Bullion Investing In Canada is GOLD. Investing in Silver is the Right Choice

Bullion Investing In Canada is GOLD. Investing in Silver is the Right Choice

Cache Metals' Bullion and Commodity Week-In-Review forNovember 15 19, 2010

GOLD

After a less than stellar week for spot gold the metal finally found some support amid all the turmoil in the world. Gold traded to a 2 month low of $1329.80 before bouncing back and turning higher.

The main driver has been the turmoil in Ireland and whether they will take the bailout money. Now if you talk to Irish officials they claim they do not need the money. The flight into the US dollar started last week and continued this week. The Euro/USD traded to a low of 1.3456, overthe weekend. Various media reports suggested that EU and IMF officials were huddled in a round of negotiations with Irish authorities over the possibility of accepting a bailout package.

Despite the hesitation of the Irish authorities, pressure on the third largest island in Europe didn't let up this week as speculators now view the situation as essentially irreparable. With Ireland now completely shut out from the credit markets as the cost of borrowing has become expensive, the country finds itself in an increasing dangerous situation as day to day financing needs are unmet. Another catalyst for the fall in the price of gold was speculation that China's central bank, the People's Bank of China (PBOC), is planning to raise interest rates thus increasing the

opportunity- cost of holding the yellow metal. The impact of a possible Chinese rate rise would also be felt in the commodity markets, where Chinese demand plays a significant role in setting prices. As a reminder, China raised rates back on October 17, sparking a world-wide sell-off in stocks, commodities, emerging-markets and currencies as investors lowered their expectations for Chinese growth. Gold fell $36.10 to $1335 back in October, just where we stood Wednesday. Investors moving from the euro to the U.S. dollar can weigh in gold prices for only so long. If the sovereign debt issues spread throughout Europe, we could see investment demand for gold around the world rise substantially.

Mixed US data trickled out over the past week and couldn't temper the rally in the green back. US manufacturing output rose by .5%, the most since July. The latest economic reports offered a glimmer of hope that the economy is moving forward. The increase in the Philly Fed survey and the low level of jobless claims provided a relief for traders and investors. However, before we start to dance in the streets, it is important to realize that the mixed bag of reports coming out indicates that the recovery is uneven. This means, easy monetary policy is still necessary to support the recovery and we could still see another round of QE3.

The week is closed out with gold trading nicely off of its lows of $1329 as the Irish bailout still has the attention of traders. As much as it wasn't a surprise China was raising their interest rates again quelled the temporary rally as China is clamping down on its economy and tightening their belts. This will have an effect on the global recovery as China was leading the world in the recovery. Next week will be a short week as traders eye the US thanksgiving. It will be light with economic data so we should look to the currencies for some direction.

The Timeof Investing in Silver or Gold is NOW.Visit cachemetals.com and review our interactive brochures and buying guides. Contact one of our specialists at 1.416.916.6660 or 1.877.916.6670 for a no risk consultation.

SILVER

Spot silver took it on the chin but since has recovered very nicely reaching a high of $27.39 in overnight trading Friday, after touching a low of $25.02. The grey metal has rallied on renewed investor demand. Even with China raising its bench mark interest rate silver has still continued its bull run. Through the sell off this past week silver still maintained its bull channel of $25.00, while gold broke through on its own. China has very firmly told banks to set aside larger reserves for the second time in two weeks, taking cash from the financial system to lessen inflation and asset-bubble risks in the world's fastest-growing major economy. This also puts a damper on the surge in commodities prices as high Chinese demand has fed this recent rally. With the news spot silver turned lower in Friday's afternoon trade hitting $26.38 before bouncing back to trade to $27.06.

Investors were also swallowing a speech by U.S. Federal Reserve chairman Ben Bernanke, who took a not so subtle jab at China in his speech at a banking conference in Frankfurt, Germany Friday. He stated that "The country's inflexible currency regime, which has the yuan effectively pegged at a low rate against the dollar, is preventing a much-needed rebalancing of growth in the global economy."

The greenback rallied slightly against the Euro as news also broke that the Chicago mercantile Exchange would be increasing the margins on the Euro/USD currency in the face of the volatility. Having shot to a high of 1.3731 overnight the pair quickly sold off as fx traders booked profits ahead of the weekend.

Spot silver continues to outperform gold even in this short term relief rally. The gold/silver ratio traded to a low of 48.65, before turning and trading higher to 53.55. We are currently sitting at 50.20 with the possibility we could see it grow tighter as we approach year end. Silver bugs are quite used to the volatility we have noticed over the past few weeks, but a stronger greenback and the margin increases have just temporarily put the brakes to the impressive rally. Thursday, saw the price recover it losses as the grey metal headed towards the $27 level. Analysts cite speculators buying the dips, improved industrial demand, a recovery in base metal prices, stronger equity markets and a weaker dollar for silver's resurgence. We have always maintained a market is not a market unless we see a correction in price however deep or long. Correction is always needed to start the next leg up. The market may just have witnessed the correction for our next push higher.

Support Gold $1340/$1336

Support Silver $26.40/$25.94

Resistance Gold $1355/$1363

Resistance Silver $27.39/$27.85

Weekly Close for Gold

November 12 - $1365.40 November 19 - $1352.20

Weekly Close for Silver

November 12 - $25.94 November 19 - $27.18

Weekly Close for Platinum

November 12 - Palladium November 19 - $1671

Weekly Close for Palladium

November 12 - $673 November 19 - $703

Trading Department - Cache Metals Inc.

This is not a solicitation to purchase or sell

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