Risk On Rally Benefitting Oil, Equities And Industrial Metals

Wed, 03/21/2012 - 06:38 EDT - Seeking Alpha

By Jeb Handwerger:We have been witnessing a rotation from risk off treasuries and dollars into risk on oil (OIL), copper (JJC), US (SPY) and European equities (EUR). Gold (GLD) and silver (SLV) may be overlooked for riskier assets which may have been more undervalued. This may be a short term phenomenon as gold and silver will catch up as they are the ultimate hedges against currency debasement.In 2011, we saw unprecedented interventions by sovereign governments into the foreign exchange markets in order to support the U.S. dollar (UUP) and equities, while simultaneously putting pressure on precious metals. So far this move is working temporarily.Eventually gold and silver will break out as they did in September of 2009 when gold broke through $1000 and eventually ran to $1900. Likewise, in 2009 and most of 2010 silver consolidated while equities were going up. Then gold and silver soared and outpaced equities whenComplete Story »

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