Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Wednesday, March 31, 2021
Why It‘s Reasonable to Be Bullish Stocks and Gold / Commodities / Gold and Silver 2021
By: Monica_Kingsley
Another day, another reversal – and a positive one for stocks. Universal sectoral weakness gave way to a unison rebound amid constructive outside markets. After weeks of on and off fits over rising Treasury yields, S&P 500 ran into headwinds on their retreat, and recaptured its luster yesterday as long-dated Treasuries (TLT ETF) rolled over to the downside. I guess nothing boosts confidence as much a troubled 7-year Treasury auction.
While it‘s far from full steam ahead, it‘s a welcome sight that the reflation trade dynamic has returned, and that technology isn‘t standing in the way. I think we‘re on the doorstep of another upswing establishing itself, which would be apparent latest Monday. Credit markets support such a conclusion, and so does the premarket turn higher in commodities – yes, I am referring also to yesterday‘s renewed uptick in inflation expectation.
Tuesday, March 30, 2021
Is Silver the New Gold? / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Many analysts expect silver to outperform gold this year. It’s possible, but investors shouldn’t count on improving economic conditions and industrial demand.Silver has recently become a hot investment theme. For months, if not years, some analysts claimed that silver is undervalued relative to gold. Then, at the beginning of 2021, Reddit revolutionaries tried to trigger a short squeeze in silver. Although that attempt failed, silver has, so far, clearly been outperforming gold this year , as the chart below shows. So, is silver now a better investment than gold?
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Tuesday, March 30, 2021
Have Commodities Peaked? We Doubt It / Commodities / Commodities Trading
By: Chris_Vermeulen
While everyone was paying attention to the FOMC, Gold & Silver, and the Treasury Yields, it appears the recent commodity rally trend took a big hit on Thursday, March 18, 2021. Our guess is that the FOMC statement did nothing to support the continued commodity price rally as the US Fed continued with near-zero interest rates and economic support through 2023. The rally in commodities was likely based on expectations of a much stronger economic recovery as the COVID vaccines take the pressure off economic shutdowns and further restrictive economic conditions, but that may not be the case.
Commodities Rollover May Be Misleading Traders
The rollover in commodities suggests the markets are reacting to renewed expectations, post-FOMC. They may continue to consolidate near support (near $16.30) before attempting to move higher as traders digest the Fed comments and fall back into economic recovery expectations. Any move below $16.00 as seen on the chart below may likely prompt a consolidation phase within historical support channels (see the Weekly DBC chart below).
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Monday, March 29, 2021
Helicopter Money Vs. Gold / Commodities / Gold and Silver 2021
By: The_Gold_Report
Peter Krauth, editor of Gold Resource Investor, looks at the Fed's actions and what they augur for gold. This week Fed Reserve Chair Jerome Powell spoke at the "Innovation Summit" hosted by the Bank for International Settlements.
During his talk, he dissed Bitcoin and cryptocurrencies saying they were "…highly volatile and therefore not really useful stores of value, and they're not backed by anything."
OK, let me get this straight.
At its latest FOMC meeting the Fed promised near-zero interest with no rate hikes until 2023, and its $120 billion monthly asset purchases see no sign of abating.
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Monday, March 29, 2021
Powell and Yellen Sound Upbeat. Don’t They Like Gold? / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Both Powell and Yellen testified before Congress. They sounded upbeat on the U.S. economy, but gold’s reaction was weak.What a combo! Both Fed Chair Jerome Powell and the U.S. Treasury Secretary Janet Yellen testified before Congress this week. They spoke about the economic response to the economic crisis caused by the Covid-19 pandemic and the Great Lockdown .
In his prepared remarks , Powell sounded rather hawkish , as he noted that “the recovery has progressed more quickly than generally expected and looks to be strengthening.” As well, during the Q&A session, the Fed Chair seemed to be very confident about the economy and the central bank’s monetary policy . In particular, Powell told senators that 2021 was “going to be a very, very strong year in the most likely case.”
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Sunday, March 28, 2021
Gold Mining ETFs: Headed for Their Next Slide? / Commodities / Gold and Silver Stocks 2021
By: P_Radomski_CFA
The mining ETFs (the GDX and GDXJ) have hit resistance and look tired. After their corrective rally, a slide looks promising.
The miners are done correcting and if they were at a water amusement park, would they head for the lazy river? How about the wave pool? Nah… they’d be headed straight for the slides.
If you’ve been waiting for a high-quality sign that the next big move in the precious metals sector is underway – you just got it.
There are days on the markets when nothing happens, there are days when what happens is visible only to some ( like Monday’s session ), and there are days when the market’s signals are crystal-clear – as if the charts were practically screaming at the person examining them. Yesterday, was one of the latter kind of days.
Without further ado, let’s take a look at the key development that we just saw in the precious metals’ world – the big decline in the GDX ETF – proxy for mining stocks.
Sunday, March 28, 2021
Fed’s Crypto Plans May Turn Bitcoin Bulls into Gold Bugs / Commodities / Gold and Silver 2021
By: MoneyMetals
The globalist push for central bank digital currency is ramping up.
On Monday, Federal Reserve Chairman Jerome Powell spoke at a virtual "Innovation Summit" hosted by the Bank for International Settlements, the central bank for central banks around the world.
Powell aimed his remarks specifically at digital currencies. And he made it clear that Bitcoin and other privately circulating crypto coins should not be allowed to supplant government-controlled fiat notes.
Clearly, Bitcoin’s recent surge to a market capitalization of $1 trillion set off alarms within the global central banking cabal. The prospect of cryptocurrencies becoming widely used in commerce and trade poses an existential threat to the world monetary order.
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Friday, March 26, 2021
Gold Miners: Why Apparent Strength is Just a Facade / Commodities / Gold and Silver Stocks 2021
By: P_Radomski_CFA
Despite everyone saying the bottom is in, and that gold and miners are set for takeoff, the signs still point south. The real question: how low can they go?
Let’s take a look at some price targets for where the GDX and GDXJ mining ETFs might land up.
With the miners attempting to reclaim Pride Rock, it won’t be long until the GDX ETF is singing Hakuna Matata.
Rising U.S. Treasury yields? No problem.
A reinvigorated USD Index? Who cares.
But while strength is often viewed through the eyes of the beholder, the GDX ETF is far from being The Lion King. Sure, its bravery in the face of familiar foes is reason for optimism. However, we’ve seen this movie before. While the recent rally may resemble Mufasa, beneath the surface, the GDX ETF’s tepid price action looks a lot like Simba.
Wednesday, March 24, 2021
Commodities Comeback / Commodities / Commodities Trading
By: The_Gold_Report
Peter Krauth, editor of Gold Resource Investor, examines the commodity supercycle and the role recency bias plays in investment decisions. Recency bias is a funny thing. It's human nature to expect the near future to look like the recent past.
But we all know that's not how things always play out.
And that can be costly, even dangerous, for investors.
Take long term bonds, for example. Ten-year Treasury yields have more than tripled, from 0.54% to 1.66% since last July. Does that mean the 40-year bond bull market is dead?
Tough to say, or course. We'll only know that for sure with hindsight. You know… recency bias.
If nothing else, the bond market is telling us price inflation is becoming a thing again, notwithstanding what the Fed might be telegraphing.
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Tuesday, March 23, 2021
Nervous Fed to Give Precious Metals Markets a Boost / Commodities / Gold and Silver 2021
By: MoneyMetals
The Fed’s Open Markets Committee met last week and left policy unchanged – at least for the moment.
No one expected central banking officials to make rate adjustments last week with equity prices rubbing up against all-time highs and the economic recovery narrative still dominant.
Central bankers are likely getting nervous, however. Treasury yields are surging, and it is only a matter of time before stimulus addicted markets throw another tantrum.
In fact, the S&P 500 index fell after Wednesday’s announcement and each of the following two days.
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Friday, March 19, 2021
Have the Ides of March Come for Silver? / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Gold’s volatile little brother had an interesting run thus far, with internet forums buoying its price. But will fundamentals prevail? Where is silver headed?
“The Ides of March are come,” said Caesar. “Aye Caesar; but not gone,” replied the soothsayer. The Ides of March quotation is often bandied about in financial articles midway through the month. Caesar was assassinated on March 15 th in 44BC (or BCE), at a meeting of the Roman Senate. Written about by Plutarch and further popularized by Shakespeare (who dramatized the event), the day has been used as a harbinger of ill fortune. So, if we’re to look at silver, should we be concerned about anything at this time?
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Friday, March 19, 2021
Gold Prices Then March 2020 and Now March 2021 / Commodities / Gold and Silver 2021
By: Kelsey_Williams
A year ago this past week marked the onset of the Covid-19 Pandemic. It also was the last full week of trading in the financial markets preceding crashes in all markets and a near-complete, albeit temporary, shutdown of economic activity.
Subsequent rebounds in stocks, bonds and real estate took valuations to levels as high or higher (much higher for stocks and gold) than before the turbulence took hold. Some might refer to those valuations as nose-bleed levels, although the summit for peak ascension is always moving when the effects of inflation are factored in.
Gold had its day in the sun, too. After falling sympathetically with other markets, gold’s price began an aggressive climb of more than 40% in just four months time.
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Friday, March 19, 2021
Celebrate the Return of the Gold Bull / Commodities / Gold and Silver 2021
By: The_Gold_Report
Sector expert Michael Ballanger considers how recent market moves have influenced investment in the precious metals markets. I had not intended to hit the keyboard today, having worked all week to prepare the Special Situations Report on my top-performing Norseman Silver Ltd. (NOC:TSX.V) (whose 65% year-to-date advance and 869% advance since the March 2020 lows has been a pleasant surprise), but Friday's COT (Commitments of Traders) report grabbed me by the throat and slammed me into the chair.
The bullion bank behemoths that manage gold prices in the Crimex futures pits are particularly adept at bullying, and unlike the schoolyard, where bulging biceps and menacing unibrows command fear and obedience, it is the bulging wallets that send the meek scurrying for cover. I have watched the COT over the years, and whereas I used to make all trading decisions from the COT numbers, that has tempered somewhat since the world went into "manic mode" with the arrival of that nasty flu bug a little over a year ago.
Had I let the actions of the bullion banks be the sole determinant of my trading decisions last March, the 375,000-contract net short position would have sent me screaming under the bed. Fortunately for me (and those that follow me), other inputs weighed in heavily and it was the weekend of March 14–15 of last year that I ignored the Commercials and went "all-in." As they say, the rest is history. The biggest rally in the miners in many years ensued and one of the best performance years since 2011 unfolded, and continues here in 2021.
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Friday, March 19, 2021
ECB Accelerates Its Asset Purchases. Gold Needs Fed to Follow Suit / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
The ECB accelerated its asset purchases, but unless the Fed follows suit, gold may continue its bearish trend.On Thursday (Mar. 11), the European Central Bank decided to accelerate its asset buying under the Pandemic Emergency Purchase Program :
Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.
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Thursday, March 18, 2021
The 50th Anniversary of Nixon’s Colossal Gold Standard Error / Commodities / Gold and Silver 2021
By: Richard_Mills
It seems fitting that the year we are expecting to see an unprecedented rise in US government spending and money-printing to spur an economic recovery, marks the 50th anniversary of the end of the gold standard.
Done at the time to fight an economic crisis, we are still feeling the effects of this disastrous decision, five decades on.
In this article, we explain why President Nixon did what he did, and why every promise that unshackling the US government from the requirement of maintaining the dollar’s value in terms of gold would mean for the United States, has been broken.
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Wednesday, March 17, 2021
Gold and Stock Bulls Are Getting Ready / Commodities / Gold and Silver 2021
By: Monica_Kingsley
Now that stocks closed at new all time highs, the correction is officially over. And what little rest stock bulls could claim last week, arrived on Friday. Yet, the bull is strong enough to defend the 3,900 zone, and charge higher the same day.
Who could be surprised, given the modern monetary theory ruling the economic landscape? The Fed amply accomodative, one $1.9T stimulus bill just in, and a $2T infrastructure one in the making. That‘s after the prior Trump stimulus, and who would have forgotten how it all started in April 2020? The old congressional saying „a billion here, a billion there, and pretty soon you‘re talking real money“, needs updating.
Stocks are readying another upswing as the volatility index is approaching 20 again, and the put/call ratio shows complacent readings. The sectoral examination supports higher highs as tech has reversed intraday losses, closing half of the opening bearish gap. Value stocks naturally powered to new highs, with industrials, energy and financial performing best. Real estate keeps showing remarkable momentum, and has been among the best performers off correction‘s lows.
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Wednesday, March 17, 2021
Copper Shortage Narrative Goes Mainstream / Commodities / Copper
By: Richard_Mills
Mainstream media and the large mining companies are finally catching on to what we at AOTH have been saying for the past two years: the copper market is heading for a severe supply shortage due to a perfect storm of under-exploration/ lack of discovery of new deposits, clashing with a huge increase in demand due to electrification and decarbonization.
Dramatic price rise
Copper is trading over $4.00 a pound this year on rapidly tightening physical markets, rebounding economic growth especially in China, the top metals consumer, and the expectation that the era of low inflation in key economies may soon be over.
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Tuesday, March 16, 2021
New York Markets Have Obliterated Silver Prices over Time / Commodities / Gold and Silver 2021
By: MoneyMetals
Many investors sense that the country, and the world, has drifted into uncharted territory.
The last year has been extraordinary. There have been COVID lockdowns, a disputed presidential election, and multi-trillion-dollar federal deficits and bailouts. The Federal Reserve has injected more money into markets than ever before.
This insanity showed up in the physical gold and silver markets.
Bullion dealers have spent much of the past year fighting to get inventory, because investment demand for coins, bars, and rounds has never been higher.
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Tuesday, March 16, 2021
Is Dollar’s Weakness Giving Way to Gold? / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Since its peak in the spring of 2020, the U.S. dollar index has lost almost 12 percent, and it could decline even further, thus supporting gold prices.There is a weakness in the U.S. dollar. Let’s start off by taking a look at the chart below. As you can see, the broad trade-weighted dollar index has been declining recently. Since its peak in late March 2020, the greenback has lost almost 12 percent.
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Monday, March 15, 2021
How the EUR/USD Affects Gold Miners; Which ETF Will Suffer More? / Commodities / Gold and Silver Stocks 2021
By: P_Radomski_CFA
It’s all connected. The Eurozone’s underperformance boosts the USD, thus placing pressure on gold and the ETFs. So, which ETFs will suffer most?
A large part of yesterday’s free version of the analysis focused on the Eurozone’s economic outlook and how it affects the precious metals. We’ll eventually get to Europe again later in today’s analysis, but let’s first examine gold related ETFs, namely the GDX and GDXJ. How low can they go? That will depend on the general moves in the stock market.
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