Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Saturday, January 25, 2020

Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell / Commodities / Gold & Silver 2020

By: Gary_Tanashian

I most often use linear scale charts for stocks, markets and indicators for their more absolute views. But in the case below we conjure up a long-term log scale chart showing the Gold/Silver Ratio (GSR) and the S&P 500 (SPX), as it works better in providing a percentage-based relationship between an indicator of market liquidity and inflation when declining and lack of liquidity, deflation or… it has to be said, Goldilocks, when rising.

Now, when viewing the most recent Goldilocks phase, where SPX has gone in positive correlation with the GSR we will have to suspend disbelief that this is anything normal or natural. It was created by will of man as first the Bernanke Fed conjured a balls out inflation out of 2008’s deflationary destruction and then as a crowning achievement, concocted Operation Twist in order to manipulate the bond market into flashing this signal… ‘Nope, no inflation here!’

Saturday, January 25, 2020

Germany Starts War on Gold  / Commodities / Gold and Silver Stocks 2020

By: Richard_Mills

Germans, like Indians and Chinese, love their gold - although their reasons for buying and keeping bullion are somewhat different. 

In China and India, gold jewelry is a status symbol - a sign of wealth and success. In Germany, owning gold bars and coins, maybe a 24-karat necklace or two, is a means of preserving wealth, especially in times of war or economic crisis, something never far from Germans’ minds, considering their history.  

Indeed the “war guilt” Germans experience over the atrocities of Nazi Germany is accompanied by fears that their government could again lose control of fiat money, as the Weimar Republic did in the 1920s, leading to devastating hyper-inflation. 

In India “a marriage is not a marriage without gold.” Indians find it auspicious to be-gift gold jewelry during the Diwali festival, which begins in October, and wedding season. Gold-shopping for the bride is thought to bring good fortune and invoke the blessings of a Hindu goddess. At nearly 20 million weddings a year, Indians’ annual demand for the precious metal exceeds 514 tonnes. Easy to see why the country’s private gold holdings are the largest in the world, a mind-boggling 24,000 tonnes. (almost as much as the world’s top 10 central bank holdings combined)

Saturday, January 25, 2020

Gold Mining Stocks Valuations / Commodities / Gold and Silver Stocks 2020

By: Zeal_LLC

The gold miners’ stocks have spent the past half-year mired in a high consolidation.  They haven’t been able to break out, but aren’t breaking down either.  This technical purgatory is working to slowly bleed off overboughtness and rebalance sentiment.  This necessary process to eradicate greed from the last upleg peak is never exciting.  But today’s low gold-miner valuations reveal great upside potential in their next upleg.

The world’s leading and dominant gold-stock trading vehicle and benchmark is the GDX VanEck Vectors Gold Miners exchange-traded fund.  It commanded $13.2b in net assets in the middle of this week, 2.7x larger than its next-biggest competitor GDXJ.  The major gold miners’ stocks included in GDX soared this past summer, blasting higher after gold’s decisive breakout to its bull market’s first new highs in several years.

GDX’s strong 29.0% surge over the next 2.5 months into early September capped a larger 76.2% upleg over 11.8 months.  Naturally last summer’s sharp rally generated much excitement and greed in this small contrarian sector.  So the gold stocks needed to correct or consolidate, either selling off deeply enough or drifting sideways long enough to restore sentiment balance.  Excessive greed is inherently unsustainable.

Saturday, January 25, 2020

Three Upside and One Downside Risk for Gold / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Our base scenario for 2020 is that it might be a worse year for gold than 2019 was. However, there are three major upside (and one downside) risks for the gold market, which could materialize in 2020. Today’s article will introduce you to these potential catalysts that could send gold prices higher (or significantly lower) in 2020.

We stated earlier that unless something bad happens, 2020 may be worse for the yellow metal than 2019, as gold fundamentals seem to have deteriorated since the last year. Of course, bad things are happening all the time, but do not result in any possible negative developments. Rather, we have in mind three downside risks to our macroeconomic outlook, or three upside risks for gold. What are they?

Friday, January 24, 2020

A Lesson About Gold – How Bullish Can It Be? / Commodities / Gold & Silver 2020

By: Kelsey_Williams

Apparently, there is no limit. This seems especially true right now with all of the “obvious” signs and indicators staring you in the face. It is almost blasphemous to speak cautiously. Better to let your imagination run wild and join in the revelry.

I can’t do that. I don’t choose to be dumped into the same cauldron of boiling fantasy with other analysts and advisors, who tout and promote based on the latest headlines. There has to be more to it. I think there is.

Some of this has to do with marketing. “Let’s make hay while the sun shines!” I get that. But I don’t like being in a large crowd when emotions grow unchecked and fundamentals are ignored.

If you are interested in attending a pep rally for much higher gold prices, move on. You won’t find it here.

Friday, January 24, 2020

Gold Report from the Two Besieged Cities / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Two cities are besieged. One by officials, activists and business leaders, while the second by bloodthirsty politicians. Will anyone escape? No one knows, but the gold coin has always helped bribe the guards to look the other way…

Just take a look at how it held value recently:

Thursday, January 23, 2020

The Next Catalyst for Gold / Commodities / Gold & Silver 2020

By: Jordan_Roy_Byrne

The precious metals sector remains in a correction, and as long as the 200-day moving averages hold, a bullish consolidation that began last September.

Sure, Gold made a new high and is still holding around the previous high, but the rest of the sector has not confirmed that strength. When Gold is outperforming Silver and the gold stocks, it is not a bullish signal for the short-term.

With that in mind, we can look ahead to anticipate potential catalysts that could push the sector into breakout mode and to new highs. 

Thursday, January 23, 2020

Silver Could Be Close To An Important Resolution / Commodities / Gold & Silver 2020

By: Hubert_Moolman

Silver is still in consolidation mode since early September, but could be close to a resolution.

Below, is chart of silver:

Wednesday, January 22, 2020

Junior Gold Mining Stocks Setting Up For Another Rally / Commodities / Gold and Silver Stocks 2020

By: Chris_Vermeulen

Our recent research suggests the US stock market may be entering a period of volatility that may include a broad market rotation/reversion event.  We believe this volatility event could begin to happen anytime over the next 10 to 30+ days.  The rally in the US stock market ending 2019 and carrying into 2020 appears to be setting up a “rally to a peak” type of price pattern. Please take a minute to review the following articles we’ve posted recently about this topic and how it relates to opportunities in Metals/Miners.

January 20, 2020: Q4 EARNINGS SETUP THE RALLY TO THE PEAK

January 15, 2020: SHIFTING UNDERCURRENTS IN THE US STOCK MARKET

The potential for a volatility spike resulting from a price peak formation (see the January 20, 2020 article above), could setup a moderately broad downside price reversion event that may prompt a 5% to 8%+ downside price correction.  If that happens, as we expect, over the next 5 to 10+ trading days, then precious metals and miners should explode to the upside as a “risk-on” trade moves capital into the metals market.

Wednesday, January 22, 2020

Debt the Only 'Bubble' That Counts, Buy Gold and Silver! / Commodities / Gold & Silver 2020

By: The_Gold_Report

Sector expert Michael Ballanger considers the last week in the stock and precious metals markets.

Ever since Sept. 19, 2008, when Hammerin' Hank Paulson appeared in front of the U.S. Congress on bended knee and begged those clueless politicians for a bailout—which he did successfully—the spread of moral hazard throughout the world has been a contagion that makes the Bubonic plague appear as harmless as the common cold.

That was, in fact, the day that shall go down in fiscal infamy as a most dangerous precedent was etched into the fabric and soul of the U.S. financial system. Not only did it set the behavioral course for the banker-politico alliance, it laid out as an insidious blueprint the operation manual for treasury departments and central banks around the world, the result being where we are today, a global economy teetering on an Mount Everest of debt with no solution on any horizon.

Tuesday, January 21, 2020

What Do Fresh U.S. Economic Reports Imply for Gold? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Latest economic data were published last week, indicating that the U.S. economy remains on solid footing. Gold prices held up relatively well – but can it last?

Recent U.S. Economic Data Show General Health

Last week was full of economic reports. Let’s analyze them. First, the CPI rose 0.2 percent in December, slightly below expectations and the 0.3-percent increase in November. But as the chart below shows, the CPI (and the core CPI as well) rose 2.3 percent over the whole 2019, which was the largest advance since the 3.0-percent rise in 2011. Yet inflation is still quite low by historical standards.

Tuesday, January 21, 2020

Gold Price Trend Forecast 2020 - Part1 / Commodities / Gold & Silver 2020

By: Nadeem_Walayat

The gold bull market ended 2019 with a strong gain of 19%. The first half the year was marked with uncertainty as the price after an early year surge to $1350 gave up all of it's gains to drift lower to trade down on the year by early May. However, this was the calm before the bull market storm and that set the stage for a powerful bull run starting early June that saw the Gold price rocket higher to a early September peak of $1566, up over 25% on the year! Igniting Gold bug fever and encouraging prominent gold bugs to get carried away with headlines of Gold heading for $5000 and beyond.

Sunday, January 19, 2020

Gold Trade Usage & Price Effect / Commodities / Gold & Silver 2020

By: Jim_Willie_CB

Some basic logic must come to the table in the Gold pricing mechanism. The easiest way to keep the Gold price down is NOT TO USE IT IN TRADE, NOR IN BANKING RESERVES, and to relegate it to the sidelines as the barbaric metal. Some deep amusement comes always in hearing that Gold does not have value, does not earn a yield, and has no uses. Watching the destruction in bond principal value leads the observer to note how Gold holds its value in times of crisis, and even rises against the general paper tide. The bond market crisis is global this time, unlike in 2008. Each debt downgrade to BBB, within the context of fallen angels, brings a realized loss in bond value. All this occurs with a rising Gold price, even with pauses for consolidation. The best way to lift the Gold price is TO USE IT IN TRADE AND IN RESERVES MANAGEMENT. The actual usage further motivates the proper value to be instilled, regardless of type of usage.

Saturday, January 18, 2020

Gold Stocks Wavering / Commodities / Gold and Silver Stocks 2020

By: Zeal_LLC

The gold miners’ stocks are wavering, frustrating traders.  For the better part of a half-year, this sector has neither broken out nor broken down.  Instead it has mostly ground sideways since the last upleg’s peak.  Gold stocks being mired in a consolidation so long, even a relatively-high one, is steadily eroding bullish sentiment.  That ups the odds it will roll over into a correction, especially considering gold’s situation.

Last summer the gold stocks were rocking, with the leading GDX VanEck Vectors Gold Miners ETF just soaring.  Following gold’s decisive bull-market breakout to its first new highs in several years in late June, GDX blasted 29.0% higher over the next 2.5 months!  That generated great bullishness, capping a larger 76.2% upleg over 11.8 months.  The major gold stocks dominating GDX were becoming belles of the ball.

That fast run left them super-overbought, so a correction was highly probable to rebalance sentiment in this hot sector.  And that indeed looked to be getting underway, with GDX retreating 15.4% over the next 1.3 months into mid-October.  The gold stocks mostly bumped along those correction lows for another 1.3 months into late November.  Then GDX rallied a bit, but kept grinding sideways on balance for most of December.

Friday, January 17, 2020

ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th / Commodities / Energy Resources

By: Chris_Vermeulen

After watching Crude Oil fall from the $65 ppb level to the $58 ppb level (-10.7%) over the past few weeks, we still believe the energy sector is setting up for another great trade for skilled investors/traders.

We are all keenly aware that Winter is still here and that heating oil demands may continue to push certain energy prices higher.  Yet Winter is also a time when people don’t travel as much and, overall, energy prices tend to weaken throughout Winter.

Over the past 37 years, the historical monthly breakdown for Crude Oil is as follows: December: Generally lower by -$0.33 to -$0.86.  Averages to the downside: -3.65 to +3.08 January: Generally lower by -$4.57 to -$6.72.  Averages to the downside: -2.68 to +2.27 February: Generally higher by +$8.41 to +13.73.  Averages to the upside +3.07 to -2.54 March: Generally higher by +7.33 to +$15.62.  Averages to the upside by +2.84 to -2.14

Friday, January 17, 2020

Platinum Breaks $1000 On Big Rally - What's Next Forecast / Commodities / Platinum

By: Chris_Vermeulen

Certain precious metals, Gold, Silver, and Platinum, have shown moderate upside price trending over the past 20+ months while Rhodium and Palladium have skyrocketed higher.  These more precious metals, Rhodium and Palladium, have many industrial and consumer uses.  Rhodium is used in electronics and plating and Palladium is used in a variety of consumer products from Automobiles to Medical Devices.

Still, the rally in Rhodium (over 300%) and Palladium (over 70%) over the past 12 months has been more than impressive.  Whey are we not seeing a similar rally in Gold, Silver, and Platinum yet?

Friday, January 17, 2020

Precious Metals Set to Keep Powering Ahead / Commodities / Gold & Silver 2020

By: MoneyMetals

Precious metals got off to an explosive early start to 2020 as tensions between the U.S. and Iran drove safe-haven buying.

Of course, gold and silver markets will need more than a geopolitical flare up to drive a long-term bull market advance.

The question for investors is whether the fundamental picture now looks promising or fleeting.

In our view, the fundamentals are turning in favor of higher gold and silver prices.

Thursday, January 16, 2020

There Is Still Time To Get Silver / Commodities / Gold & Silver 2020

By: Hubert_Moolman

Silver appears to be very close to an even bigger move higher. Most of the hard work of the double-bottom since 2015 is done.

The coming leg higher is the one that will likely take prices to all-time highs. Below, is a long-term Silver chart:

Thursday, January 16, 2020

Another Repo Market Liquidity Injection for Gold Bulls to Cheer / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Last Thursday, the New York Fed added more than $80 billion in fresh temporary liquidity to the financial markets. Move over folks, nothing to see here – but what does it mean for gold prices?

Repo Crisis Is Not Over

Last week on Thursday, the New York Fed added $83.1 billion in temporary liquidity to financial markets. And banks’ demand for liquidity flared up again on Tuesday. If you haven’t heard of it, don’t worry – almost no one did. After all, journalism is about covering important stories… with a pillow!

The Fed not only injected some fresh liquidity, but also noted that it “may keep adding temporary money to markets for longer than policy makers had expected in September,” at least through April. So much for the normalization of monetary policy…

Wednesday, January 15, 2020

Silver Traders Big Trend Analysis – Part II / Commodities / Gold & Silver 2020

By: Chris_Vermeulen

This, the second part of our Silver research article suggesting Silver may be forming a massive price base in preparation for an explosive upside move, will continue from Part I of this research series.

Our research team believes Silver is setting up in a price pattern that may already be “ripe” for an explosive upside move.  Our researchers have poured over the data and believe the disparity between Gold and Silver is already at excessive levels. 

Historically, anytime the disparity between Gold prices and Silver prices (rationalized into comparative Gold price levels) breaches 30% to 60% and Gold begins an upside price advance, Silver typically begins to move higher with 4 to 8+ months.  This setup pushes the Gold to Silver ratio back below 50 or 60 as Silver rallies substantially higher, and faster than the price of Gold.