Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Monday, February 24, 2020

Should Investors Worry about Repo Market and Buy Gold? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

$500 billion. This is the sum the Fed has already pumped into the repo market since the crisis there started. On September 17, 2019, the secured overnight funding rate – a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, based on the repurchase transactions – more than doubled, as the chart below shows, while the intraday range jumped to about 700 basis points! As a reminder, we are talking about the repo market, where interest rates usually fluctuate in an intraday range of 10, or at most 20 basis points.

Monday, February 24, 2020

Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Ladies and Gentleman, gold has overcome yet another barrier, jumping above $1,600 amid the fresh FOMC minutes and the renewed fears about the coronavirus economic consequences. What’s next for the yellow metal?

Fed More Optimistic about Global Economy
Gold bulls can be happy. As the chart below shows, the yellow metal has jumped above $1,600 amid the FOMC minutes and concerns about the coronavirus. Let’s now analyze these two important developments.

Sunday, February 23, 2020

Gold Price At $1500 Is Fair And Accurate / Commodities / Gold & Silver 2020

By: Kelsey_Williams

Is $1500 a reasonable price for gold? Some of the more ardent gold “bulls” might say no. A price of $2000 per ounce should sound better to them. That particular number is likely more popular because gold’s price didn’t quite get there eight years ago, stopping just shy of $1900 per ounce.

Similar behavior occurred after 1980, when gold’s price assent was stopped at $850. At that time, $1000 became the price projection of choice.

In both cases, the expectations for gold were likely born out of desire, rather than fundamentals.

So, how can we know what is a fair and accurate price for gold today – right now?

Saturday, February 22, 2020

Gold Warning – This is Not a Buying Opportunity / Commodities / Gold & Silver 2020

By: P_Radomski_CFA

Gold rallied by $17.20 yesterday (1.08%), while silver soared by $0.42 (2.35%), which means that silver more than doubled gold’s rally. Silver is outperforming gold, which was both profitable, and informative. Gold miners moved higher even more (4.60% in case of the HUI Index), indicating that the final part of the rally is not yet over but rather that we are still in it. Alternatively, it could mean that yesterday’s session was the top, but given today’s pre-market moves higher in gold and silver, the former seems much more likely. In other words, gold and silver are likely to move higher shortly.

One question is how far are they likely to move, but the key question is how likely it is that they will indeed move higher.

At first sight, the situation is as bullish as it gets:

• the USD Index might be topping here while being very overbought from the short-term point of view
• gold, silver, and mining stocks showed exceptional strength by rallying despite USD’s rally
• gold and silver broke above their declining resistance lines
• miners showed strength and created a bullish price gap yesterday

Indeed, these are all factors that will likely make one consider jumping in the precious metals market with both feet without warm-up. Caution is warranted, though. There are also other factors and a what-if case that’s becoming increasingly important that need to be considered. While at it, take a look at the other gold trading tips to consider.

Let’s start with the last two points.

Thursday, February 20, 2020

Is Crude Oil Firmly on the Upswing Now? / Commodities / Crude Oil

By: Nadia_Simmons

It appeared that the bears firmly took the reins of yesterday’s session, but most of their gains were history before the closing bell. Have we seen an important turning point for oil?

Let’s start with the daily chart examination (charts courtesy of http://stockcharts.com and http://stooq.com ).

Crude oil opened yesterday’s session with the green bullish gap that’s slightly below the 61.8% Fibonacci retracement. Although the bulls took the commodity a bit higher after the market open, this strong resistance encouraged the sellers to act.

Thursday, February 20, 2020

Trump and Economic News That Drive Gold, Not Just Coronavirus / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Coronavirus, the topic du jour. It is still the major threat for the global health and economy. But we should not forget about other geopolitical and economic developments. What do they imply for the gold market?

Coronavirus, China’s Economy and Gold Prices

The number of cases of coronavirus reported by the WHO have increased from 45,171 cases and 1,115 deaths by February 12 to 51,867 cases and 1,669 deaths by February 16, 2020. However, the number of new cases is slowing down, which suggests that the epidemic could reach a turning point within weeks. This is of key importance not only for the global health but also for the global economy, as the sooner the epidemic is over, the quicker China’s economy will recover. As a reminder, the quarantines of the whole cities like Wuhan and other compulsory measures disrupted the supply chains and hampered the Chinese economy.

Thursday, February 20, 2020

Silver’s Valuable Insights Into the Upcoming PMs Rally / Commodities / Gold & Silver 2020

By: P_Radomski_CFA

The analysis of the precious metals market isn’t just gold analysis – there are times when silver rises to the forefront of everyone’s attention. And we fully expect such a moment of the white metal stealing the spotlight to arrive shortly. What lessons can we draw from the silver chart?

The key analogy in silver (in addition to the situation being similar to mid-90s) continues to be the one between 2008 and the 2016 – now periods.

Wednesday, February 19, 2020

David Smith: Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… / Commodities / Gold & Silver 2020

By: MoneyMetals

Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report and regular contributor to MoneyMetals.com. David, it's good to talk to you as always and how are you my friend?

David Smith: I'm just fine and it's great to be back, Mike.

Mike Gleason: Yeah, well it's been a handful of months since we had you on, and I've got a lot of topics to discuss today so we'll get right into it. Now to start out, here we are about a month and a half into the new year. Metals prices perked up in December but haven't really done much since that first week in January when it looked like we were about to head to war with Iran, which was a short-lived crisis thankfully. But in our view, markets are incredibly complacent, David. Stock prices just keep moving higher and higher. Nobody seems to be worried about risk, this despite there being plenty of reason for concern. To name a few, we've got a virus outbreak. There continues to be extraordinary activity in the repo markets – officials still haven't really bothered to explain what's going on there. And Brexit is finally happening. Maybe we're missing something, but it really feels like markets ignore all this stuff completely.

Tuesday, February 18, 2020

Gold Price Is Getting Ready For Its Next Breakout / Commodities / Gold & Silver 2020

By: Avi_Gilburt

In late October and again in November, I began preparing my subscribers for the last rally phase we experienced in the metals complex. I even penned a number of public articles outlining my expectations for the same. In fact, on November 11, I published an article entitled "Gold Is Likely Approaching A Local Bottom." As we now know, gold actually struck its bottom at the time within 24 hours of that article. And, I then reiterated my expectations in a blog post at the end of November entitled "Buy Gold On Black Friday." Even at that time, the GLD was in the 137 region before it began its run almost 10% higher since that time.

Then, on January 5 of this year, I published another article entitled "We Are Approaching A Pullback In Gold."

Saturday, February 15, 2020

Gold Stocks Still Stalled / Commodities / Gold and Silver Stocks 2020

By: Zeal_LLC

The gold miners’ stocks are still stalled, mostly grinding sideways despite higher prevailing gold prices.  This lack of progress is really frustrating traders, slowly shifting herd psychology towards apathy.  That’s the mission of high consolidations, gradually rebalancing sentiment by bleeding off greed.  This healthy process has already come a long way, but still needs to fully play out before gold stocks’ next upleg can run.

The GDX VanEck Vectors Gold Miners ETF remains this sector’s most-popular benchmark.  Launched way back in May 2006, its first-mover advantage has grown into an insurmountable lead over its peers.  Its $12.7b in net assets this week are running 38.2x larger than its next-biggest 1x-long major-gold-miners-ETF competitor!  GDX’s lackluster price action in this past half-year or so has disheartened traders.

Last summer the gold stocks blasted higher with gold after its first bull-market breakout in several years.  The gold stocks caught a bid before that landmark event, starting to rally at the end of May as gold surged on US-tariff fears.  By early September GDX had soared 49.0% higher in just 3.2 months!  Over 2/3rds of those big gains came after gold’s bull-market breakout.  GDX crested with gold on September 4th at $30.95.

Friday, February 14, 2020

Will the 2020s Be Good or Bad for the Gold Market? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

2010s have certainly been a roller coaster ride for gold. Will the 2020s then be better than the prior years for the yellow metal? Today’s article provides the macroeconomic outlook for the full decade – learn whether the fundamental factors will become in the 2020s less or more friendly toward gold.

People often ask about my economic forecasts for the current year, whether the recession will come or not, etc. I reply that I’m an economist, not a fortune teller. As future is inherently unpredictable, I don’t like the traditional January game of economic forecasting for the year ahead and I avoid providing detailed price predictions. So, my Readers can be surprised by the title of this article – if I don’t like forecasting one year ahead, why the heck I would be forecasting the whole decade?

Friday, February 14, 2020

Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days / Commodities / Gold & Silver 2020

By: Chris_Vermeulen

Our Adaptive Dynamic Learning predictive modeling system is suggesting Gold will rally above $1650 within the next 2 to 4 weeks, then settle into a narrow price range above $1600.  If you’ve followed our analysis of Gold over the past few months and years, you already know we expect Gold to rally above $1750 this year and to continue to move higher attempting to breach the $2100 level.  It is just a matter of time as far as we are concerned where Metals begin a massive upside rally as the global debt markets become an issue throughout the world.

Right now, there is a very clear opportunity for Gold to rally nearly $100 over the next few weeks.  Our ADL predictive modeling system is suggesting this really should begin very soon and will likely propel the price of Gold to levels above $1640 before March 15. Of course, as we’ve seen before if price stays below the $1600 level for another few weeks, this will set up a “price anomaly” where the price will, at some point, attempt to rally very aggressively to the upside to make up the difference.

Friday, February 14, 2020

Coronavirus, Powell and Gold / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Coronavirus, Powell and Gold

The number of cases and deaths by the new coronavirus have escalated quickly. However, the fears subsided and the stock market rebounded. How did gold perform, and what can we expect from the king of metals next?

Should We Stop Worrying about the Coronavirus?

Well, that was a quick escalation. On February 2, when we wrote the first Fundamental Gold Report about the coronavirus, there were 14,557 confirmed cases and 305 deaths. Yesterday, the World Health Organization reported almost 45,171 cases and 1115 deaths. So, the number of infections and death toll of coronavirus have surged in recent days. Moreover, China has changed today its diagnosis methodology (to include “clinically diagnosed” cases), confirming 15,152 new cases and 254 additional deaths. Hence, as the chart below shows, the total number of cases in China has reached 59,800, while the global number has already surpassed 60,000.

Thursday, February 13, 2020

PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… / Commodities / Palladium

By: MoneyMetals

The explosive price action seen in palladium recently is indicative of a physical shortage.

Put simply, available inventories are failing to keep up with demand (largely from the automotive industry).

According to Refnitiv GFMS, the palladium market will be under-supplied by 883,000 ounces this year.

Stresses on the physical market are showing up in spiking lease rates, illiquidity, widening bid/ask spreads, and disconnections between quoted spot prices and actual physical prices. Most importantly, the deficit in palladium supply is manifesting in the form of rising prices.

Thursday, February 13, 2020

Crude Oil Price Action – Like a Coiled Spring Already? / Commodities / Crude Oil

By: Nadia_Simmons

Trading slightly above the $50 mark, crude oil hasn’t made a decisive move either way so far. Yesterday’s bullish session has brought us new clues. Let’s dive and examine the strength of the evolving oil move higher.

We’ll start by taking a closer look at the daily chart (charts courtesy of http://stockcharts.com).

Wednesday, February 12, 2020

Will USD X Decline About to Trigger Precious Metals Rally? / Commodities / Gold & Silver 2020

By: P_Radomski_CFA

Although its decline was not yet significant, the USD Index finally declined yesterday. Given the recent breakout above the November 2019 highs, this move lower might leave one with mixed feelings.

Wednesday, February 12, 2020

Copper Market is a Coiled Spring / Commodities / Copper

By: Richard_Mills

As the third most-consumed metal on earth, behind iron and aluminum, copper is all around us. Found naturally in the earth’s crust, copper was among the first metals used by early humans, dating back to the 8th century, BC. 

Three thousand years later homo sapiens figured out how to smelt copper from its ore, and to alloy it with tin to create bronze. Bronze was useful for tools and weapons, making it one of the most important inventions in the history of civilization. Copper was later used in roofing, and still is, for its strength and oxidized green look, as well as in works of art. Copper, or Cu, is also essential for all living organisms.

Wednesday, February 12, 2020

Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Amid the worries about the coronavirus and its impact on the global economy, the US yield curve has briefly inverted again. Recession, anyone? And what exactly does the inversion imply for the gold market?

Yield Curve Inverts Again

Ooops, it happened again – the yield curve has inverted! Please take a look at the chart below. It shows that at the turn of January and February, the spread between 10-year and 3-month Treasuries has dived below zero once again. It stayed below zero only for a couple of days before moving back into the positive territory. The inversion was shallow as the level of the spread did not plunge below minus 0.4.

Tuesday, February 11, 2020

JPMorgan chase Confirmed as Target of Precious Metals Price Rigging Prosecution / Commodities / Gold & Silver 2020

By: MoneyMetals

The U.S. Department of Justice investigation of criminal activity in the precious metals markets has taken an interesting new turn.

According to Bloomberg, prosecutors are targeting the bank itself and not just the individual traders involved in rigging prices. If convicted, the bank as an institution could be held accountable for years of structured and pervasive cheating.

The DOJ investigation of JPMorgan’s metals trading desk began more than two years ago. It came on the heels of a guilty plea by Deutsche Bank.

Sunday, February 09, 2020

Could Silver Break-out like it did in 2011? / Commodities / Gold & Silver 2020

By: Richard_Mills

Silver is expected to begin the 2020s newly burnished, through a combination of higher industrial and investment demand, and tightened supply owing to mine production issues and output cuts. If it does, it would be the continuation of a trend that started last year. 

2019 was an excellent year for gold and silver. Both metals began to run last summer after the US Federal Reserve started cutting interest rates. In July the Fed lowered rates three times before freezing the (benchmark) federal funds rate at a range of 1.5 - 1.75% in November. The market is reportedly expecting multiple cuts in 2020.

That, along with similarly dovish policies among other central banks, a record $17-trillion of negative-yielding sovereign bonds, and fresh safe haven demand due to tensions with Iran, and a lack of progress on trade talks, to name two key issues, powered precious metals to new heights. 

Spot gold and silver both peaked in early September at a respective $1,552.00/oz and $19.67/oz. Taking a long-term view of silver and gold prices reveals that the precious metals move in almost identical patterns. Over the last year gold and silver have each gained about 25% (trough to peak); over the last five years gold gained 45% to silver’s 40%.