Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Thursday, June 30, 2022
Central Banks Plan To Buy More Gold In 2022 / Commodities / Gold and Silver 2022
By: Travis_Bard
While gold and silver prices have fluctuated somewhat of late, both assets were performing a little more solidly throughout US trading last week.
In fact, August gold futures were up by around $6.90 at $1,828.10 by Wednesday last week, while July Complex silver futures increased by $0.054 to $20.86 per ounce during the same timeframe.
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Wednesday, June 29, 2022
Rebounding Crude Oil Gets Far Away from the Bearish Side / Commodities / Crude Oil
By: Submissions
Demand for crude oil is accelerating – a bullish sign for its prices. What may the current energy market environment say about the black gold’s outlook?
A Chinese Panda’s Appetite
On the Asian continent, the lifting of health restrictions in China could signal resuming oil demand for the world’s top consumer. Given the context of tight supply, this has partially triggered a rebound in crude while driving prices higher.
Geopolitical Scene
The Libyan National Oil Company (NOC) warned that they could declare a state of "force majeure" on the facilities in the Gulf of Sirte – blocked due to the political crisis that has been hitting the country for months.
In Ecuador as well, the spectre of a halt in oil production is becoming clearer following the blockades and demonstrations initiated by a movement protesting the rise in the cost of living.
Tuesday, June 28, 2022
GOLD STOCKS ARE WORSE THAN GOLD / Commodities / Gold and Silver Stocks 2022
By: Kelsey_Williams
Gold stocks latest swoon confirms what has been stated and inferred in my previous articles about gold mining shares – namely, gold stocks are a lousy investment.
The original article linked in the preceding paragraph was published in September 2016. I just finished reading it again and find no reason to edit or modify its contents.
The price of gold peaked in the summer of 2016 – shortly before my article was written and published – at $1357 oz. (monthly average closing price). At that time the GDX (ETF index of gold mining shares) peaked at 30.60.
Both gold and gold mining shares (gold stocks) have been lower and higher since then, and the past six years have seen a fair amount of volatility. Lately, both gold and gold stocks have undergone downside corrections since their most recent highs earlier this year.
So where are we now?
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Monday, June 27, 2022
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Let's not be confused by the temporary USDX weakness. Junior miners are faint and we can expect them to decline again soon.
April and May Replay?
Although history doesn’t repeat itself to the letter, it rhymes. At least that’s what tends to happen in the financial markets.
In today’s analysis, I’ll explain why I think we’re about to see another example of the above in the case of junior mining stocks. There’s a technique that suggests one thing, but there’s also another that suggests that a 1-to-1 analogy wouldn’t be as good a fit, as a slight deviation from it.
So far, the situation in the GDXJ – a proxy for junior mining stocks – has been similar to what happened in the second half of April and early May.
Saturday, June 25, 2022
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level / Commodities / Crude Oil
By: Chris_Vermeulen
The recent downward Crude Oil trend may have caught many traders by surprise. Just before the US Fed raised interest rates on June 15, 2022, Crude oil was trading above $120ppb. Less than 5 days later, it collapsed -12% and has continued to trend lower. Currently, Crude Oil is near -17% lower than recent highs.
It appears Crude Oil has confirmed resistance near $120 and is devaluing as consumers pull away from traditional driving/spending habits while the Fed aggressively attempts to burst the inflation bubble. This type of contraction in Crude Oil is very similar to what happened in 2008-09 when the Global Financial Crisis (GFC) hit – Crude Oil collapsed more than -70% after IYC started trending lower in 2007.
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Thursday, June 23, 2022
Why Are Precious Metals Considered A Good Investment? Find Out Here / Commodities / Gold and Silver 2022
By: Steve_Barker
Are you thinking about investing in precious metals? Precious metals have been considered a good investment for centuries. There are many reasons they are seen as a valuable commodity, and in this article, we will discuss some of the most important ones. From their stability to their ability to hold value over time, precious metals are an excellent choice for investors who want to protect their money. If you're considering investing in this type of asset, read on to learn why it might be a smart move.
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Monday, June 20, 2022
Gold/Gold miners fundamental checkup / Commodities / Gold and Silver 2022
By: Gary_Tanashian
As they leverage the macro, what’s good for gold is even better for gold miners
After last week’s article, in which we noted a unique move on ‘CPI Friday’ as gold and the miners put in an expected test of the lows and quickly reversed upward, unique among a world full of bearish markets…
A pivotal juncture for gold and gold stocks
…let’s take a checkup on and important fundamental consideration in the wake of FOMC and the .75% rate hike that everyone knew was coming.
But first I want to remind readers that this (NFTRH & NFTRH.com) is not a place to visit if you want to get pumped on oil, copper and general (and cyclical) commodities and resources along with gold. It is the place to visit if you want discrete commodity analysis amid cyclical/inflationary conditions and/or a guide to the proper macro fundamentals that should be in place for gold and gold stocks in their rare but unique utility as a counter-cyclical market, unlike commodities and stock markets.
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Wednesday, June 15, 2022
The Gold Market Is Getting Ready for Another Interest Rate Hike / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
As predicted, gold stocks are gradually declining. Their situation is unlikely to improve - the Fed is already planning another interest rate hike.
After yesterday’s huge slide in the PMs (GDXJ declined by over 8%!) and a sizable increase in our short positions in junior miners, gold and silver are moving back and forth, gathering strength for the next move. Or waiting for the next trigger.
They are likely to get it tomorrow (Wednesday, June 15), as the Fed is about to make another interest rate decision. The word got out yesterday that the Fed might hike interest rates by 0.75% instead of just 0.5%, and the markets reacted accordingly. Stocks and PMs fell, while the USD Index rallied.
The best part is that you knew about the bigger rate hike before almost everyone else – I wrote about that in the extra analysis that I posted/sent out on Saturday. Quoting:
The next interest rate decision is this Wednesday, and it’s probably going to be very interesting. I wouldn’t be surprised if we saw a rate hike by more than 0.5% - for example by 0.75%. This might be enough to send a message to the market that they are serious about the inflation and have positive political implications. Whether that happens or not, the following conference will likely aim to rebuild investors’ confidence in the Fed. It might or might not work with regard to confidence, but it should be enough to trigger declines in the markets (including PMs) – after all that’s how hawkish surprises work.
Saturday, June 11, 2022
Big Inflation Will Spur Gold Price / Commodities / Gold and Silver 2022
By: Zeal_LLC
Gold investment demand should be soaring with serious inflation raging, catapulting gold way higher. Yet recently it has greatly lagged fast-rising general price levels, confounding contrarian investors. But history argues this anomaly won’t last, that eventually big inflation will spur gold. Today’s terrible inflation super-spike fueled by extreme Fed money printing is the first since the 1970s, when gold rocketed up by multiples.
The most-widely-followed US inflation gauge is the Consumer Price Index. While its components and calculation methodologies have been changed countless times, the CPI’s history extends back well over a century to 1913! For an entire decade prior to April 2021, the monthly headline CPI averaged modest 1.7% year-over-year gains. That long span didn’t see a single 4%+ print, even with pandemic-lockdown disruptions.
But something changed in April 2021, when the CPI suddenly accelerated up 4.2% YoY. That proved its hottest read since September 2008, emerging from that year’s brutal stock panic. The Fed itself blamed that mounting inflation on supply-chain disruptions. The Federal Open Market Committee’s monetary-policy statement released late that month argued “Inflation has risen, largely reflecting transitory factors.”
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Friday, June 10, 2022
Crude Oil Price Trend Trajectory / Commodities / Crude Oil
By: Donald_W_Dony
Buoyed by tight world supply and higher demand, Light crude oil prices are expected to reach the first resistance level of $124.50 over the next few weeks. WTI prices are being driven by several factors. First, the summer driving season in the US, and second by the relaxation of China's Covid curbs (Chart 1).
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Friday, June 10, 2022
How Will Rising Crude Oil Prices Affect Demand and Gasoline? / Commodities / Crude Oil
By: Submissions
What are the new fundamentals for crude oil to look at this week? Could Asian demand be slowed down by Saudi Arabia raising its prices?
Crude oil prices soared earlier this week after Saudi Arabia said on Sunday it would raise crude oil prices for most regions except the United States. Just days after opening the floodgates a little wider (as announced last week following an OPEC+ meeting), Saudi Arabia wasted no time in raising its official selling price for Asia, its main market. It is worth noting that the country is one of the few OPEC members that has spare oil capacity. Thus, this decision to raise prices happens just when demand, especially in Asia, is increasing.
In the prediction contest, Goldman Sachs raised its forecast for the price of a barrel of Brent to $135 by the end of the year.
Monday, June 06, 2022
Understanding Profit Potential In Gold / Commodities / Gold and Silver 2022
By: Kelsey_Williams
An analysis of any profit potential in gold requires an understanding of gold and its fundamentals. The problem is that most folks do not understand gold or its fundamentals.“Most folks” includes investors, traders, speculators, advisors, analysts, marketers, etc.
THERE IS ONLY ONE GOLD FUNDAMENTAL
The single fundamental for gold is that gold is real money. PERIOD. Gold’s value is in its use as money.
Whereas gold is real money, the US dollar and all paper currencies are substitutes for real money, i.e., gold.
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Thursday, June 02, 2022
Where Is Gold Price Going From Here? / Commodities / Gold and Silver 2022
By: Chris_Vermeulen
After briefly reaching highs above $2000, Gold has fallen to $1785 (-14%) following the deep selling in the US major indexes throughout most of April & May 2022.
Interpretation Of The Current Consolidation In Gold
My team and I see the recent lows in Gold as similar to the April/May 2009 consolidation after the Global Financial Crisis. Also similar to the January 2013 consolidation before an extended -34% price decline took place – ending in December 2015.
The primary difference between now and then is that the US Federal Reserve is currently initiating a new round of Quantitative Tightening (QT), raising rates, while battling Inflation. In both the previous examples, the US Federal Reserve was moving aggressively into Quantitative Easing, attempting to aid in the recovery of the US & the global economy.
It seems to me, that the underlying factors driving the price of Gold have drastically changed. All it would take for Gold to break into a new trend, up or down, would be to see some new catalyst or contagion event come to life.
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Wednesday, June 01, 2022
Gold Fakeout Instead of Breakout: Is the Gold Miners’ Crash Coming? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Some analogies in the gold market that may be a hint for investors can be seen right now. If there's a 2008 rerun, what could that mean in the near term?
The precious metals market declined yesterday, and while the move is still small, it’s nice to see that our short positions in juniors are already profitable.
Something quite interesting happened in their price movement at the beginning of yesterday’s session, and that’s what I’d like to start with today.
Tuesday, May 31, 2022
Food, a Global Crisis – How bad is it going to get? / Commodities / Food Crisis
By: Richard_Mills
A comparison of this year’s grocery bills to last year’s yields a simple yet terrifying conclusion: food prices are rising at a rate beyond anyone’s imagination.
The Food and Agriculture Organization’s (FAO) food price index, which tracks the price movements of the most commonly traded and consumed food crops, recently reached its highest on record.
Most point to the exorbitant prices, like with many other commodities (i.e. oil), to the ongoing war in Europe, which has caused major disruptions to the global supply chain. Indeed, Russia’s invasion of Ukraine earlier this year triggered a series of events that blocked off some of the region’s supply routes, taking away a significant portion of the world’s food supply. The result? every category of food we consume — wheat, meat, dairy products, etc. — got more expensive.
FAO economists estimate that Russia and Ukraine together provided around 30% of the global wheat supply and 20% of maize exports over the past three years, representing a significant chunk of the global food supply. It’s been estimated that nearly 25 million tonnes of grain alone have been eliminated from the supply chain since Russia’s blockade of Ukrainian ports.
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Friday, May 27, 2022
Lower Copper price due to Chinese lockdowns is only Temporary / Commodities / Copper
By: Richard_Mills
Copper is one of our most important metals with more than 20 million tonnes consumed each year across a variety of industries, including building construction (wiring & piping,) power generation/ transmission, and electronic product manufacturing. The red metal is also a key component in transportation; electric vehicles use about four times as much copper as regular internal combustion engine vehicles.
A combination of supply disruptions, historically low copper stockpiles and higher energy costs, propelled copper to a new all-time high of $4.94/lb on Friday, March 4.
Since then, the base metal has lost momentum mostly because of lower demand in China, the world’s biggest consumer of copper end products.
The latest data shows China’s copper imports fell 4% in April, year on year, as the return of covid-19 forced lockdowns of several Chinese cities including Shanghai, hurting manufacturing and consumption.
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Tuesday, May 24, 2022
After Recent Highs, What’s Next for the Gold Junior Miners? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Signs are pointing to gold’s May rally running out of steam as the USDX reaches its short-term bottom. But how much stamina is left in the yellow metal?
Another day, another higher close in the junior miners. And another day where profits on our long positions in the latter increased. There is a sign that the rally in the precious metals sector is close to being over.
That sign is the situation in the USD Index, and the shape of the gold-USD link.
Saturday, May 21, 2022
Why Is Crude Oil Ignoring US Inventories? / Commodities / Crude Oil
By: Submissions
While the current pull-back on black gold is fundamentally triggered by different forces, where is the prevailing wind coming from that is pushing prices lower?
On Wednesday, the day after the US Fed’s Chair Powell showed a more hawkish tone, crude oil prices dropped 2.5% following profit-takings on most commodity markets - new fears emerged that a world economic slowdown combined with rising interest rates could negatively impact the global demand. By the way, talking about profit-takings, our subscribers took theirs on Monday within the last phases of the strong rally in crude oil that hit our last projected targets.
Saturday, May 21, 2022
Here is Why I’m Still Bullish on Gold Mining Stocks / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
The medium-term outlook for the precious metals remains bearish, but does this mean we can’t profit on shorter-term moves? Quite the opposite!
Precious metals declined yesterday, and so did the general stock market. Is the rally already over?
When I wrote about this rally on May 12, which took place at the same time when I took profits from the short positions and entered the long ones, I mentioned that I planned to hold these long positions for a week or two. Since that was exactly a week ago, the question is: is the top already in?
In short, it probably isn’t. As always, it’s useful to check what happened in the past in similar situations to verify whether what we see is normal or some kind of an outlier that cannot be explained by something that has already happened.
Let’s start with a quote from yesterday’s analysis:
Of course, there will be some back-and-forth movement on an intraday basis, but it doesn’t change anything. Junior miners are likely to rally this week nonetheless. And perhaps not longer than that, as the next triangle-vertex-based reversal is just around the corner – on Friday/Monday.
Saturday, May 14, 2022
Futures Contract – Trading Crude Oil With USO / Commodities / Crude Oil
By: Chris_Vermeulen
Crude oil, like most commodities, is not priced as a single data point like a stock. Instead, commodities, like oil, trade via futures contracts. A futures contract is an agreement to buy or sell a particular commodity or security at a predetermined price at a specified time in the future. Futures contracts are standardized for quantity and quality specifications to facilitate trading on a futures exchange.
Unlike options, futures contracts do not have a time value component in their pricing. Each futures contract is a standalone contract with its own ending date, supply and demand, and market-determined price for the underlying product. Another key difference between options and futures is that while an option gives the holder a right to buy or sell at a specific price, exercising that right is optional. A futures contract is a legal contract for delivering an underlying physical product or, in some cases, a cash equivalent. Futures contract performance is a legally binding agreement and is not optional.
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