Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Wednesday, December 28, 2022

Despite the War in Europe, Gold Remains Below Its 2011 High / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

Can gold's recent short-term rally be considered bullish, or can we expect a decline like in 2008?

Is Silver Really Strong?

Gold and silver are moving higher today, but nothing really changed despite that. Silver moved to its previous highs, while gold didn’t (chart courtesy of https://GoldPriceForecast.com).

Monday, December 26, 2022

Gold Price Upleg Still Young / Commodities / Gold & Silver 2023

By: Zeal_LLC

Gold has been powering higher on balance for a couple months now, surging to major breakouts.  That upside momentum is improving sentiment, with traders growing more bullish on gold’s potential.  That is well-placed, as this upleg remains young.  Major gold uplegs are three-stage events, each having distinct drivers.  The first and smallest stage isn’t even finished yet, which bodes very well for gold and its miners’ stocks.

The yellow metal’s latest upleg was stealthily born at panic-grade lows in late September.  Over the next 2.8 months into this week, gold powered an impressive 12.1% higher!  Yet that remains small and young by recent-upleg standards.  Gold’s previous four uplegs in the last few years averaged way-bigger 28.8% gains over much-longer durations of 7.9 months.  This current upleg is likely only getting started, with a lot to prove.

Major gold uplegs evolve through three stages of specific buying from particular traders.  They are born when gold-futures speculators buy to cover short contracts, which is stage one.  After gold falls to deep lows, some catalyst spooks these guys.  So they rush to close out their risky hyper-leveraged downside bets, which is legally required.  That buying soon becomes self-feeding, catapulting gold sharply higher.

Friday, December 23, 2022

The Breakout That’s REALLY Important for Gold / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

Since the gold market now shows parallels to 2008 and 2013, what can we expect if the correction has just ended?

The USDX's Breakout

The changes that we saw on the charts yesterday were not enough to change anything that I described yesterday, so those comments remain up-to-date. Also, what I covered during yesterday’s live event (I combined the live market analysis with the presentation about the top 3 gold trading techniques – you can see the recording here) remains up-to-date at the moment of writing these words.

Friday, December 23, 2022

Central Banks Wary of U.S. Are Loading Up on Gold / Commodities / Gold & Silver 2023

By: MoneyMetals

Investors got some superficially good news on the economy this week. But it turned out to be bad news for markets.

Although they’ve bounced back a little today, equities and precious metals markets sold off on Thursday following government data showing that the economy grew faster than expected in the third quarter. GDP was revised upward to a 3.2% annual pace from July through September.

Of course, a lot has happened since then, including additional rate hikes by the Federal Reserve. It will be well into next year before the full impact of higher borrowing costs get reflected in the economy.

Friday, December 16, 2022

Gold Defies Hawkish Fed / Commodities / Gold and Silver 2022

By: Zeal_LLC

Gold defied another hawkish Fed decision this week, consolidating high in its immediate wake.  That was an impressive show of strength, after this extreme Fed tightening cycle hammered gold for a half-year or so.  That strong performance reflects gold-futures speculators’ weakening resolve to keep shorting.  With their long-side selling exhausted, they have massive mean-reversion buying to do which is super-bullish for gold.

Gold was looking really good technically heading into this week’s latest Federal Open Market Committee meeting.  Since late September, it had blasted 11.5% higher in a powerful rebound on big gold-futures short-covering buying.  That catapulted gold back above its key 200-day moving average on FOMC eve, by the most since mid-June.  Gold was a hair away from a decisive 200dma breakout, after escaping its downtrend.

The FOMC decision itself wasn’t a surprise, with the Fed hiking its federal-funds rate by 50 basis points.  That was a sharp slowdown from the streak of monster 75bp hikes executed at its previous four meetings.  The FOMC statement was virtually unchanged from its last iteration in early November.  With this week’s 50bp hike universally expected, that didn’t faze gold-futures speculators.  They focused on something else.

Once a quarter after every other FOMC decision, the Fed releases its Summary of Economic Projections by individual top Fed officials.  This is better known as the dot plot, since it shows where they see FFR levels heading in the future.  Though notoriously unreliable in predicting where the FFR is actually going according to the Fed chair himself, traders lap that up.  This week it proved more hawkish than expected.

Monday, December 12, 2022

Gold And Silver May Be The Outperforming Assets For 2023 / Commodities / Gold & Silver 2023

By: Avi_Gilburt

When I was younger, I was taught that if you cannot say something nice, don't say anything at all. Well, when many of you have asked why I have not written about metals in quite some time, now you know the reason. But, I think that's about to change.

Before we begin, I want to give you a little background about my history in the metals market.

For those who may not remember the action we experienced in the metals market back in the summer of 2011, the market was going parabolic at the time, with some days seeing $50 increases. And the only arguments at the time were regarding how far beyond $2,000 gold was going to take us.

Sunday, December 11, 2022

As Inflation signals fade, the Gold Mining Stocks sector outperforms / Commodities / Gold and Silver Stocks 2022

By: Gary_Tanashian

The gold mining sector is doing what it should do amid fading inflation

If you have tuned out inflationist gold bugs since mid-2020 you are now in position to capitalize, unlike scores of inflation bugs who’d already bought (and likely sold into tax loss season, 2022).

Readers of nftrh.com have seen this space write many times how gold is not about inflation. At least not primarily. That compounds with the gold miners, which leverage gold’s standing within the inflated (and periodically deflated) macro. The gold mining sector is not about inflation. As in 2003-2008 the gold miners can rise during an inflationary phase, but as in Q4, 2008 they would then be summarily executed due to poor accumulated fundamentals.

The correction in the gold mining sector from mid-2020 into Q4 of this year was entirely normal to this analysis. What is (or should be) abnormal is excuse making and ghost stories about conspiracy and manipulation to explain why gold miners did so poorly. As you probably know, there is a lot of that out there. It’s tradition in the precious metals complex.

Sunday, December 11, 2022

Demand For Gold – No New Highs / Commodities / Gold and Silver 2022

By: Kelsey_Williams

As investors and others continue to jockey for position in order to announce that “the bottom is in for gold” or that “gold owners received an early Christmas present” or “crypto failures will translate to higher prices for gold”, it is clear that most of them are thinking that increased demand for gold will drive its price higher.

That is not the way it works.

FACT NO. 1  The price of gold is NOT driven by demand for gold. 

FACT NO. 2  The price of gold tells us NOTHING about gold. 

Thursday, December 08, 2022

Since the Gold Rally Has Stopped, Can a Reversal Be Expected? / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

Gold’s rally was just stopped by the resistance provided by its previous high and its 60-week moving average. Will gold now reverse?

Thursday, December 08, 2022

Crude Oil Drops to a New Year Low – What’s Happening? / Commodities / Crude Oil

By: Paul_Rejczak

Here’s how to make sense of the different figures reported by the Energy Information Administration (EIA).

Macroeconomics

From a macroeconomic point of view, the US dollar index (DXY or USDX) has maintained its downward trend within its recent regression channel, probably still eyeing the next quarterly S2 pivot just located at the $100 mark.

Wednesday, December 07, 2022

Invalidations Across the Market Have Major Implications for Gold Price / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

The invalidations of breakouts and breakdowns are strong signals in the opposite direction, and we just saw them throughout the market – also in gold.

Tuesday, December 06, 2022

Gold Bullion’s Under-Appreciated Feature: It Will Never Go to Zero / Commodities / Gold and Silver 2022

By: MoneyMetals

Physical gold and silver will never become worthless. This fact does not make for much of a marketing pitch. But given recent events, this is a much more important feature than it looks at first glance.

Americans, and investors around the world, live in an age of collapsing confidence in institutions. The bubble economy built on zero interest rates by out-of-control central bankers appears to be in danger of implosion.

Companies can fail, and their share prices can go to zero. Bond issuers can default on their debt. This happens rarely in strong economies, but it can happen wholesale when bubbles pop.

Friday, December 02, 2022

HUI Gold Stocks Rally Hits Target / Commodities / Gold and Silver Stocks 2022

By: Gary_Tanashian

The HUI rally has hit the logical resistance target where the 200 day moving average meets clear lateral resistance. It has done so in a not particularly overbought fashion due to the chop and grind it took to get here off the lows of the shaded bottoming pattern that we established and tracked in NFTRH over the last several weeks.

Tuesday, November 29, 2022

SILVER INVESTORS – MONEY TO BURN? / Commodities / Gold and Silver 2022

By: Kelsey_Williams

Over the past two years, there have been some wild and crazy things happen with regard to premiums charged and paid for various physical silver investment products. For the privilege of owning silver in certain specific forms, investors are paying through the nose; and, apparently, willingly so. WHY? Is the cash burning holes in their pockets?

I just completed a review of current market premiums for both silver and gold products. It shouldn’t be a surprise as to what particular product heads the list for the most expensive premiums. Investors are having a torrid love affair with U.S. Silver Eagles.

Tuesday, November 29, 2022

Crude Oil: Why You Should Look Beyond Supply / Demand / Commodities / Crude Oil

By: EWI

The primary regulator of the rises and falls in oil's prices is market psychology

As I write on the morning of Friday, Nov. 18, crude oil is on track for its second weekly decline.

The financial media usually finds "reasons" for a market's price action that are rooted in "market fundamentals," and this decline in oil's price was no exception.

On Thurs., Nov. 17, a CNBC headline noted:

Oil falls on easing geopolitical tension, China demand outlook

The gist of the story was that a rising number of COVID-19 cases in China would contribute to a lower demand for crude oil in the world's second largest economy; hence, the falling prices.

Sunday, November 27, 2022

Why Silver Price 'Should Resume Upwards Path / Commodities / Gold and Silver 2022

By: Clive_Maund

Expert Clive Maund reviews silver's 4-month, 1-year, and 5-year charts to tell you where he believes the future is headed for this precious metal.

When the dollar broke down over a week ago, silver joined gold in breaking higher, as we can see on its 4-month chart below, and now we are seeing a normal post-breakout reaction as the dollar rallies somewhat to relieve the extreme condition that resulted from its steep lunge.

Once the dollar’s relief rally is done, silver should resume the upward path.

Sunday, November 27, 2022

US Bond Market and Gold / Commodities / Gold and Silver 2022

By: Gary_Tanashian

For someone who uses the bond markets as important indicators to the macro analysis, I am the furthest thing from an astute bond trader and am certainly not a bond investor. This probably owes to the fact that my earliest (gold bug) training in the markets was with an eye toward the dangers of debt in a fiat driven system.

In other words, how could I take seriously the debt of a government hopelessly in multi-trillions of dollars in debt and adding to it all the time? That is what a bond as an investment is, a call on the debt of, in this case, a supposedly high quality entity (the US government). No thank you.

Though I am not well liked in some corners of the gold promotion err, analysis business, I consider myself today to be a full on gold bug just as I did 20 years ago. Nothing has changed because gold does not change. It has remained a steady literal and figurative rock within the financial system for years, decades and centuries. It’s what confidence in risk assets – including bonds – is measured by.

Sunday, November 27, 2022

Gold and Silver Post Breakout Reaction Provides Another Buying Opportunity / Commodities / Gold and Silver 2022

By: Clive_Maund

With the breakdown of the U.S. dollar, expert Clive Maund reviews charts for gold, copper, and palladium to tell you where he believes the metals are headed and which he thinks you should buy.

The last update was prescient as it called for a major breakdown in the dollar and breakouts by gold and silver, all of which happened just days later. If this were 2010 or 2011, this update would have generated considerable interest and numerous emails, but today nothing — it was greeted with a yawn.

This means one of two things or a combination of the two – either American investors or others are now broke and have no money to invest. Hence no interest or sentiment towards the precious metals sector is now so negative after recent underperformance that there is no enthusiasm for it.

I believe that the explanation is largely the latter reason, in which case it is exceedingly bullish because the more negative the sentiment towards a sector, the more upside potential it has, and I saw an article or video confirming this a few days ago because it described the rally this month as a “bull trap.”

Thursday, November 24, 2022

Could Bitcoin’s Movements Indicate the Fall of Junior Gold Stocks? / Commodities / Gold and Silver Stocks 2022

By: P_Radomski_CFA

While comparing gold and bitcoin gives some idea of the patterns in the market, can the slide of junior miners be predicted by the same method?

Those of you who have been following my analyses for a while may be expecting me to write that it is based on the stock market's rally and thus only temporary, as miners will follow gold sooner rather than later. That’s their ultimate source of revenue (current or expected). While that’s true, right now there is another huge factor that’s likely contributing to the situation.

It's most likely the unfolding crypto-drama.

Remember when I previously commented on the link between juniors and cryptocurrencies? What I wrote back then was particularly important with regard to the less known (obscure?) ones with a shady background. In fact, some even call them “shitcoins.”

Thursday, November 24, 2022

Winter Is About To Wake up the Natural Gas Price / Commodities / Natural Gas

By: The_Energy_Report

An unusually warm October has helped natural gas inventories, but gas prices don't seem to believe it. Oil has seen three days of heavy selling volume ending with a hammer candle stick Monday. Birchcliff, Callon, and Earthstone should benefit.

Gold stocks have started a new bull market. The question is, will the gold price confirm it?

The HUI index ran from a low of 180.41 on November 3, 2022, to a high of 224.88 on November 10, 2022, which is a +24.6% move. The gold stocks often lead to a move in gold, and the gold price did move from US$1631 to US$1775 in the same time frame.