"Another sobering report on the nuclear disaster in Japan, see link. Optimistically, let's hope good comes out of all this in the form of better regulation. Having spent fifteen years deep sea saturation diving in the North Sea, I've experienced the pressure of pioneering, it was the seventies and the oil had to start flowing…no matter the cost. Too often it takes a disaster to bring humans to their senses…better late than never!

"On a lighter note, I initiated the first of three planned nuclear positions on the 10th March, how's that for timing! As always your sober views are very helpful and much appreciated. I have a predisposition towards risk taking and your sage overviews help to keep me safe. Bon weekend,

"PS. When you have time, could you review the precious metals, do you think the traditional quieter summer season will come into play this year, or, have world events turned everything on its head? Many thanks."

David Fuller's view We will certainly get plenty of discussion regarding regulation and safety. While we will always need a framework and standards, my view is that the best regulation will come when responsible people are running important businesses, from banks to nuclear reactors.

Your earlier career beneath the North Sea will have given you a good understanding of both risk and reward, and presumably the ability to withstand the stains of both. Staying with the theme at least you did not dive all the way in on 10th March.

My last review of precious metals was on 22nd February. They have maintained the same pecking order discussed then, which has favoured gold and silver. However none have been immune to the choppy market activity of late. I would not discount the probability of a quieter summer season but it all depends on sentiment and the charts will show us, as you know.


Gold (weekly & daily) faltered on Tuesday but there has been no additional downside follow through during this consolidation to date. The overall trend remains reasonably orderly and I would give the benefit of the doubt to the upside, certainly while prices remain above $1380. However a move below that level would only be a warning of uncertain reliability. The key technical factor, best seen on the weekly chart is the progression of higher reaction lows. Therefore a close beneath $1300 which lasted for more than a day or two would break the medium-term uptrend consistency.

Silver (weekly & daily) is more difficult to micro analyse because of its frequent volatility. The main concern is that it remains quite overextended relative to the medium-term trend mean, represented by the 200-day moving average. Silver tends to trade like high-beta gold and the recent loss of momentum has corrected the short-term overbought condition. While silver should continue to track and possibly lead gold, risks rise when a trend accelerates above its MA mean. A close beneath $33.50 would break recent support, opening the door to a further setback.

I will review palladium and platinum on Monday.