concerned that this D
Summer of last year, and especially Long rates: On the rise decline in gold has taken so long?
since last November in the stock mar- A. No. Obviously, we would’ve
ket, the resource sector, commodities Currencies....................................6 liked a shorter D decline, but this
in general, currencies, and interest USD: Still rebounding one has so far lasted seven months
rates. It’s been an “Everything rise” and based on timing, it fits in with
Metals & Natural Resources..... 8
with covid stimulus, uncertainty, the longer side of previous D declines.
debt, a weaker dollar and more. A super commodity bull market
But it has not been one of the big-
Copyright
March 12, Aden
2020 Research 1 March
Volume 12, 20213
40 Numbergest, based on percentage de- CHART The bottom line is, inter-
clines. And considering that est rates are not yet a real
gold rose 75% in two years, challenge for stocks. For
in 2018-2020, the current !" # $% "& now, it looks like long-term
decline has been moderate rates are going to decline in
when we put it in perspective.
the near term following their
Most important, gold
sharp rise in recent months.
remains in a bull market But looking out later this
and it’s headed higher. The year, we could see long-term
August high had none of the rates rise further, especially
characteristics of a major
if inflation picks up. And
peak.
if they do, that could hurt
Plus, if we compare the-
the stock market, which
base metals to precious
metals, you can see the ratio will probably be in a bubble
by then.
between the two has risen
We’ll see how this un-
sharply (see Chart 1). In ' ()*+' +
folds and it’s indeed some-
other words, the base met-
als have well outperformed thing we’re watching close-
ly. As we’ve often said, in-
the precious metals since
AdenOriginalChart
November. terest rates are not boring.
This tells us that the precious metals are lagging and They’re the most important market in the world. Why?
they’re due to soon catch up. They’re on the bargain Because, as we saw this month, they influence the other
table, oversold and poised to head higher. So whatever markets, so keep a close watch on what they’re doing.
you do, now is not the time to get discouraged. Keep
your eye on the big picture and stay on board. We Q. Can you explain the rationale and case for
think you’ll be glad you did. buying a stock when it’s first mentioned?
A. In nearly all cases, we buy stocks that we know,
Q. Are we to sell SLV? and we like the fundamentals. It’s also important that
A. No. We believe silver will be a top performer in its relative strength is good. That is, that it’s one of the
the upcoming metals rise and we recommend holding stronger stocks in its sector. We also want to see that
SLV, the silver ETF, and physical silver. the technicals are looking good.
This combination usually works well, but not always.
Q. Do you believe the rise in commodity prices
will be long lasting? Sometimes a stock that was strong will underperform
A. Yes. Commodities just rose at the fastest pace due to rotation in that sector, or due to an unforeseen
in 10 years. By all indications, it looks like they are circumstance, or because we might be too early or too late.
embarking on a major cyclical rise, which could last For the most part, however, the relative strength rule
for a few years. of going with the strongest stocks in the best sectors
tends to lead to better returns…
Q. When equity yields drop, as stock valuations As for stocks in general, if we want to ride the wave
increase, and long-term interest rates rise… there up with the general market, which has recently been
will come an inflection point when bonds deliver the the case, we’ll go with the index funds like DIA for the
same return as equities but are a safer haven. Are Dow Industrials, IYT for the Transportation Average
you monitoring this potential cross in yields and and so on, and that’s historically been a good way to
do you agree it will be a harbinger of an almighty profit.
downturn in equities?
A. Yes, we sure are. In fact, this past month ris- Q. I’m having trouble buying the ETF for the
ing long rates reached a level where they not only put Australian dollar. Any other sources?
downward pressure on stocks but on other markets too. A. Then we’d advise buying it outright. If you’re in
We have a chart in this month’s issue comparing the U.S., you can do this at tiaabank.com or call 1-800-
stocks and bonds (Chart 6). And we review the big 926-4922. Outside of the U.S., most banks usually of-
picture for rates in the current Interest Rate section. fer the availability of other currencies for your account.
Editors: Published monthly by Aden Research. Also includes access to a weekly update $250 per year (U.S. dollars only). Send all customer The Aden Forecast
Pamela Aden service or market related questions to Aden Research, Dept. SJO 874, P.O. Box 025331, Miami, Florida 33102-5331 or E-mail info@
Mary Anne Aden adenforecast.com Questions will be answered in future issues. Copyright Aden Research 2020. All rights reserved. The Editors
1-305-395-6141
In Costa Rica:
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March 12, 2021 2 Copyright Aden ResearchU.S. & WORLD STOCK MARKETS
The ongoing bull
The stock market is on the starting to perk up, stocks
CHART 2
rise again and several indexes could keep rising to new highs
are hitting new record highs. / 0 1 far longer than most people
After rising far and fast in re- / expect (see Chart 3).
cent months, the market took Plus, the Dow Industrials
a break but it didn’t last long. !"#$%&'()**!#$+,-. and the Dow Transportations
both hit record highs on March
THE MELT UP 10, reconfirming the bull mar-
As we’ve often noted, the ket remains intact, based on
stock market appears to be in Dow Theory.
its final leg up in this bull mar- But it is important to note
ket. This is also referred to as 23%$.-4,#$ that we are likely in the final
the Melt Up or the third phase 5,#67()**!#$+,-
stretch. And even though this
of a bull market. could last for several more
It’s when the market really months, or maybe even another
takes off and it’s usually more year, we have to stay cautious.
profitable than the earlier Yes, we want to take advan-
stages. That is, it’s a time when tage of this Melt Up and stay
the market is volatile, dramatic AdenOriginalChart with it for as long as it keeps
and speculative. going but we also want to get
In the late 1990s, for example, the famous dotcom out before the bubble bursts and the market comes
bubble took off. Tech stocks soared more than 100% crashing down.
in the last 12 months of that Melt Up (see Chart 2,
which shows the current bull market compared to the STAY CAUTIOUS
last two big bull markets). That’s the risk right now and for that reason we
Well respected economist Ed Yardeni recently noted think it’s best to put trailing stop losses on your stock
that the “Mother of all Melt Ups” is coming. He pointed positions. Keep the stocks you have but also keep a
out that the signs are everywhere, such as speculative 15% trailing stop.
froth, government policies, investor euphoria, day trad- On the upside, however, your gains would run.
ing, the booming IPO market and the big rise of retail Then when we begin to see signs of a top, using our
investors who have overtaken the role previously held leading indicators, the PTI and other indicators, we’ll
by hedge funds. recommend selling, even if it means missing out on
some of the froth.
New record highs Keep in mind, it is very difficult to get out right
So does this mean that the bull market is likely at the top of any market. If we’re close to the top,
near an end? however, that’ll be good enough and that’s what we’re
Not necessarily. With so much money creation and shooting for. If this does not go as expected, most
the new stimulus out there, along with the economy important is that we’re flexible and quick to change
CHART 3
DOW THEORY RECONFIRMATION
PRIMARY TREND DOW JONES DOW JONES NASDAQ RUSSELL 2000
INDEX (PTI) INDUSTRIAL TRANSPORTS COMPOSITE
AVERAGE AVERAGE
15 WEEK
AdenOriginalChart
MOVING AVERAGE
2020 21 2020 21 2020 21 2020 21 2020 21
Copyright Aden Research 3 March 12, 2021strategies, if need be. CHART 4 GLOBAL BULL
THE BIG PIC This is true of the interna-
*) + % tional stock markets as well
Looking closely at the
big picture of the S&P ' ' (see Chart 5).
500, for example, you’ll A
%&# When bull markets are
strong, they’ll take most of the
see that our indicators are
world stocks markets up with
reinforcing this scenario…
them, and that’s now taking
Note on Chart 4A, the ! place.
S&P 500 remains above ' The G7 markets, the
&
its moving average, sig- Americas and the resource
naling the major trend is #
) countries… they’ve all been
still up. participating, with some at
(
The leading (medium- record highs.
term) indicator is near !
B The weakness on Wall
the temporarily expen- Street temporarily affected
sive zone (see Chart 4B). these markets too and so have
# $# %
This tells us that stocks
inflation concerns. But the
could stall out while the bull markets remain intact
market cools off a bit, and that’s a good overall sign
but this is unlikely. for the global economy.
This was primarily due BUY AND HOLD
to higher interest rates.
%&# # ' # It’s also worth noting that
But since long-term inter-
when we compare stocks to
est rates have risen too bonds, you can see that stocks
far, too fast, they’re over- *-../01232 have risen, outperforming
extended and unlikely to C 2451
bonds and they have further
rise much further, at least to go (see Chart 6).
6' '
for the time being. , This situation could stay
Room for more this way for a while, but as
we’ll cover in this month’s
If so, that’ll give stocks ,
18289.0.1: Interest Rate section, bonds
the green light and that’s could soon head higher and
now happening. Our lead- when they do, interest rates
,
ing (long-term) indicator, 67 will decline. This would not
which is most important be unusual since bonds are
is also pointing to this , so bombed out.
! 7+ AdenOriginalChart
outcome. Meanwhile, we advise stay-
! "
As you can see on Chart ing with stocks for now. Con-
4C, this indicator is rising tinue to buy and hold the
but it has not yet reached the major high level, which stocks we’ve been recommending on page 12, but
tends to coincide with important tops in the S&P 500. knowing we may not keep them for the long-term. The
In other words, this means stocks have room to stock symbols are IWM, PSJ, QQQ, DIA, IYT and WMT.
rise further and they’re not yet overbought. That is,
a further Melt Up rise is unfolding and you’ll want to CHART 6
be on board.
CHART 5
!"
!
AdenOriginalChart
AdenOriginalChart
March 12, 2021 4 Copyright Aden ResearchU.S. INTEREST RATES AND BONDS
LONG RATES: On the rise
Long-term interest rates literally CHART 7 is feeding inflation fears, and with
soared this month. And this affected good reason…
most of the markets. INFLATION COMING?
BIG NEWS Producer prices, for instance,
The rise has been ongoing since just posted its biggest gain in nearly
last August with the 10 year yield 12 years. And remember, producer
nearly tripling since then, but it’s prices lead consumer prices, which
recently been gaining momentum. is considered the primary inflation
This has not gone unnoticed and it gauge. At the same time, import
was basically the big news in recent prices also surged.
weeks. These price rises have been pretty
The fact is that interest rates much across the board... energy
finally reached a level where it mat- prices are way up and so is copper.
tered. This put downward pressure Commodity prices are hitting eight-
on stocks, metals, currencies, hous- year highs and it looks like these
ing, and of course it sent bond prices trends are going to continue.
down sharply (see Chart 8). AdenOriginalChart So combined with the massive
Many market watchers were sur- money creation that’s been going on,
prised by the rise in interest rates. That’s because the these factors could surely trigger a big inflation.
Fed and Janet Yellen have been saying that interest Consider this…
rates are going to stay low for a long time and the Fed’s Since 2008, the Fed’s money creation has exceeded
going to keep buying U.S. government bonds to help GDP growth by 15 times.
pay for all of the ever-growing government expenses. Plus, it’s also important to note that the national
SHORT RATES STILL LOW debt rose three times faster under Bush than it did
under Clinton, it rose five times faster under Obama
This is true, but they were referring to short-term and 10 times faster under Trump. And now with the
interest rates. They have indeed stayed near 0% all massive $1.9 trillion stimulus package, these numbers
along and the Fed’s determined to keep them there for are going to grow ever larger.
a good while. As our old friend Terry Savage notes, regardless
CHART 8
But as we men- of the good intentions, that fresh money could be the
tioned last month, “tipping point” that reveals the Fed’s inability to control
A
long-term interest rates and keep them low.
rates are another
story. They are INGREDIENTS IN PLACE
not controlled by Taking this a step further, Michael Burry of “The
the Fed. For the Big Short” movie fame, points out that no one lis-
most part they’re tened to him last time when he warned of the housing
essentially a free collapse that
market and they’re triggered the CHART 9
singing a different financial cri-
tune (see Chart 7). sis of 2008.
!"
T h e s e y i e l d s C u r r e n t l y ,
#$ %
B !"#!#$%&!' have been driven he’s warning
higher by too much that hyper-
supply and the co- i n f l a t i o n i s
vid vaccine rollout, coming.
which has fueled C o u l d
expectations that he be right?
economic growth Well, the in-
& ' ($)* +, !"
will pick up a lot gredients are & ' ($)* +,-- ,
of steam in the in place and
, -
second half of this even Fed head -- - . .-
AdenOriginalChart year. This in turn P o w e l l p r e - AdenOriginalChart
Copyright Aden Research 5 March 12, 2021dicted we could see higher prices this summer. the big rise in long-term interest rates is trying to tell us (see
So yes, it’s a possibility. Chart 9).
Remember, it happened in the late 1970s We’ll soon find out. But if so, then long-term interest rates
when the financial picture was far less intense are going to rise a lot higher, along with the gold price, while the
than it is now. And since interest rates and dollar and bond prices fall sharply.
bonds tend to look ahead, this may be what Taking a look at Chart 10, it illustrates the current interest
rate picture… Here you’ll see the 30 year yield, together with
CHART 10 its medium and long-term leading indicators.
6 Note, the medium-term indicator is now way overextended.
12"3 234 " 5
This means yields have risen too far, too fast and they’re now
A due for a breather decline. This would be normal following their
steep rise.
The long term indicator, however, is on the rise and it’s turn-
ing bullish.
This tells us that once rates settle down, they could indeed
head higher in a few months. And if they do, it might end up
!"#
"$ $ becoming the start of a new mega uptrend, which may reverse
the downtrend that’s been in force for the past 40 years.
AVOID BONDS FOR NOW
B
%& '(%) * ++%& For now, however, the economy is still plodding along all over
the world. In the U.K. for example, they’ve been suffering their
.
,$ - biggest slump in 300 years, thanks to covid lockdowns. And
all of the major countries are following the U.S.’s lead as far as
ballooning their balance sheets (see Chart 11).
It’s an international phenomenon, and the IMF is warning it’s
not going to end well.
This is something we’ll be watching closely because the out-
come is going to be very CHART 11
C important, personally 9.0 9.0
7 %*8% ++ 9+ + and investment wise. 8.5 (trillion dollars, nsa)
MAJOR CENTRAL BANKS: TOTAL ASSETS
8.5
In the meantime, 7.5
8.0 8.0
7.5
,## continue to avoid all 6.5 7.0 Fed (Feb=7.6)
ECB (Jan=8.6)
7.0
6.5
bonds. That goes for 6.0 BOJ (Jan=6.8)
6.0
PBOC (Jan=6.0)
Treasuries, foreign 5.5 5.0
5.5
5.0
bonds, corporate and 4.5 4.5
junk bonds. 4.0
3.5
4.0
3.5
Since they all gen- 3.0 3.0
2.5 2.5
erally move together, 2.0 2.0
,0
they’re all vulnerable 1.5 1.0
1.5
1.0
AdenOriginalChart
and high risk. So stay 0.5
07 09 11 13 15 17 19 21
0.5
22
. ! / . ! / on the sidelines. SOURCE: Haver Analytics COURTESY: yardeni.com
CURRENCIES
U.S. dollar: Still rebounding
The U.S. dollar rebounded this month, hitting a 3½ historical relationship between the U.S. dollar and the
month high. 10 year yield because it provides some insight. So
The main reason why was the expectation for bear with us…
faster U.S. growth now that vaccines have become DOLLAR AND INTEREST RATES
widespread. Inflation is also anticipated and that too
boosted that dollar, along with higher interest rates. Many say with interest rates rising it’ll give the dol-
But as we mentioned last month, the dollar was due lar an upward boost. This is true sometimes, but not
for a rebound rise following its steep decline over the necessarily always (see Chart 12).
past year. This is not unusual, but the dollar’s major First, note that once the U.S. dollar trend is in place,
trend is still down, signaling the dollar will again fall it stays in that trend for several years. Each of these
further once this upward rebound is over. dollar trends are marked by a vertical line and the main
This month we wanted to show you a rather detailed dollar peaks are in blue, in 1985, 2001 and 2020.
March 12, 2021 6 Copyright Aden ResearchThe red titles tell you which CHART 12
market was HOT during each
dollar trend. At the same %""
time, note how the 10 yy was
cascading down.
In 1980-85 the dollar "
soared while the 10 yy was
#$
yielding double digits. These #"
were the years following a stel-
lar gold rise and high inflation.
The next 16 years had a
stock market boom with a fall-
ing dollar and a falling yield.
The first 10 years (1985-1995)
saw a clear collapse in the dol-
lar and the yield fell from 10%
to 5%. Both of these declines
were a great environment for
a strong stock market. ""
Then the dotcom boom
began for the next five years,
from 1995-2000. We don’t
have to tell you what a frenzy
this was, which caused a !
"
boom in the dollar in order to
buy dotcom stocks. The 10 yy $ $ $ $ $
held steady above 5% during
that time.
Then the next seven years (2001-2008) saw a com- well as the probability of inflation, there’s also China
modity boom while the dollar collapsed and the 10 … China? What does that have to do with anything?
yy fell from 5% to 3% and stayed at this lower level China’s plans
thereafter.
Well, older subscribers will probably remember that
Rates drop to historical lows over the years, we’ve often talked about China and
The 2008-2020 period clearly had a great stock bull their long-term plans to become the world’s strongest
market. The dollar bottomed the first few years. Then economy.
the 10 yy dropped from 3% to 1.50% in a scary historical Without saying so outright, they’ve also made many
fall to new lows. The dollar became a safe haven while moves to bypass the dollar, along with the hope that
stocks soared. In this case, the dollar was steady up their currency will become more widely used, over-
while the 10 yy held near the lows. powering the dollar. This would not be unusual if they
Then everything fell last year with the pandemic. become the world’s top economy.
The dollar dropped while the 10 yy gapped down to So slowly but surely, China’s been taking steps
truly historical lows, like thousands of years. And in this direction. Most obvious has been all the help
the dollar as we write is taking a breather from its fall they’ve given dozens of countries, gaining friends as
while the yield shoots back up to the “old” historical they go along. They’ve also made dozens of trade agree-
low area at 1.50%. ments in their own currency, eliminating the U.S. dollar
This era since 2020 is the “Everything rise,” in large in these transactions.
part due to stimulus and central bank liquidity. If we
Amazing story
look back to the two major declines in the dollar in 1985
and 2001, both had a stock market boom and a com- China’s story is actually pretty amazing. In the
modity boom while the yield fell to a new platform low. 1960s, for instance, they were such a poor country
Could this happen again? Today’s times are more that millions of people died of mass starvation. Even
compromised but that doesn’t mean we couldn’t see in the 1980s, China was like a poor third world nation
the Everything rise keep going while interest rates stay trying to rebuild and restructure. From then until now
near the lower levels and the dollar continues to head China has been one of the biggest growth stories ever.
lower once the rebound rise is over. At this time, they are one of the world’s most powerful
The bottom line, it’s not a given that the dollar and modern nations.
and long-term interest rates have to move together. Their economy was one of the few that actually grew
Sometimes it depends on other influences. in the fourth quarter of 2020 by 6½% and it’s still
So what could drive the dollar down further? booming. Having overcome covid early on, China has
Aside from massive debt and money creation, as powered ahead as it sticks to its plan.
Copyright Aden Research 7 March 12, 2021CHART 13
15 WEEK MOVING AVERAGE (MA) AdenOriginalChart DAILY PRICES
Currently, China is also the world’s largest recipient bounds (see Chart 13). Once the dollar’s up move is
of foreign companies’ investment. Last year marked over, the uptrend for the currencies will continue, at
the first time China overtook the U.S. in foreign direct least that’s what our indicators are telling us. And
investment, thanks to their booming economy. there’s good reason for this.
Plus, China became the European Union’s top trad- The boom in commodity prices has been very good
ing partner in 2020. This too was a position previously for the ‘commodity countries, Canada, for example,
held by the U.S., but no longer. has benefitted from the rising oil price and its economy
This is all happening gradually, but it is happening. surged 9.6% in the fourth quarter. And for the first time
At some point, the world will take note on a larger scale in 60 years, the Australian economy grew more than
and they won’t want so many dollars. In fact, this is 3% for two consecutive quarters. Considering covid is
already unfolding. The central banks of the world, for still hanging overhead, these are impressive numbers.
example, have been diversifying out of dollars, into Overall, we still like the currencies, some more than
more of a basket of currencies. We believe, this trend others. And if you have the currencies we’ve been rec-
will continue and as it does, the dollar will fall. ommending, continue to hold them.
These are the Australian, Canadian and New Zea-
NEW HIGHS IN COMMODITY CURRENCIES land dollars, as well as the euro and Swiss franc and/
The currencies remain bullish. But they’ve been or their ETFs. As for the weakness in the Swiss franc,
stalling and/or correcting while the U.S. dollar re- we believe it’ll end up being temporary.
METALS, NATURAL RESOURCES & ENERGY
A super commodity bull market
The resource sector continued rising this past that low to the recent high. But copper’s gain since
month, reaching new highs. The resources are jumping the March 2020 lows has more than doubled in price.
out of the gate with a great future ahead. Demand is And copper truly kicked it up a notch when it soared
growing for infrastructure spending, the construction since last Summer.
and remodeling boom, zero interest rates, the weaker To pull silver into this mix, it gained 110% from its
U.S. dollar, inflation concerns and now the new stimu- 2018 lows to its highs last August. And it rose 150%
lus plan. in five months from its March 2020 lows to the August
It’s all helping to push this sector into a strong bull highs. This is when it went on a tear turning clearly
market. bullish.
A SOLID COMMODITY RISE Its 22% decline thereafter has also been mild in
comparison.
This stellar rise has paled the declining gold market
The bottom line is, a full commodity rise is heating
this year, but overall resources have been catching up
up, and it also includes some of the soft commodities.
to the gold and silver rise. Consider when gold started
The sector is looking ahead and we want to be on board
its strong bull market rise in 2018, it rose 75% in two
for the major rise.
years. And the 7 month decline since then has given
back 19%. Not bad at all. GOOD BUYS
Taking copper as the resource barometer, let’s com- Meanwhile, gold has fallen into a good value area... a
pare the same 2018 rise…. copper rose near 70% from good level for a deeper D decline while the LT yields shot
March 12, 2021 8 Copyright Aden ResearchCHART 14 (see Chart 14). This correlation has been CHART 15
underway for decades, and while it can
! vary at times (like it did following the pan-
" # demic start), they both return to moving
in tandem.
They’re both now oversold and due for
a rebound rise.
This means gold is poised to rise. And
while the rise is unlikely to be rip-roaring,
it’ll at least be a solid up move within a
bull market, while long term yields calm
down from their strong run-up.
Gold and the dollar have a relation-
ship, but it too can vary at times. Chart 15
shows how well copper moves opposite to
the U.S. dollar. This is impressive and we’ll
keep our eye on this relationship.
Gold and the dollar, on the other hand,
have moved down together for the last
seven months. We saw outflows triggered
in cash and gold during this weakness.
AdenOriginalChart
DAILY PRICES
But both are now at good bottom areas
compared to the other strong markets.
up. The weakness isn’t over just In other words, gold and the dollar
yet, but it’s getting much closer. could continue moving together on the
DAILY PRICES
It’s time to buy if you want to pick upside, while copper cools down.
Copper also moves closely with the
up more gold, silver, platinum, AdenOriginalChart
and gold and silver shares. This transportation stocks and the emerging
stock markets. Chart 16 shows this relationship since 2018, indexed to 100 in
is a good low area for optimum
order to see their relationship closer. The three were in a sideways lifeless move
buying.
in 2018-2019 but the pandemic plunge changed their destiny.
The resource sector is taking
They all began to soar in 2020. The Transportations jumped up, confirming
a break from its stellar rise and a stock market bull market and outpacing the Industrials, while the resources
it’s set to decline in a normal took off along with the foreign markets.
downward correction. But de- This marked the true meaning of the “Everything rise.”
mand will keep it strong going Plus, another unusual pair is the Nasdaq Composite and the silver price.
forward. Copper is truly the face Chart 17 shows both indexed to 100 since Jan 2020. Note how closely they’ve
of the resource sector. moved together this past year. This is saying silver has been competitive with
INTERESTING CORRELA- tech stocks in strength, and it has a bright future ahead. Let’s see if this re-
TIONS lationship continues.
It’s interesting to see how well A CLOSER LOOK AT THE PRECIOUS METALS
gold and bonds move together Chart 18 shows a closer up view of the metals since the pandemic started
a year ago. Here you can see the growing bull market in stages. We’ve always
CHART 16
said, you know it’s a bull market
when all of the precious metals CHART 17
rise together. While they’re rising
for different reasons, they are all
getting in synch. For now, gold,
silver and their shares are about
ready to see more strength for
this year.
Platinum and copper look the
best so far but as you’ll see, the
relative strength is looking very
interesting.
!" Palladium had an incredible
advance with the car industry
AdenOriginalChart before, but now it’s rolling over AdenOriginalChart
Copyright Aden Research 9 March 12, 2021CHART 18
Holding Near a low 7 year 10 year Rolling
30%
firm high high over
GOLD
SILVER PLATINUM COPPER PALLADIUM
PRICE PRICE PRICE PRICE PRICE
AdenOriginalChart
Mar 2020 21 Mar 2020 21 Mar 2020 21 Mar 2020 21 Mar 2020 21
15 WEEK MOVING AVERAGE
and it looks like platinum and silver are taking over. CHART 20
Interestingly, palladium became too expensive. Would you rather
pay double for palladium rather than buy platinum for half the !"
price? (Platinum used to be a very expensive precious metal).
A
WHICH IS THE STRONGEST? #
Let’s now take a look at the bigger picture of their relative
strength. Chart 19 shows gold compared to silver (A) and versus
platinum (B) both since 1967. You can see gold was clearly the
strongest metal during the 1970s and 1980s when both ratios rose.
#
This changed in the nineties. Platinum had its last hurrah rise
"
until 2008, while silver then took over the number one spot leading
up to the 2011 major peak in the metals.
Platinum fell way back in strength after 2008. The darling be- B %+01+/2&345
came the ugly duck,
CHART 19
and it stayed low until
GOLD: WEAKER THAN SILVER last November when it
& PLATINUM finally took off.
SILVER STRONGER THAN GOLD, first in Gold was clearly the
A 10 years strongest metal from
2011 to 2020 when it
reached a record high... !
not only in dollar terms
but also versus both
silver and platinum C $%%&'()*+,-.-/+
(see Chart 19). $67/-38
This then changed
about a year ago when
!" #$% silver and platinum
became the darlings
of the precious met-
B
!" #$%& ! als world. Besides the
fact that silver and
platinum were the
most undervalued,
and poised to become AdenOriginalChart
stronger than gold,
major hedge funds
sold millions worth of gold to focus on silver.
Silver is an industrial metal as well, and it’s playing a critical role
in the “green revolution.” Industrial buyers drive more than 50% of
silver demand.
AdenOriginalChart
March 12, 2021 10 Copyright Aden ResearchCHART 21 if gold slips below its MA, CHART 22
it’s unlikely to be long 0 $
lasting. 4 0 &
SILVER: Holding first A
.!
! %( )($
near the highs . *+
Silver is incredible. !
Chart 21 shows how
silver is staying near the "!
top side of its Step 1. This !
is its first bull step in the %
!
!&/ (3
growing bull market. And 0 1 2
1
once it clearly surpasses
the $30 level it’ll move B
AdenOriginalChart
into Step 2 where it could -'
then jump up to the top
GOLD: Declining in a bull market side near $35. -
$% $%%
When you reflect on the amount Fed Credit Silver is riding the
-.
has nearly doubled in the past year, you can steps until it reaches
see we are in uncharted waters today. The record highs near $50. -
Covid relief fund of $1.9 trillion adds to the Silver is special as we’ve
, -.
economic risk for the future. been showing and you
This is a preface to a solid gold rise in definitely want to be on , -
&
the upcoming years. Meanwhile, many were board. It’s set to continue
outperforming gold in ! " # '
discouraged during the decline of the last 7 AdenOriginalChart
months, but in the end it’s a deeper D decline this bull market.
that is similar in length to the D declines in GOLD SHARES: Following gold and near lows
2008 and 2012-13 (see Charts 20A and B). Gold shares have been following gold. They’ve been weaker
The difference is today’s decline is not as but they were also stronger. This is normal. Chart 22A shows
steep. But gold had the possibility of test- the steady decline from the highs in the HUI gold share index.
ing its 23 month moving average during this Most interesting is its leading MT indicator (B) has fallen to a
weakness, and low area. This means the downside is limited and it looks like
CHART 23 indeed it did. HUI’s solid support near 250 just may be the low.
All Charged Up As long as gold Keep your gold and silver share positions. We’re riding
Price of metals used in electric vehicles holds near it through weakness and if you want to buy more, now is the time.
January 3rd 2020 = 100 at $1670, the NATURAL RESOURCES: A hot market
lows may be at
250
The impressive rise you’ve seen this past year is clearly a
Neodymium oxide* hand.
supply/demand situation. There is growing strong demand and
200 Note the
a limited supply.
leading indi-
Praseodymium oxide* 150 Charts 23 and 24 show a good sampling of the rise is metals,
cator (B) has
Cobalt Nickel minerals and energy this past year. And with growing technol-
finally fallen to
100
ogy needs for resources, as well as infrastructure and building,
the D low area,
Copper
Lithium it looks like we’re at the
50
and while it
2020 2021 onset of a major fasci- CHART 24
could go low-
COURTESY: economist.com
nating bull market.
er, it’s now in
...PLUS OTHER RESOURCES Iron ore accounts
the extreme
for about 90% of Rio
low area. Plus,
Tinto’s earnings. It and
its leading LT
BHP Billiton are among
indicator (C)
the largest iron ore pro-
could still fall
ducers in the world and
further to its
they both paid good
zero line, and
dividends.
still remain in
We recommend
a major bull
keeping your positions
market.
and we’re now looking
So far, all is to buy more resource
good and even stocks on weakness.
AdenOriginalChart AdenOriginalChart
Copyright Aden Research 11 March 12, 2021OVERALL PORTFOLIO RECOMMENDATION
PRECIOUS METALS, ENERGY, RESOURCES 70% 20% Stocks
Gold remains bullish, The D decline is near a low and it’s at a good value area. All of Gold & silver,
the precious metals and the resources are looking good. That is, it’s time to buy more gold shares,
energy &
gold, and especially silver, platinum, and gold and silver shares. The resource sector has resources
risen far and fast. Keep your positions, and buy new ones on weakness.
U.S. & GLOBAL STOCK MARKETS
The stock market is on the rise again and several indexes are hitting new record highs. 10% Total Cash
The market appears to be in its final leg in this bull market and it’s set to rise further. For in basket of currencies
now, we advise that you continue to buy and hold the stocks we’ve been recommending,
but knowing we may not keep them
for the long-term. These are: Dow OUR OPEN POSITIONS in order of strength per section
Industrials (DIA), Dow Transport
(IYT), iShares Russell 2000 (IWM), PRECIOUS METALS, ENERGY, RESOURCES
Dynamic Software (PSJ), Nasdaq PURCHASE PRICE AT % GAIN/LOSS CURRENT
NAME SYMBOL
DATE PRICE ISSUE DATE SINCE BOT RECOMM
(QQQ) and Walmart (WMT).
Platinum PPLT Apr-19 83.81 112.89 34.70 Buy/Hold
Franco Nevada FNV Jun-20 128.24 120.63 -5.93 Buy/Hold
INTEREST RATES & BONDS
Royal Gold RGLD Sep-17 90.19 109.53 21.44 Buy/Hold
Long-term interest rates soared Newmont NEM Jun-20 55.53 59.03 6.30 Buy/Hold
this month. This put downward Gold Miners ETF GDX Feb-17 25.20 33.07 31.23 Buy/Hold
pressure on several of the mar- Hecla Mining HL Dec-20 6.22 6.50 4.50 Buy/Hold
kets. Currently, however, long Pan American Silver PAAS Aug-19 16.95 32.07 89.20 Buy/Hold
rates are way overextended and Silver Trust SLV Jun-18 16.17 24.05 48.73 Buy/Hold
they’re due for a breather decline. Silver (physical) Aug-03 4.93 25.91 425.58 Buy/Hold
This could happen at any time. Jr Gold Miners ETF GDXJ Feb-17 42.12 47.10 11.82 Buy/Hold
Wheaton Pre Mtls WPM Jun-20 39.23 39.24 0.03 Buy/Hold
Meanwhile, short-term interest
Barrick Gold Corp GOLD Oct-20 26.00 20.31 -21.88 Buy/Hold
rates have stayed near 0% and SPDR Gold GLD Mar-17 117.51 161.53 37.46 Buy/Hold
the Fed’s determined to keep them Gold (physical) Oct-01 277.25 1719.80 520.31 Buy/Hold
there. For now, bonds prices are Yamana Gold AUY Jun-20 4.82 4.48 -7.05 Buy/Hold
weak and they’re high risk, so Agnico Eagle AEM Feb-17 47.10 59.12 25.52 Buy/Hold
continue to avoid all bonds. RESOURCES
Global Nat Res FTRI Dec-20 11.23 14.15 26.00 Buy/Hold
CURRENCIES
Commodity Ind GCC Dec-20 18.89 20.72 9.69 Buy/Hold
The U.S. dollar rebounded this BHP Billiton BHP Dec-20 65.58 74.56 13.69 Buy/Hold
month, hitting, a 3½ month high. Rio Tinto RIO Dec-20 76.28 81.26 6.53 Buy/Hold
But the dollar’s major trend is still Rare Earth REMX Jan-18 96.36 80.39 -16.57 Hold
down, signaling the dollar will again HMMJ.TO
Horizons Marijuana Jan-18 20.38 10.63 -47.84 Hold
fall further once this rebound is HMLSF(OTC)
over. The major currencies remain STOCKS
bullish. Continue to hold our rec- Transport Avg Ishrs IYT Nov-20 221.78 249.91 12.68 Buy/Hold
ommended currencies, which are Dow Indust SPDR DIA Nov-20 299.24 328.32 9.72 Buy/Hold
the Australian, Canadian and New iShrs Russell 2000 IWM Nov-20 184.37 233.72 26.77 Buy/Hold
Zealand dollars, as well as the Dynamic Software PSJ Dec-20 158.76 163.47 2.97 Buy/Hold
euro and Swiss franc and/or their Nasdaq QQQ Dec-20 308.92 315.46 2.12 Buy/Hold
ETFs. We advise keeping a 10% Wal-Mart Stores WMT Nov-20 151.60 134.05 -11.58 Buy/Hold
cash position in a basket of these CURRENCIES
currencies. Cand dollar ETF FXC Jun-20 72.64 78.82 8.51 Hold
Note: Shares, funds & ETFs Aust dollar ETF FXA Jun-20 68.37 77.02 12.65 Hold
are listed in the box in order of New Zealand Dollar Dec-20 0.7137 0.7179 0.59 Hold
strength per each section. Keep Euro ETF FXE Jun-20 106.08 112.13 5.70 Hold
the ones you have on the list. Swiss franc ETF FXF Jul-20 97.61 97.84 0.24 Hold
March 12, 2021 12 Copyright Aden ResearchYou can also read
