E-Mail Update by Thomas G. Cloud
Monday, March 8, 2004

A Palladium Buy Signal and a Platinum Sell Signal

Demand for palladium has increased significantly since it was first introduced in the early 1970’s by automobile engineers who discovered that this particular metal’s properties could be used in the catalytic converter to help meet emission standards. As those standards have tightened over the years, palladium began to be applied globally in the 1990’s because this soft ductile metal offered the best properties available for the tighter demands levied by automobile manufacturers. As the demand for this metal soared in the early ‘90’s, prices rose steadily from $119 per ounce in 1996 to $1100 per ounce in January 2001. As palladium prices soared, the car industry turned to platinum that was costing one half of that price in the late 1980’s. Many of you profited from our buy signal of platinum at $314 per ounce as platinum is now in the $860 per ounce range. Experts believe the price could top out at $900 to $1000 per ounce.

It is my belief that these two metals will once again begin to reverse as the car industry returns to palladium for use in catalytic converters. Therefore, I am issuing a buy signal for palladium at $250 per ounce. I expect this metal to rise three to four times over the next three to five years. It is also my suggestion that you sell platinum and re-position it into palladium, although platinum may still rise as mentioned earlier herein.

Demand
The demand for palladium is soaring. Over ninety percent of the palladium in the world comes from Russia and is mined only a few months out of the year due to the inclement weather at mining locations. Demand is being created once again by auto producers. This demand will expand dramatically over the next twelve months when the major purchases for platinum and/or palladium are made by automobile manufactures during their peak buying months of January, February, and March.

The newest focus on palladium is coming from other industries in addition to that of the automobile industry. For example, dentistry, watch making, and surgical instrumentation have also impacted its demand in the past year. Other industrial uses are being tested and will definitely rekindle the enthusiasm for palladium as prices continue to rise.

The price in 2004 has gone from $198 per ounce to around $250 per ounce. Also palladium is expected to play an important role in China’s economic development. The Chinese are currently using palladium in many different tests in addition to the automobile industry. Most of all, we expect the demand to come primarily from the automobile makers as they rely on the air cleaning properties with the stringent emission standards that can only be met by platinum or palladium. From the price differences alone, you can easily see that it is time for the automobile industry to make a change back to palladium.

Independent Confirmation
It is good to know that Mary Anne and Pamela Aden of www.adenforecast.com have also written an article entitled, “A Picture is Worth a Thousand Words”. Penned on February 19th, the article touches on their belief that palladium is indeed a “screaming buy”. Couple this with the newsletters of Harry Schulze, Bill Bonner, and James Sinclair and one realizes that the forecasts of the past two years about bull markets and commodities are still in the beginning stages. Over the past two years, gold has risen 57%, platinum has doubled, and silver has increased 35%. Keep in mind, palladium has a chance for greater appreciation than any of these metals over the next two to four years.

Means of Ownership
There are two ways to acquire palladium. First you can purchase physical one-ounce bars. Because palladium is only minted by a few refineries worldwide, it carries a higher premium than gold. However, I have been able to work out a deal with a major wholesaler to bring the price of one-ounce bars down from a 15% to 16% premium to a 10.5% premium (inclusive our commission). This is a competitive pricing structure and is in fact cheaper than the price many dealers have to pay. The one-ounce bars we recommend are called Fortuna bars and are minted by Pamp Swiss. They are the largest privately owned gold refiner and fabricator in the world.

The second way to own palladium is with a fungible storage certificate. This is a fully insured purchase (i.e., Lloyds of London) and the firm carries fidelity bonds on each individual allowed in the storage area. I have personally visited this facility and have used this particular bonded warehouse for over twenty years. Many of our clients already have gold, silver and platinum stored in this depository in Dallas, Texas. They issue bank guaranteed certificates. The certificates must be guaranteed by a bank where you have a bank account when you are ready to sell. This process provides added protection. If you buy palladium and opt not to assume physical delivery, I have made arrangements where our clients pay 5.5% over spot (inclusive of commission). Also we have a guarantee that when you liquidate, the least you can receive will be $1 below spot – not the typical $10 to $15 below spot that most refineries pay for the thinly traded metals like platinum and palladium. Keep in mind that by storing, you avoid extra costs like shipping.

If you own platinum, it is my belief you should sell it now or sell when it hits $900 per ounce (which will most likely be in the near future). That money should be used to purchase palladium. Again, we feel the price of palladium will increase steadily over the next two to four years. Expect palladium to top $300 per ounce during 2004. Early in 2005 when car manufacturers are buying metals for catalytic converters, it is our belief (along with many other experts) that the industry will revert back to palladium. Over the next several months, the industry most assuredly will be making the minor changes necessary in automobiles in order to convert back to palladium.

If you have any questions or if you want to discuss the particulars of either palladium or platinum, please do not hesitate to phone (800) 247-2812 or (770) 441-1550. We expect this buy signal will be as effective, if not more so, than the one we successfully issued for platinum.

TURAMALI, INC CONSULTING, INC.
8735 Dunwoody Place, Suite 0
Atlanta, GA 30350
www.turamali.com

(770) 642-6702 or fax (770) 642-0137