Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Saturday, January 07, 2023
What Triggered Silver Price Hiccup on the 5th of January? / Commodities / Gold & Silver 2023
By: Arkadiusz_Sieron
Fed officials flexed their muscles during the last FOMC meeting. Silver tripped and fell in response, but that didn’t last long – why?The hawkish force was strong with this FOMC! The minutes from the last meeting of the Committee in December offered almost no dovish signals. In particular, the document doesn’t mention anything about the Fed’s pivot. Actually, we can read that “no participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023”. That’s bad news for the precious metals, such as silver and gold.
What’s more, the minutes revealed the FOMC participants’ worries about the dovish hopes of investors. The Fed decided to emphasize that it’s not going to change its monetary policy and cut interest rates anytime soon, so investors shouldn’t bet on such a scenario. As the key paragraph says,
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Wednesday, January 04, 2023
Is the US Dollar Building Strength to Push Gold Prices Down? / Commodities / Gold & Silver 2023
By: P_Radomski_CFA
The USD Index is a key driver of gold prices (apart from real interest rates). How much strength has it shown recently?
In yesterday’s analysis, I compared the current situation in the precious metals to the one in stocks that we saw last year. It appears that the similarity remains up-to-date as gold is up in today’s pre-market trading (at the moment of writing these words).
As you may recall, last year, stocks didn’t decline until the second session of the year. Of course, the history doesn’t have repeat itself to the letter, but I wouldn’t make too much of the upswing in the first few days of the year. Here’s what we wrote about this matter yesterday:
Do you remember the “January rally” that we saw in early 2022? It lasted less than two days. Stocks moved higher in the first session of the year, and they formed an intraday top during the second session of the year.
Monday, January 02, 2023
Outrageous Gold Price Prediction for 2023 by Saxo Bank / Commodities / Gold & Silver 2023
By: Arkadiusz_Sieron
Gold will rocket to $3,000 next year – at least that’s what Saxo Bank says. Does this prediction make any sense though?Did you hope gold would break finally $2,000 in 2023? What if I told you that gold is going to soar to at least $3,000? Have I gone mad? No; that’s not my forecast, I only summarize the Saxo Bank’s Outrageous Predictions for 2023.
According to the publication, next year, the markets will finally discover “that inflation is set to remain ablaze for the foreseeable future”. In the spring, China will fully pivot away from its zero-Covid policy, unleashing demand and a new surge in commodity prices. Inflation will soar again, but this time it will coincide with the Fed’s easy monetary policy amid elevated market volatility and a recession. It will then become clear that the US central bank will fail on its 2% inflation mandate, sending gold prices much higher. The yellow metal is said to be additionally supported by the rising global liquidity and “geopolitical backdrop of an increasing war economy mentality”.
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Saturday, December 31, 2022
Gold Is It Weird to Have Two Corrective Upswings Instead of One? / Commodities / Gold & Silver 2023
By: P_Radomski_CFA
Here's how history rhymes in the precious metals market and what we can glean from recent movements in gold, silver, and mining stocks.
History tends to repeat itself. Not to the letter, but in general. The reason is that while economic circumstances change and technology advances, the decisions to buy and sell are still mostly based on two key emotions: fear and greed. They don’t change, and once similar things happen, people’s emotions emerge in similar ways, thus making specific historical events repeat themselves to a certain extent.
For example, right now, gold stocks are declining similarly to how they did in 2008 and in 2012-2013.
This is an extreme underperformance of gold stocks, similar to what we saw in 2013 before the worst of the slide. This is an extreme underperformance of gold stocks – something that we’ve also seen in 2013 before the biggest part of the slide.
Saturday, December 31, 2022
Gold Will Reflect Inflation 2023 / Commodities / Gold & Silver 2023
By: Zeal_LLC
Gold largely ignored inflation raging out of control in 2022. Despite the first inflation super-spike since the 1970s, history’s ultimate inflation hedge disappointed. But that unsustainable anomaly driven by extreme Fed rate hikes catapulting the US dollar parabolic won’t last. Inevitably prevailing gold prices will adjust much higher to reflect this red-hot inflation fueled by epic money-supply growth. That’s very bullish for 2023.
During this past year, the primary US inflation gauge recorded extremes not seen in four decades. The monthly headline Consumer Price Index averaged blistering 8.1% year-over-year surges, never printing lower than 7.1%. June 2022’s staggering 9.1% peak proved the hottest CPI since way back in November 1981, fully 40.6 years earlier! And the CPI has been heavily watered down since, lowballed for political reasons.
Such serious inflation should’ve lit a fire under gold, fueling massive investment demand. Gold got off to a strong start in 2022, surging up 12.1% year-to-date in early March. But that was a geopolitical spike on Russia invading Ukraine, which wasn’t sustainable. From there gold collapsed 20.9% over the next 6.6 months into late September. That left it down a shocking 11.3% YTD in the worst inflation year since 1981!
That gaping gold-inflation disconnect made no sense, leaving investors increasingly bearish. But gold’s brutal mid-2022 plunge was an extreme anomaly driven by the Fed scrambling to stuff that inflation genie back in the bottle. Between mid-March to early November, the Federal Open Market Committee hiked its federal-funds rate an astounding 375 basis points. That included a shocking streak of four monster 75bp hikes!
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Saturday, December 31, 2022
Gold, Silver, & Platinum Had a Good New Year 2023 / Commodities / Gold & Silver 2023
By: MoneyMetals
Precious metals markets are finishing out a choppy 2022 on an up note. A strong fourth quarter is pushing both gold and silver prices back up into positive territory for the year.
The yellow metal got off to a hot start in 2022, reaching as high as $2,050 an ounce in March. But it suffered a severe pullback in the second and third quarters. A rising U.S. dollar exchange rate amid aggressive Federal Reserve rate hikes drove futures traders to dump precious metals contracts.
In recent weeks, the Federal Reserve note dollar has begun trending lower versus foreign currencies – spurring the gold market to pick up some steam.
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Saturday, December 31, 2022
Silver: What Happened in 2022, and What Could Happen in 2023? / Commodities / Gold & Silver 2023
By: Arkadiusz_Sieron
It was an especially intense year, and silver held on tight. If 2023 is even more intense than 2022, silver won’t have a choice but to rally.A lot has happened this year. Russia invaded Ukraine. North Korea fired off missile after missile. Latin America turned to the left. The United Kingdom lost a queen, gained a king, and saw three Prime Ministers in Downing Street. President Xi Jinping was re-elected for an unprecedented third term as the General Secretary of the Communist Party of China, cementing his grip on power. Protests have been raging across Iran. The world population crossed 8 billion. On a personal note, my favorite sportsman and probably the best tennis player in history, Roger Federer, ended his brilliant career.
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Friday, December 30, 2022
What Signals Do Gold, Silver, and Stocks Send to Investors? / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
While the statistics scream, investors, often blinded by emotions, do not hear them. However, since history seems to rhyme, what do gold, silver, and mining stocks have in store for us?
What a boring month!
At least for those who monitor the performance of junior mining stocks. It’s Dec. 29, and the monthly price change for the GDXJ ETF is $0.15 (0.41%). That’s how much higher the GDXJ is now than it was at the end of November. That’s next to nothing – almost a “statistical error.”
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.
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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.
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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.
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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.
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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.
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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?
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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.
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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.
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