Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Saturday, October 26, 2019

Will Central Banks Prevent Recession and Push Gold Down? / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

Trade wars, geopolitical tensions and slowing economic indicators. Both the ECB and the Fed have recently cut interest rates to stimulate slowing growth, hoping to escape possible recession. Will they succeed? After all, they don’t have the most reliable record when it comes to preventing busts. Let’s get into the central flaw of central banking and what it implies for gold.

Both the ECB and the Fed have just cut interest rates to stimulate slowing growth and to escape possible recession. Will they succeed? The question is, of course, rhetorical. The recovery from the Great Recession has been the slowest postwar recovery, despite the massive monetary (and fiscal) stimulus, as the chart below shows.

Saturday, October 26, 2019

Silver & Gold to Inform Dr. Copper and so, the Macro / Commodities / Gold & Silver 2019

By: Gary_Tanashian

They call copper the metal with the Ph.D. in Economics. But these days Doctor Copper is little more than a quack in that regard, taking a cue from the metals whose interplay will be critical to deciding the coming macro for 2020 and the run up to the next US election. Thus, they are the 3 Metallic Amigos, riding together but providing different signals at different times (this being nftrh.com, you will have to put up with the odd shtick from time to time).

As we have noted repeatedly, the Silver/Gold ratio takes it place alongside other indicators (like long-term Treasury yields, yield curve, TIPs ratios, inflation breakevens, etc.) of a would-be inflationary environment. When silver (more cyclical, commodity-like characteristics) rises vs. gold (more counter-cyclical, liquidity haven characteristics) it is a hint toward an inflationary macro.

A daily chart of silver/gold shows a constructive ratio at yesterday’s close and this morning in pre-market silver is +2.77% while gold is +.77%. The implication could well be an end to the current bull flag consolidation at the moving averages and the next upturn in silver/gold, the miners and possibly the inflation/reflation trades that tend to follow.

Friday, October 25, 2019

Gold, Credit And The Coming Financial Collapse / Commodities / Gold & Silver 2019

By: Hubert_Moolman

Since 2016, the US Monetary Base has declined by about 23.68%. This is the deepest and longest decline since the Federal Reserve was formed. This should not be ignored.

The last time there was a decline close to this magnitude,there was a sharp deflationary recession. That was the one that occurred from 1920 to 1921.

Below, is a long-term chart of the Monetary base that goes back to 1918:

Thursday, October 24, 2019

Gold, the Shining Star Among Commodities / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

Gold is the most effective commodity investment, yet it is under-invested, the WGC reports. What makes it special and deserving of our focus? And how to translate that focus into an appropriate allocation within one’s portfolio?

Gold is Unique Commodity. Or… Maybe Not?

Gold is often included into commodities. It seems natural, gold is a metal, after all. And just like other raw materials, it is used in the production of manufactured goods. But gold is much more than that. According to the recent report published by World Gold Council, there are six features which differentiate gold from other commodities:

Thursday, October 24, 2019

Divergence of Gold And Bitcoin – Which Represents A True Safe-Haven? / Commodities / Gold & Silver 2019

By: Chris_Vermeulen

Recently, Mark Zuckerberg appeared before the US Congress to discuss his new Libra project and to attempt to calm concerns related to his new global alternate currency project.  It appears this project is putting global political leaders in a particularly powerful position of either accepting the Libra project as a viable future solution and implementing new laws and regulations in support of it or to shelve the idea while they consider the local and global risks associated with a project that creates a new class of global currency. (Source: https://www.bloomberg.com)

We believe the risks associated with a massive corporate and international backed Crypto/Alternate currency are far too great, at this time, for the US government to attempt to consider with only 12+ months to go before the US Presidential elections.  This is almost like opening Pandora’s Box in terms of total global risks and outcomes.  It becomes almost impossible for the US government, Federal Reserve or any other global central bank to be able to protect its citizens from the risks associated with any type of technology collapse, fraud, hacking or any other unknown risks associated with such an idea.

Thursday, October 24, 2019

Gold’s Seasonal Outlook for Q4 / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

“What is the best predictor of future behavior? Past behavior.” And while this certainly does not always hold, there is a lesson to be learned from this adage for gold investors. Yup, a saying about behavior might be important for the precious metals market. The basic idea is that behavior can be understood as history here. And so, the best predictor of future developments could be past developments. In other words, past developments might hold some indications as to the fluctuations in the market.

In particular, market patterns might repeat over time. It might just as well be the case that investors behave in a similar manner during specific times in the year. One classic example is the period after New Year – it has been argued that the investors are optimistic at the beginning of the year and that markets could rally then. Another one are the summer doldrums – the old saying is “sell in May and go away” - meaning that people tend to tune out during the summer holidays more than at other times throughout the year. New Year and the summer do not move throughout the year. But Thanksgiving does – it is not always on the same day. The same goes for the market. Some influences could be  difficult to pinpoint. The one we focus on is the expiration of derivatives. Futures contracts and options do not always expire on the same day in the month. And so to account for them is slightly more complicated. Even more so if you would like to combine classic seasonal patterns with the expiration of derivatives.

Thursday, October 24, 2019

The Duel Between Johnson and Parliament. Will Gold Win? / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

Boris Johnson struggles to push the Brexit agreement through the British Parliament. For it can bite back! Who wins this battle? One could hope that gold, but this is not so certain…

Johnson’s Struggle, Explained

On Thursday, the breaking news came out that the EU and the UK reached agreement on Brexit. The agreement scrapped the Irish backstop that had formed the bulk of the opposition to the former proposals. Naive who believed that it would change something! We have to admit that we thought for a while that finally the Brexit saga was coming to an end.

But the British government still has a long way to go! On Saturday, the Parliament voted for a change to the sequencing of the ratification of the deal. It means that they withheld support on Johnson’s Brexit deal until all the necessary legislation is passed. In this way, the lawmakers forced the prime minister to write a letter to the EU requesting a delay until January 31.

Thursday, October 24, 2019

Making Money Trading Oil: A Slippery Investment or Black Gold? / Commodities / Crude Oil

By: Boris_Dzhingarov

Wednesday, October 23, 2019

Gold Prices Stand to Rally on Brexit Delay / Commodities / Gold & Silver 2019

By: Submissions

With the odds of a Brexit deal by the October 31 deadline declining, gold bulls may stand to benefit.

The price of gold has been in a narrow range over the past session with support at $1479 drawing buyers while the shiny metal continues to struggle to rally above the psychological $1500 level.

Gold prices have been held higher by a weaker dollar as of late while at the same time suppressed by positive developments in the US-China trade war and progress in Brexit. But that could change quickly.

Wednesday, October 23, 2019

Yes, Gold “Just Sits There” and That’s Quite a Feat / Commodities / Gold & Silver 2019

By: MoneyMetals

The Wall Street Journal’s Jason Zweig famously referred to gold as a “Pet Rock” in 2015. He was blasted by people who understand that gold is no passing fad, and it serves some very important roles in an investment portfolio.

The valuable roles played by gold have been well covered here. It’s a hedge against both inflation and deflation, it represents true diversification for portfolios stuffed with conventional securities, and it is a way of protecting wealth during tumultuous times.

But Jason Zweig, Warren Buffett and other notable gold critics who complain about the metal “just sitting there” fail to understand the flaw in their basic assertion.

Wednesday, October 23, 2019

Gold Price Has Not Corrected Enough / Commodities / Gold & Silver 2019

By: Jordan_Roy_Byrne

Precious Metals enjoyed a very strong move this past summer. Both Gold and gold stocks broke past multi-year resistance and showed the kind of positive momentum that has been lacking for years. 

But strong momentum coupled with major technical resistance set in, along with a temporary shift in fundamentals, thus creating a roadblock and a correction. The precious metals complex has corrected some but our work argues they’ve not corrected enough.

First, let’s take a look at Gold and gold sentiment.

Saturday, October 19, 2019

The Gold Stocks Correction and What Lays Ahead / Commodities / Gold and Silver Stocks 2019

By: Gary_Tanashian

What’s In Play Now

It has been about 2 months since the gold stock sector, as represented by the HUI index, topped out. The ensuing correction has been a whipsaw affair of ups and downs, but smoothing that volatility out we find an ongoing correction in time and price that has not been too difficult to manage.

The pattern that some would call a “complex H&S” (TA-speak for a freakish pattern with too many shoulders) held a key lower high on the recent bounce to the daily chart’s SMA 50 (blue line). The neckline has been tested (and held) twice since it was created in September and the negative RSI divergence that began last summer has been guiding Huey downward.

Saturday, October 19, 2019

Gold during Global Monetary Ease / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

Another round of global monetary easing has just begun! More than 30 central banks around the world have cut interest rates this year so far. The Fed and the ECB are certainly among them. Should gold investors look forward to these policies playing out? Let’s find out how gold tends to behave during such an extraordinary period!

Ladies and Gentlemen! Another round of global monetary easing has just begun! More than 30 central banks around the world have cut interest rates this year amid trade wars and slowing economic growth and subdued inflation. The Fed cut the federal funds rate twice this year, each time by 25 basis point. In September, the ECB cut its deposit rate from minus 0.4 percent to minus 0.5 percent and reintroduced its quantitative easing, while the People’s Bank of China cut the reserve ratio by 50 basis point to 13 percent for large banks, the third time this year, releasing about $126 billion in liquidity to support the slowing economy. In August, the Reserve Bank of New Zealand surprised investors with 50-basis point interest rate cut. The central banks of Hong Kong, Thailand, Mexico, Turkey and Russia also have cut rates recently, while the Bank of Japan may join the club soon.

Thursday, October 17, 2019

Signs Still Point To Lower Levels In Precious Metals / Commodities / Gold & Silver 2019

By: Avi_Gilburt

Originally published on Sat Oct 12 for our ElliottWaveTrader members: While we have been tracking the metals market for the next rally set-up, we have seen some signs that the market may attempt to begin that rally sooner rather than later. However, I have to be honest in noting that I am seeing more signs that lower levels may still be struck before we are ready for that rally.

So, as I have been saying for the last few weeks, I am going to still treat the market as likely needing more of a corrective downside structure before we begin the next rally phase – until the market is able to prove otherwise.

Wednesday, October 16, 2019

$100 Silver Has Come And Gone / Commodities / Gold & Silver 2019

By: Kelsey_Williams

In January 1980, the price of silver peaked at just under $50.00 per ounce. From its low in October 1971 at $1.27, silver had risen thirty-nine fold in little more than eight years.

There was talk about higher silver prices, as much as $100.00 per ounce and more. Yet, only a few months later, silver was down to $10.00 per ounce. That amounted to a decline of nearly eighty percent from its peak.

Silver bulls were not deterred, however. They continued to stress the “fundamentals” which would lead to higher silver prices, but their dreams turned into nightmares. The price of silver continued to fall.

Wednesday, October 16, 2019

Where Next for Oil After Its Double Reversal? / Commodities / Crude Oil

By: P_Radomski_CFA

Crude oil bounced from its yesterday’s lows, and the oil bulls rebuffed another attempt to move lower earlier today. Does that mean that the upswing can continue now, or a cautious approach would win the day?

Tuesday, October 15, 2019

Gold, the Ultimate Safe Haven Asset. A Looming Nobel Prize? / Commodities / Gold & Silver 2019

By: Arkadiusz_Sieron

Yesterday, the Nobel prizes in economics were awarded. Unfortunately, gold has been omitted and got nothing. How unfair! But looking at the Dutch central bank press release, gold would have much higher chances if they were the ones granting the prizes and not the Swedish central bank!

2019 Nobel in Economics and Gold

Yesterday was a big day! At least for all those boring economists and similar bean-counters. The Nobel Prize in economics was awarded. Abhijit Banerjee, Esther Duflo, and Michael Kremer became 2019 laureates for their experimental approach to alleviating global poverty.

Tuesday, October 15, 2019

The Many Aligning Signals in Gold / Commodities / Gold & Silver 2019

By: P_Radomski_CFA

Precious metals moved strongly on Friday, and did so on significant volume. The reversals we have seen on Thursday got resolved with a heavy thud. Let’s dive into the many charts and perspectives and explore how well they support the upcoming move across the sector.

Let’s start this week with a bigger update on multiple gold charts. There are so many reasons due to which gold is likely to decline in the following months - we’ll start with last week’s closing day analysis.

Tuesday, October 15, 2019

Market Action Suggests Downside in Precious Metals / Commodities / Gold & Silver 2019

By: Jordan_Roy_Byrne

At present, there could be a number of positive developments for precious metals.

Last Friday, the US Dollar cracked lower and could be at risk of lower levels into year end.

Days earlier the Federal Reserve announced new “QE-like” measures just as they told us it was not really QE. 

In addition, the market is showing a nearly 68% chance of a rate cut later this month. 

Monday, October 14, 2019

Gold Perspective is Everything / Commodities / Gold & Silver 2019

By: Rambus_Chartology

Perspective is everything when it comes to the markets. It is always most important to look at the long term charts first and then work your way back to the shorter timeframes. Long term charts also show where major support and resistance resides that can have a calming affect on ones emotions when the inevitable corrections take place.

Its been several months or so since we last looked at this 30 year quarterly chart for Gold that gives us very clear roadmap of how the price action may play out over the intermediate to longer term. Looking at the massive double bottom which launched Gold’s 2000’s bull market you can see there were three quarters of price action that took place on the breakout above the double bottom trendline with the final backtest occurring during the 3rd quarter of the breakout.