ASHR - Buy Palladium, Sell Gold

2025-04-04 07:30:00 ET

Summary

• In February 2025, almost everyone wanted to be long the most popular large-cap U.S. stocks before they began what will likely become roughly three-year bear markets. Now everyone loves gold, which will likely suffer a similar fate.
• Meanwhile, gold mining shares and their funds, including GDX and GDXJ, have been struggling relative to gold bullion, while the traders' commitments show commercials in the highest percentiles of short:long ratios for gold, silver, and platinum.
• Invest in the most unpopular assets, including palladium, which can be purchased via PALL. The traders' commitments for palladium has approached all-time record bullish extremes.
• With hedge funds' record longs in gold and their record shorts in palladium, it seems pretty clear what will happen next.

The media have been full of positive stories about why you should buy gold and related assets. Many analysts who had been bearish or indifferent toward gold a year ago have recently jumped aboard the bullish bandwagon. Almost all analysts' recent price targets talk about gold reaching 3,500, 4,000, or some higher number, with the only debate being when. Hardly anyone is talking about gold dropping to 2800, which is a modest pullback and the same distance away from 3150 as 3500 is. A tiny number of people have mentioned gold dropping to 1,820, but they say it will happen in five years, which is an eternity with investing. Meanwhile, gold mining shares and their funds, including GDX and GDXJ , have been struggling relative to gold bullion, while the traders' commitments show commercials in the highest percentiles of short:long ratios for gold, silver, and platinum.

Almost no one has been mentioning palladium, which is by far the most depressed precious metal in recent years. The price of PALL , a fund of physical palladium, slumped from a top of $298.21 on March 8, 2022 to a bottom of $76.49 at 8:30:48 a.m. on August 5, 2024, which is a loss of 74.35%. The traders' commitments for palladium approached all-time record bullish extremes, with the most recent reading showing commercials long 9,082 contracts and short 1,662 for an amazing ratio of 5.4645 to 1 long:short....

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