Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.Wednesday, May 28, 2008
Energy and Resources in High Demand / Commodities / Gold & Silver
There seems to be no stopping the high flying oil price as it leaps above $130, a price that seemed unlikely just last December. The growth in oil demand will continue to be driven by China and Asia , in spite of the U.S. economic slowdown.
In fact, according to the International Energy Agency, China, India , Russia and the Middle East will consume more crude than the U.S. , for the first time. Oil use worldwide will increase 2% this year because of the emerging markets. So with demand as robust as it is, any possible supply disruption will simply push oil up further.
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Wednesday, May 28, 2008
Gold Follows Crude Oil Slide / Commodities / Gold & Silver
THE PRICE OF PHYSICAL GOLD slumped another $18 at the London opening on Wednesday, falling to an eight-session low as crude oil slid yet again.European equity markets turned sharply higher for the first time in a week – gaining 1.5% in Paris – while bond prices fell on news of accelerating inflation in Germany , the Eurozone's largest single economy.
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Wednesday, May 28, 2008
Gold Technically Damaged / Commodities / Gold & Silver
Gold's sharp sell off yesterday (Gold closed at $907.40 down $18.60; Silver at $17.45 down 79 cents) has continued. Gold traded sideways in Asia before selling off again late in Asia and in early trading in Europe. Stock markets in Asia were mixed overnight but European markets have recovered from early losses and the FTSE is up nearly 0.5% in the session so far.Read full article... Read full article...
Wednesday, May 28, 2008
Gold Alternative Elliott Wave Counts / Commodities / Gold & Silver
“We've made no secret of viewing the current bullishness as a “sucker's rally” until proven otherwise, and will continue to seek verification for this view, with an open mind towards changing our outlook if dictated by price action. The current advance… could easily extend to the 5-week sma, at about $920. Strong resistance also exists at $955. Dollar strength seems technical and artificial, rather than based on strong fundamentals, but may yet last just long enough to provide the best gold buying opportunity in months.” ~ Precious Points: So Far So Good, May 17, 2008Read full article... Read full article...
Tuesday, May 27, 2008
Leverage Alternatives for Junior Mining Shares / Commodities / Options & Warrants
Investing in the junior mining shares over the last year or two has been considered risky at best and perhaps insanity by some investors. So, why would we be looking for leverage on the junior mining sector when the shares and the mining indices are hardly keeping up with the price of the bullion, gold or silver? Why not just purchase gold or silver? The simple answer is that many analysts believe the juniors will eventually break out and greatly out perform (as they have historically) and will reward investors beyond their dreams. Currently, there are signs of a bottom forming and thus it is a great time to discuss different forms of leverage for those investors willing to take on slightly more risk than merely purchasing the junior mining shares.Read full article... Read full article...
Tuesday, May 27, 2008
Importance of Covariance between Agri-Food Prices and Gold / Commodities / Agricultural Commodities
Prices are influenced by two forces. Inflation, caused by monetary expansion, is an increase in the general price level. That influence is felt directly though domestic prices rising and through a depreciating national money forcing imported prices higher. Additionally, prices on a relative basis can change. In the Agri-Food sector both influences have been felt. Prices for Agri-Food commodities have moved higher on a relative basis as a massive global demand shift has occurred.Read full article... Read full article...
Tuesday, May 27, 2008
Cyclical Corrections In Secular Trends / Commodities / Resources Investing
That is what is happening right now in stocks, commodities, and currencies, as the secular trends that were prevalent in all three asset groups up until mid-May will reassert themselves at the appropriate time, in the not too distant future. For stocks, this will involve a newer trend lower in both absolute and relative terms. For currencies and commodities the understanding is not so straightforward however, where all of the former are depreciating against the later being the important take-away. As per our title however, in the meantime cyclical (intermediate-term) corrections that can last for months are in play at present, meaning commodities could correct lower for some time (months) as the US Dollar Index ($) works off an oversold condition.Read full article... Read full article...
Tuesday, May 27, 2008
Don't Blame Crude OIl Speculation- Commodity Prices Are Driven by Fundamentals / Commodities / Crude Oil
John Derrick writes: U.S. Global Investors (Nasdaq: GROW ) recently hosted a webcast titled “Energy and Commodities Trends: Speculative or Sustainable?” to provide a closer look at the current strength in natural resources prices. Our timing for this topic was good: oil prices hit a record $135 a barrel last week and drivers get more and more depressed every time they pull up to the gas pump.Read full article... Read full article...
Tuesday, May 27, 2008
Gold Dips as Crude Oil Gains / Commodities / Gold & Silver
SPOT GOLD PRICES ticked lower in early action on Tuesday, slipping just below the tight trading range seen on Monday, when London and New York – the center of world Gold Trading – were closed for public holidays.Crude oil meantime rose above $133 per barrel after militants hit key pipelines in Nigeria .
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Tuesday, May 27, 2008
Middle Eastern Gold Demand Surges in 1st Quarter / Commodities / Gold & Silver
With markets in the U.S. and UK closed yesterday for US Memorial Day and UK bank holiday, gold traded sideways in slow trade in Asia and Europe. Stock markets in Asia were positive overnight but European markets have come under pressure and the FTSE has given up its early morning gains to trade flat for the session so far.Read full article... Read full article...
Monday, May 26, 2008
Raising Margin Requirements May Spike Oil Prices Higher / Commodities / Crude Oil
Commodity pricing theory mainly focuses on the transference of a “risk premia” from risk-adverse hedgers to speculators. This insurance-like context was first proposed by Keynes (1930) in his theory of normal backwardation. Essentially, Keynes believed that hedgers have to pay speculators a risk premium to convince them to accept their risk.
Dr. Richard Spurgin (2000) explained it in the following way. There are four types of participants in futures markets: short hedgers, long hedgers, speculators and arbitrageurs. Short hedgers are commercial producers and long hedgers are commercial consumers.
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Monday, May 26, 2008
Why Crude Oil Prices have Spiked Higher / Commodities / Crude Oil
Maybe it is just bad timing. Maybe our luck has run out. Whatever the case, it is downright unfortunate that the full effects of skyrocketing world oil supplies had to be realized during the silly season of a presidential election cycle. It is virtually a lock at this point that what needs to be said will be left unsaid and what needs to be done will be left undone. This week as crude oil pierced the $130/bbl mark and headed all the way above $135 before pulling back a multiple of reasons were offered. Some have merit while others do not even deserve mentioning.Read full article... Read full article...
Monday, May 26, 2008
Silver Coin Shortage Could Lead to Silver Price Spike / Commodities / Gold & Silver
Gold was up 3% last week and silver surged nearly 8% (more on silver below) and in normal circumstances profit taking would be expected in the early part of this week. But with oil remaining near record levels and inflation concerns increasing significantly, gold (and silver) may again surprise to the upside. Oil was up by 4.6% last week and is up another 1% today. Gold and silver will outperform oil in the coming weeks.Read full article... Read full article...
Monday, May 26, 2008
Sell Gold in May and Go Away? / Commodities / Gold & Silver
Gold is currently moving in volatile times and to me at least the debate on where it is going next looks increasingly polarized. While the hot money seems to have abandoned gold and silver to ride the crude oil bandwagon (which will certainly suffer the same drop soon), the old maxim "Sell in May and go away" seems to have been pinned to gold's lapel.Read full article... Read full article...
Sunday, May 25, 2008
Why Gold Will Get Whacked Again! / Commodities / Gold & Silver
Gold has recovered from its previous two “whacks” rather nicely this past week and the Friday before, but it will very likely be whacked again very soon, possibly as early as this coming Monday.Why?
Because gold is rising while the Dow/US stocks are in ultra-dangerous territory.
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Sunday, May 25, 2008
Gold Rallies Towards Resistance at $950 / Commodities / Gold & Silver
Despite a good week for gold, it seems to be laboring in its attempt to move higher. Silver, however, seems to be doing okay.
HOLIDAY SCHEDULE - The commentaries will be highly simplified over the next few weeks. Visiting relatives and stuff like that.
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Saturday, May 24, 2008
Rising Crude Oil Price Brings Out Nut Case Energy Crisis Solutions / Commodities / Crude Oil
The price of oil has been soaring and nut case solutions are coming out of the woodwork in response. I have talked about this twice recently in Congress Threatens Oil Producers and Congressional Insanity: Sue OPEC over Oil Prices .But as silly as those actions are, it is nothing compared to the stark raving lunacy proposed by Martin Hutchinson in Time to do something about oil .
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Saturday, May 24, 2008
Crude Oil and the Polar Bear / Commodities / Crude Oil
Last week the Bush administration declared polar bears as threatened species, acknowledging that global warming jeopardizes the species' livelihood as a result of rapid Artic sea ice depletion. The polar bear serves as a symbol for those who view climate change and global warning as the most important issue of our time. On the contrary, the panda represents China 's seemingly insatiable appetite for consuming raw materials, with the world's resources being further strained by the unprecedented growing masses of people in India and other developing nations increasing their standard of living with their financial upward mobility out of poverty.Read full article... Read full article...
Friday, May 23, 2008
Crude Oil Spikes Impact on Gold and Silver Price - Part 2 of 2 / Commodities / Gold & Silver
Why Supply is Not Rising with Higher Prices?On the supply side, certain opaque realities are often overlooked and have to be faced clearly. Non-OPEC oil producers are unable to push up oil production as fast as incremental demand is expanding. Old oil fields are declining while new ones are not coming on stream fast enough. This situation will not change in the next few years, unless new oil fields are found.
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Friday, May 23, 2008
The Case for Gold Hitting $1300 / Commodities / Gold & Silver
In October 2007, when gold was USD 750/oz and a US Dollar fetched 7.5 Chinese Renminbi Yuan (RMB), I published an article titled “Gold and RMB – Last Shoe to Drop for the dollar” , in which I said:
For a US family that spends $300 to $500 a month on Chinese goods, a further 40% appreciation of the RMB will translate into a $100 to $200 monthly cost increase. The logic of asking the Chinese to revalue their currency upwards is no different from asking the Saudi's to jack up their oil price further, which is no logic at all for a US consumer.
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