Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Wednesday, August 18, 2021
When Gold Price Rises, Will Bitcoin Fall? / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
What do the portents say? Well, we’ve been looking for connections between gold and bitcoin, and we see a chance to fatten the coffers. Read on.
But first, let’s talk about gold and the miners. Yesterday’s session provided us with a perfect confirmation of the bearish case in the precious metals sector for the short term.
The reason is that what happened was bearish in two ways:
- Nothing happened in gold
- Daily declines in mining stocks
Saturday, August 14, 2021
Nonfarm Payrolls Crushed Gold Like a Sandcastle / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
The US economy added almost 1 million jobs in July, building solid ground for tapering. Meanwhile, the PMs’ sandy foundations crumbled spectacularly.Another blow to gold! July’s nonfarm payrolls came in strong. As the chart below shows, the US labor market added 943,000 jobs last month, following 938,000 additions in June (after an upward revision). More than one-third of all gains occurred in leisure and hospitality, reflecting the economy’s reopening after the Great Lockdown.
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Friday, August 13, 2021
Gold Miners: Celebration Time / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Another day, another decline in junior miners – and another increase in profits from short positions in them. Shouldn’t we expect a rebound though?
Well, no. The rebound already happened in late July and early August, and what we see now is the trend being resumed. Consequently, even if it wasn’t for all the long-term analogies to the 2012-2013 declines in gold and gold stocks (HUI Index), one should expect the current short-term decline to be significantly bigger than the counter-trend upswing which ended earlier this month. At this time, the move lower is just somewhat bigger than the preceding rally. Thus, it’s not excessive and can easily continue.
However, let’s keep in mind that periods of very high volatility usually need to be followed by periods of relatively low volatility. That’s when investors verify if the “new reality” – the price levels after the decline – are justified or not. If the market votes “no”, we get huge rebounds and breakdowns’ invalidations. So far this week, the markets have been voting “yes”.
Friday, August 13, 2021
Precious Metals “Mini Flash Crash” Surprises Markets / Commodities / Gold and Silver 2021
By: Chris_Vermeulen
Overnight, on Sunday and early Monday, Precious Metals and Oil started a fairly big collapse which quickly bottomed and recovered – at least in the Precious Metals markets. Crude Oil is still moving lower in early trading on Monday, August 9, 2021. Can we learn anything from the pre-COVID market trends and extrapolate any real-world analysis from this?
Precious Metals “Mini Flash Crash” Surprises Markets This Week
One thing that struck me related to this move is this is a similar type of move that took place at the start of COVID in February 2021. Crude Oil started to move lower in early January 2020 while the US stock market continued to move higher before the COVID virus event hit. Gold also moved higher from January 2020 to a peak in February 2020 – just before COVID. Yet, all of them, Precious Metals, Oil, and the US major markets, moved dramatically lower as soon as the reality of a COVID type economic event setup and traders realized the scope of the issues before all of us.
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Friday, August 13, 2021
Gold Bullion Investors Hang Tight! / Commodities / Gold and Silver 2021
By: MoneyMetals
The precious metals futures markets launched shortly after Richard Nixon closed the gold window and removed the last vestige of gold backing from the Federal Reserve Note. Officials introduced paper gold and silver contracts specifically to increase price volatility and discourage physical ownership of metals.
After nearly 50 years, it is safe to say their strategy was a success.
It is often excruciating to own metal when the short run price action is completely disconnected from fundamentals.
The price smash in the last couple trading days is a case in point.
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Thursday, August 12, 2021
Gold and Silver Massacre to Continue? / Commodities / Gold and Silver 2021
By: Monica_Kingsley
Again, today’s report will be way shorter than usual, and focus only on select charts so as to drive position details of all the five publications.
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
Thursday, August 12, 2021
Strengthening Support for the US Dollar Adds to Precious Metal Weakness / Commodities / Gold and Silver 2021
By: Donald_W_Dony
The US economy added over 900,000 jobs in July, the most in 11 months and well above the market expectations. Part of the reason is the rapid pace of the COVID-19 vaccinations allowing the country to continue to re-open and promote businesses to hire more workers. This action has driven down the US Unemployment Rate to 5.40%, the lowest level since March 2020.
In response to the bullish employment news, the US dollar index (DXY) extended its upward momentum and reverse its pull back in late July to jump to almost $0.928 in the 1st week of August. A stronger-than-expected number could make the case for faster US policy tightening. Earlier this week, Fed chair Richard Clarida suggested conditions for hiking interest rates might come as early as late 2022.
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Wednesday, August 11, 2021
GDXJ Junior Gold Miners Setup A Double Bottom – Looking For A Rally Off These Unique Low / Commodities / Gold and Silver Stocks 2021
By: Chris_Vermeulen
The Junior Gold Miners ETF (GDXJ), fell to lows near $43.06 recently, which matched the low from the end of March 2021, near $43.24. Although these lows are not exactly the same, the span of time between these unique lows and the very close nature of them makes them a Double Bottom setup.
It is very likely that this support level will prompt a new upside price rally in Junior Miners targeting $50 to $52 or higher if the support level near $43 continues to hold.
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Wednesday, August 11, 2021
The Tapering Clock Is Ticking: Fed Gives Gold Some Time / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
The Fed acknowledged the economy’s progress, but it’s still not “substantial progress.” In short, Powell merely slowed the hand of the tapering clock.Last week (July 28, 2021), the FOMC published its newest statement on monetary policy. The publication was barely altered. The Fed noted that the US economy has continued to strengthen, although the sectors most heavily hit by the pandemic haven’t fully recovered yet. According to the FOMC members, the economy continues to depend on the course of the coronavirus, but not “significantly” anymore. So, the Fed acknowledged that the American economy has strengthened (even with the recent worries about delta variant) and that we are returning to post-epidemic normalcy. Theoretically, it’s bad news for gold, but this is something we all know, so the practical impact should be minimal.
A much more interesting change in July’s FOMC statement is the part about the Fed’s asset purchases:
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Wednesday, August 11, 2021
Price Of Silver – 100 Years In The Making / Commodities / Gold and Silver 2021
By: Kelsey_Williams
Sometimes fantasy becomes reality. At other times, a dose of reality will temper fantasies of outsized and unjustified proportion.
Some silver investors and analysts could use a dose of reality. Below is a chart of silver prices dating back to 1915…
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Sunday, August 08, 2021
Going for the Gold: Building a Winning Investment Portfolio / Commodities / Gold and Silver 2021
By: MoneyMetals
While Olympic athletes in Tokyo are going for the gold, investors are going for anything that might provide positive real returns.
In a yield-starved environment where bonds and cash are returning less than inflation, there are no guarantees. But there are certainly opportunities outside of fixed income instruments.
Investors who try to sprint their way to success risk hurting themselves in the process. Going for fast-moving penny stocks or cryptocurrencies can lead to ruin just as quickly as it can lead to riches.
Wednesday, August 04, 2021
Gold Jumps for Joy Only to Hit the Ceiling… Hard / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Powell’s recent dovish remarks started a sugar high among investors. However, it seems like the hangover has already begun.
The Gold Miners
While gold, silver and mining stocks jumped for joy following Fed Chairman Jerome Powell’s dovish remarks on Jul. 28, their sugar high ended on Jul. 30. And while I warned that FOMC press conferences often elicit short-term bursts of optimism, it was likely another case of ‘been there, done that.’
I wrote prior to the announcement:
While the PMs may record a short-term bounce – which often occurs following Powell’s pressers – lower lows are still likely to materialize in the coming months.
Wednesday, August 04, 2021
Gold is the Key to Financial Wisdom / Commodities / Gold and Silver 2021
By: Michael_J_Kosares
To fully understand markets, understand gold. It is the key to financial wisdom. By learning of its role as a financial asset, one will discover universal truths about the value of money, and hence, the underlying value of all assets. It does not do much good, for example, to make a small fortune in the stock market, only to see it dwindle (or disappear overnight) in an inflationary storm or an implosion in financial markets.
The central tenet to the wisdom of gold lies in its status as the most liquid and widely owned asset that is not simultaneously someone else’s liability. Former Federal Reserve Chairman Alan Greenspan once remarked: “No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the creditworthiness of a counter-party. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.”
In 2001, James Grant wrote an essay aptly titled “For Real Money.” It is a study of gold’s role in the financial marketplace. Though two decades old, that essay still resonates today. In it, he said that a new bull market for gold was already underway. Few believed him, but he turned out to be right. At the time, the metal was trading in the $280 range. Over the ensuing twenty-year period, it would rise to a little over $1800 per ounce today for a total return of 567%, or just over 10% per year compounded. (Gold reached a record high in August 2020 at $2067 per ounce.) He summed up the need for gold as follows:
“There are many differences between physics and economics, but the greatest of these is that particles aren’t people. Participating in a monetary system, clever people will exploit the rules in such a way as eventually to bring the system down. The system in place subsidizes and encourages risk-taking and borrowing. Accordingly, leveraged financial structures and colossal debts abound. The gold standard failed by reason of its structure (perceived as rigid). The pure paper standard is failing on account of its lack of structure. Anticipating the end of the dominance of the paper dollar, we have cast around for an alternative. The answer we keep coming up with is the one you already know.”
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Monday, August 02, 2021
Gold at a Crossroads of Hawkish Fed and High Inflation / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Gold has been trading sideways recently, but this won’t last forever – the yellow metal is likely to move downward before continuing its rise.
So, so you think you can tell heaven from hell, a bull market from a bear market? It’s not so easy, as gold seems to be at a crossroads. On the one hand, accelerating inflation should take gold higher, especially that the real interest rates stay well below zero. On the other hand, a hawkish Fed should send the yellow metal lower, as it would boost the expectations of higher bond yields. The Fed’s tightening cycle increases the interest rates and strengthens the US dollar, creating downward pressure on gold.
However, gold is neither soaring nor plunging. Instead, it seems to be in a sideways trend. Indeed, as the chart below shows, gold has been moving in a trading zone of $1,700-$1,900 since September 2020.
Sunday, August 01, 2021
Gold Stocks Autumn Rally / Commodities / Gold and Silver Stocks 2021
By: Zeal_LLC
The gold miners’ stocks were whacked hard earlier this summer on a Fed-rate-hikes scare. That serious anomaly really damaged sentiment, spawning exceptionally-weak seasonal performance in this contrarian sector. But the bruised gold stocks and the metal they mine have trudged through, making it back to the start of their traditional strong season. That begins with robust autumn rallies that usually start marching now.
Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals. We humans are creatures of habit and herd, which naturally colors our trading decisions. The calendar year’s passage affects the timing and intensity of buying and selling.
Gold stocks exhibit strong seasonality because their price action mirrors that of their dominant primary driver, gold. Gold’s seasonality generally isn’t driven by supply fluctuations like grown commodities see, as its mined supply remains relatively steady year-round. Instead gold’s major seasonality is demand-driven, with global investment demand varying considerably depending on the time in the calendar year.
This gold seasonality is fueled by well-known income-cycle and cultural drivers of outsized gold demand from around the world. Starting in late summers, Asian farmers begin to reap their harvests. As they figure out how much surplus income was generated from all their hard work during the growing season, they wisely plow some of their savings into gold. Asian harvest is followed by India’s famous wedding season.
Indians believe getting married during their autumn festivals is auspicious, increasing the likelihood of long, successful, happy, and even lucky marriages. And Indian parents outfit their brides with beautiful and intricate 22-karat gold jewelry, which they buy in vast quantities. That’s not only for adornment on their wedding days, but these dowries secure brides’ financial independence within their husbands’ families.
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Friday, July 30, 2021
Gold and Silver Precious Metals Technical Analysis / Commodities / Gold and Silver 2021
By: The_Gold_Report
Technical analyst Clive Maund explains why he is bullish on gold and precious metals. Despite the looming threat of massive inflation, or at least stagflation in the event that markets collapse, many appear to have given up on gold at the worst possible time, perhaps due to the mistaken belief that it will be perpetually suppressed by market manipulators.
The key point to grasp with gold, which has always been the same, is that since it is "real money" with intrinsic value it will always retain its value, and this has never been more the case than in situations where a currency is rapidly losing its purchasing power, as is set to happen with the dollar—and is already happening—and with almost all currencies around the world. With the purchasing power of fiat money everywhere set to be vaporized by inflation/hyperinflation, gold's (and silver's) appeal as a store of value has never been greater.
It is crucial to understand that even if markets crash, and take gold and silver prices down with them, their prices should drop at a lower rate than most other assets, and thus they should retain or increases their purchasing power so you will be able to buy more—just ask the people of Venezuela what they would prefer to have owned before their country was destroyed by hyperinflation, their local currency or gold—by end of it gold would buy wagonloads of the currency. So, at a time like this, there are no asset better for retain value than gold and silver.
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Thursday, July 29, 2021
Waiting On Silver / Commodities / Gold and Silver 2021
By: Kelsey_Williams
Expectations still abound for the long-awaited, vertical leap in silver prices. We are told it is inevitable; and that it is supported by solid fundamentals. Those fundamentals include supply deficits, a return to the 16 to 1 gold-silver ratio, increasing monetary demand for silver, etc.
However, an examination of those fundamentals reveals a different picture. That picture is inconsistent with the call for higher silver prices.
SILVER SUPPLY & DEMAND, RATIOS
The supply deficits (gaps in consumption over production) have been talked about for decades. In the 1960s and 1970s they were the principal fundamental justification in the case for higher silver prices.
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Wednesday, July 28, 2021
The US Dollar is the Driver of the Gold & Silver Sectors / Commodities / Gold and Silver 2021
By: Lorimer_Wilson
The U.S. dollar, as the world reserve currency, is still the driver of silver, gold, and inflation pricing and the charts below show that they should now be ready to run based on the USD topping and then dropping in “price”.
At this point the U.S. Dollar has corrected upward but has now either entered its next top, or is very close to that overhead resistance. Thus, we appear to be at the point where the USD will very soon start to move lower causing Precious Metals pricing across the board to start to move up aggressively, once again. In fact, I suspect that we saw a glimpse of exactly that into the close last week. All USD comments are on the chart.
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Wednesday, July 28, 2021
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? / Commodities / Gold and Silver 2021
By: Chris_Vermeulen
Our followers and readers have been emailing us asking for more research into Precious Metals and updated Adaptive Dynamic Learning (ADL) Price Modeling charts (our proprietary price/technical mapping system capable of predicting future trends, setups, and price levels). This special Gold and Silver research article will help you learn what to expect over the next 24+ months and where opportunities exist in Gold and Silver trends.
Longer-term support in Gold likely to act as an upward sloping price floor over the next 24+ months
There are two key upward sloping trend lines we want to focus your attention on, on this Monthly Gold chart, below. The first, the YELLOW trend line, originates from the 2009 bottom from the Housing Crisis. The important thing to remember at this time was that the US markets were in the midst of a broad market Depreciation Cycle that started in 2001-02 and ended in 2010. The rally that was taking place before the 2000 Depreciation Cycle started was a reactionary upside price trend resulting from the end of the DOT COM bubble and the post 911 terrorist attacks. The US entered a war that pushed fear levels higher – resulting in a transitional shift in how Gold was perceived at that time.
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Tuesday, July 27, 2021
Inflation Pressures Persist Despite Biden Propaganda / Commodities / Inflation
By: MoneyMetals
As the summer doldrums drag on, precious metals bulls are eying potential support levels for a seasonal bottom.
The gold market found support at the $1,750 level last month and has since been trading with a slight upside bias. Although the price action hasn’t been especially exciting, base building in these summer months can be a healthy technical process in the context of a larger bull market.
Meanwhile, investors are weighing troubling developments on the inflation front. Price increases are hitting consumers every time they shop, and that trend shows no signs of letting up.
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