Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

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.

Thursday, November 24, 2022

Crude Oil Price Predicis the US Economy and Stocks / Commodities / Crude Oil

By: Rambus_Chartology

Oil, like just about everything else that is related to the markets, bottomed around the March / April 2020 pandemic crash low. The oil complex had been one of the worst performing areas even underperforming the PM complex if that is possible. When oil did bottom it did so in dramatic fashion capitulating hard to the downside in one last climatic thrust.

I built a few new combo chart this weekend, related to oil sector, to see if I could paint a more clearer picture of what is taking place. Since the 2020 crash low the USO, US oil fund, has had a very strong rally with the high being made back in the middle of June around 93 or so. The USO has been forming a new trading range since the June high and is currently testing the top rail of the blue falling wedge and the bottom trendline the 2020 uptrend channel. So the moment of truth has arrived.

Tuesday, November 22, 2022

GOLD AND THE NORMALCY BIAS / Commodities / Gold and Silver 2022

By: Kelsey_Williams

We think we know most (if not, all) of what we need to know about gold. Investors do their research and marketers spin their best yarn(s). Support is offered with an amazing array of fundamental and technical factors on display for all to see. But what are we not seeing?

NORMALCY BIAS DEFINITION

normalcy bias (noun)

“The phenomenon of disbelieving one’s situation when faced with grave and imminent danger and/or catastrophe.”  …Wictionary

Here is a better, more complete definition from a different source…

Monday, November 21, 2022

Gold Price Formed a Bearish Star, and It’s Not Even Christmas Yet / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

Last week was full of events, but the most important one clarified after Friday’s closing bell – gold formed a reversal “shooting star” candlestick.

The implications are just as you think they are. After a sharp run-up, the rally has run its course, and the yellow metal is now about to slide again.

Let’s take a closer look.

Friday, November 18, 2022

As inflation eases, Macro grinds favor of Gold Stocks Mining Sector / Commodities / Gold and Silver 2022

By: Gary_Tanashian

The macro market and economic backdrop continues to pivot favorable for the gold mining sector

The risk/reward for gold stocks has been very good after 2.5 years of correction that, contrary to what a majority of gold bugs think, was very valid amid the post-pandemic cycle of cyclical inflation. I won’t review the details about why here, as it is beyond the scope of this article and I’ve parroted them in several blog posts at nftrh.com. But suffice it to say, the gold stock sector did the work it was supposed to do since August, 2020.

In a previous post we noted the risk/reward of gold (mining product) vs. crude oil (mining cost driver) that is at once very bearish for gold stocks and implying a great risk/reward proposition for gold, and by extension, the gold mining sector. Here is a chart showing the Gold/Oil ratio in a very depressed (bearish) state with nowhere left to go but up. That’s the positive risk/reward that has been hammered out since the high risk days of mid-2020 as the ‘inflation trades’ were just getting underway.

Friday, November 18, 2022

Can a Gold Stocks Rally Be Bearish? / Commodities / Gold and Silver 2022

By: P_Radomski_CFA

History tends to repeat itself, and mining stocks appear to be repeating their 2008 performance, which has very interesting implications.

Why do I think that gold miners are repeating their 2008 price patterns? Please take a look at the below chart.

Thursday, November 10, 2022

Why Now 'Is a Great Time To Load up on Silver and Silver Investments / Commodities / Gold and Silver 2022

By: Clive_Maund

Expert Clive Maund reviews silver's 4-month and 1-year charts to tell you why he believes it is a good time to load up on this precious metal.

Silver has three irresistible attributes at this time, one is that it is very cheap historically, especially when you factor in mounting inflation in recent times. Another is that, in common with metals generally, it looks set to enter a robust bull market as the dollar breaks down into a severe bear market.

The arguments relating to why the dollar looks set to break down have been set out in the parallel Gold Market update, as have the other circumstantial factors supportive of a rising silver price, such as the upside breakouts by copper and oil, so they will not be repeated here.