Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Tuesday, June 23, 2020

Making Sense of Crude Oil Price Narrow Trading Range / Commodities / Crude Oil

By: Nadia_Simmons

We previously wrote that while it was tempting to bet on crude oil’s prices due to their weakness, it was not a good idea from the risk to reward point of view, as black gold didn’t invalidate the breakout above the early-March high. And it was definitely a good idea not to enter a short position then either – crude oil moved higher since that time.

Monday, June 22, 2020

Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead / Commodities / Gold & Silver 2020

By: Dimitri_Speck

In recent issues of Seasonal Insights, my colleague Tea Muratovic and I shared our analysis of global stock markets with you.

Today I want to put a popular precious metal under the magnifying glass for you: silver.

Silver, often referred to as the "little brother" of gold, has a particularly interesting seasonal pattern I would like to show to you.

Saturday, June 20, 2020

Gold Sector Correction is Maturing / Commodities / Gold & Silver 2020

By: Gary_Tanashian

Gold Stock Seasonal Average

The HUI Gold Bugs index has over the last 2 decades (encompassing both bull and bear markets) tended to bottom in July per stockcharts.com‘s data for the index. A seasonal average is not a directive, but it is a () guide to be factored. Last year gold stocks bottomed in May as we caught what would be a violent upswing. This year I expect the low to be in June or July.

Saturday, June 20, 2020

Gold Futures Firepower Mounts / Commodities / Gold & Silver 2020

By: Zeal_LLC

Gold’s powerful post-stock-panic upleg hasn’t enjoyed buying support from the gold-futures speculators.  These influential traders often drive and even dominate major gold-price trends.  But they’ve been subtly selling into gold’s sharp recent rally.  Their dogged skepticism is actually very bullish for gold in coming months.  Gold-futures speculators are amassing big gold-futures-buying firepower that will be unleashed.

The maelstrom of extreme fear spawned by mid-March’s stock panic even briefly sucked in gold.  It had surged to a 7.1-year secular high of $1675 during the initial weeks of that heavy stock-market selling.  But once that went panic-grade, which is major stock indexes plummeting 20%+ in 2 weeks or less, even gold was dumped in the frantic dash for cash.  Similar to prior panics, gold plunged 12.1% in just 8 trading days.

But that sharp emotional drop was wildly-unjustified fundamentally.  With stock markets burning and the Fed printing crazy-record sums of new money like there’s no tomorrow, gold should’ve been soaring.  So it rapidly V-bounced out of that anomalous stock-panic low, to blast much higher over the next couple months.  Between mid-March to late May, gold surged up 18.7% to a 7.5-year secular high near $1748.

Thursday, June 18, 2020

Low Inflation Makes Powell a Dove. How It Affects Gold? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Inflation remains low, while Powell signals dovish Fed for years. Good for gold.

The US CPI inflation rate declined 0.1 percent in May, following a 0.8 percent drop in April. The decrease was mainly driven by decreases in energy, transportation and apparel prices. The core CPI also declined 0.1 percent, following a 0.4 percent drop in April. It was the third consecutive monthly decline, which happened for the first time in history of the index that starts in 1957. Anyway, compared with the previous month, we see some stabilization of disinflation forces, at least on a monthly basis.

On annual basis, the overall CPI increased just 0.2 percent (seasonally adjusted and merely 0.1 percent without the seasonal adjustments), following 0.4 percent increase in April. It was the smallest 12-month increase since October 2015. The core CPI rose 1.2 percent over the last 12 months, compared to the 1.4 percent increase in the previous month. It was the smallest increase since March 2011. Both indices are substantially lower than a few months ago. The chart below shows these disinflationary trends.

Wednesday, June 17, 2020

Silver is Going to have a Sudden, Massive Move to $50 that will Suprise Everyone / Commodities / Gold & Silver 2020

By: MoneyMetals

Mike Gleason: It is my privilege now to welcome back Michael Pento president and founder of Pento Portfolio Services. Michael is a well-known money manager, market commentator, and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. He's been a regular guest with us over the years, and it's always a pleasure to have him on with us.

Michael, thanks for the time again today and welcome back.

Michael Pento: Thank you so much for having me back on Mike.

Mike Gleason: Well, Michael, it's been a few months since we've had you on last and just a little bit has been going on in the world. COVID-19 has hit the states to say the least and caused major disruptions in the economy. Governors have instituted stay-home orders. Tens of millions of people have filed for unemployment. Now we're seeing major rioting and social unrest in many cities throughout the country over the police killing of a black man in Minnesota last week.

Wednesday, June 17, 2020

Gold Stocks Investment Strong / Commodities / Gold and Silver Stocks 2020

By: Zeal_LLC

Gold investment demand remains strong, buoying the yellow metal and its miners’ stocks.  Investors have continued actively diversifying into gold despite soaring stock markets and weaker summer seasonals.  The Fed’s extreme money printing fueling these precarious stock-market heights is perilously inflationary, making upping gold portfolio allocations essential.  This ongoing capital shift is likely to keep pushing gold higher.

The dominant driver of gold’s major price trends is investment demand.  While it isn’t the largest demand category, it varies greatly depending on global-financial-market conditions.  The best global gold supply-and-demand data is only published quarterly by the venerable World Gold Council, in its must-read Gold Demand Trends reports.  They highlight the big volatility inherent in gold investment demand in recent years.

From 2015 to 2019, jewelry demand averaged 51.2% of overall gold demand.  But the biggest jewelry year out of the last 5 was only 1.2x the smallest one in tonnage-demand terms.  Investment demand only averaged 29.0% of overall gold demand in 2015 to 2019, yet the difference between the best and worst years in this span was 1.7x.  The WGC’s latest GDT on Q1’20 again proved how important investment is.

Wednesday, June 17, 2020

Silver Tops Gold in May, Setting up a Summer Surge / Commodities / Gold & Silver 2020

By: The_Gold_Report

Although the gold to silver ratio has tightened a bit, it remains elevated and could indicate more upside for silver, according to McAlinden Research Partners.

Silver and silver miners popped in May on the back of a rebound in industrial activity around the world. Ultra-low interest rates and expectations of a weaker dollar have compounded several political pressures that begun popping up at the end of the month. Though the gold to silver ratio has tightened a bit, it remains elevated and could indicate more upside for silver.

Silver futures capped a gain of nearly 24% for the month of May, the largest monthly gain since 2011. The metal jumped strongly on hopes of an upturn in industrial activity as economies around the world have begun to "reopen" in the aftermath of the COVID-19 pandemic.

Tuesday, June 16, 2020

Strong Demand Will Not Send Gold Price Higher / Commodities / Gold & Silver 2020

By: Kelsey_Williams

Gold is original money. As such, it is the measure of value for everything else.

Gold was money before the US dollar and other paper currencies. All paper currencies are substitutes for gold, i.e., real money.

So, how much is money worth? Money is worth what you can buy with it. In my article A Loaf Of Bread, A Gallon Of Gas, An Ounce Of Gold, I compared the cost to purchase bread and gasoline over the past one hundred years using US dollars vs. gold.

Tuesday, June 16, 2020

Gold Stocks Correction and Upcoming Opportunity / Commodities / Gold and Silver Stocks 2020

By: Gary_Tanashian

Before updating the status of the gold miner (HUI) correction, let’s take a quick review of the Macrocosm, because it’s always a good time to be clear on important macro considerations.

The graphic makes the following points that are the foundation of the NFTRH view on the right/wrong times to be fundamentally bullish on the gold stock sector. In order of priority, a bullish view needs:

Tuesday, June 16, 2020

Stocks Bulls Beware: A Dark Cloud Is Forming Over Oil Markets / Commodities / Crude Oil

By: OilPrice_Com

Bullish sentiment appears to have returned to the stock markets with a vengeance. In a historic rally that has taken even die-hard bulls by surprise, the S&P 500 has managed to claw back all of its 2020 losses, taking just 53 sessions for the index to fully restore the nearly $10T in value it shed in an epic bear market. The oil markets have been nearly as impressive.

After entering negative territory for the first time in history, U.S. WTI prices have briefly touched $40/bbl amid record production cuts and an uptick in global demand. Oil and gas stocks have doubled from their March 23 nadir, marking a sharp reversal from the precipitous drop that wiped out nearly two decades of gains.

Monday, June 15, 2020

Silver: How to Gauge the Crowd's Mindset / Commodities / Gold & Silver 2020

By: EWI

Watching out for sentiment extremes helps you avoid getting "caught up with the crowd"

Simply put, a market sentiment extreme is a situation when most everyone has already taken a bullish or bearish position in a financial asset, leaving almost no one left to buy or sell.

Silver provides an excellent case study.

Let's briefly go back to April 18, 2011, when Elliott Wave International's U.S. Short Term Update, which provides near-term forecasts for major U.S. financial markets thrice weekly, showed this chart and said:

Sunday, June 14, 2020

Gold and Silver Precious Metals Sector Correction Starts as Risk On and Seasonal Factors Weigh / Commodities / Gold & Silver 2020

By: The_Gold_Report

Technical analyst Clive Maund discusses the factors he sees weighing on precious metals in the near term.

The precious metals sector is now set up for a correction that could be quite severe, which is evident on the charts, but also made more likely by the fundamentals where we see a return to "risk on" as a result of ongoing massive money injection by the Fed coupled with this being a seasonally weak summer period for the metals ahead of their seasonally strongest time, which runs from late July through September. The return of "risk on" will be greatly encouraged by the stock market breaking out to new highs which will suck money out of the PM sector to be deployed in biotech, blockchain, the FAANGS and the better cannabis stocks, but it should return as the economy gets going again and all the newly created money starts to drive inflation sharply higher.

Starting with gold's 6-month chart we see that it is weakening following a failed upside breakout from a Symmetrical Triangle, and is it now close to breaking the first line of support shown. Once that fails it is likely to head down to the next support level near to its 200-day moving average.

Friday, June 12, 2020

US Dollar Cycle Points To New All-time Highs For Gold / Commodities / Gold & Silver 2020

By: Hubert_Moolman

The US Dollar index is not a true measure of value of the US dollar. It just tracks an “exchange rate” between the US dollar and a basket of significant fiat currencies.

For a true measure of value of the US dollar it is better to look to Gold and Silver. However, there is a relationship between significant Gold rallies and the US Dollar index.

Gold has a tendency to rally at a certain time in a US Dollar index long-term cycle. Previously, I have looked at significant Silver rallies, relative to the US Dollar long-term cycle. Here, I would like to look at Gold.

Friday, June 12, 2020

Will US Labor Market Recovery Sink Gold? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

The recent job report is not reliable, but it shows recovery in the US labor market. The situation is still bad, but optimism could triumph for now, which is bad for gold.  

On Friday, the Bureau of Labor Services released the newest edition of the Employment Situation Report. The publication shows that the US economy regained 2.5 million jobs in May, constituting the biggest nonfarm payroll surprise in history. Indeed, the economists polled by MarketWatch had forecast a loss of 7.25 million jobs. The rebound is presented in the chart below.

Friday, June 12, 2020

Bullion Bank Retreat Puts Floor Under Gold and Silver Prices / Commodities / Gold & Silver 2020

By: MoneyMetals

Investors dumped paper gold and silver along with stocks, commodities, and most other asset classes in March. The price of silver dropped to $12.02/oz on March 18th and gold bottomed at $1,473/oz.

The bullion banks – notorious for their concentrated short positions – might have made a killing. But that isn’t what happened. Some of the most prominent players took massive losses instead.

Friday, June 12, 2020

Silver Investing Strategy / Commodities / Gold & Silver 2020

By: Nadeem_Walayat

Firstly, my long standing approach to Silver has been one of buying (accumulating) when the Silver price is cheap to invest to capitalise on long-term Spikes, as the silver price tends to be quite erratic in behaviour, prone to a lot of false signals so Silver can be a difficult market to trade i.e. tends to run stops and sharp movements contrary to the likes of Gold, just as we experienced during Summer 2019, with the bulk of the silver moves taking place towards the end of precious metals bull runs as illustrated by my analysis of May 2018 investing for a $35+ Spike.

Thursday, June 11, 2020

Gold Silver Ratio / Commodities / Gold & Silver 2020

By: Nadeem_Walayat

I am afraid I have got some bad news for all the Silver bugs out there, for the gold / silver ratio chart makes it crystal clear that Silver is NOT a safe haven precious metal. Yes you may still call it a precious metal but it is NOT GOLD! That's for sure!

Thursday, June 11, 2020

Gold Sad Truth / Commodities / Gold & Silver 2020

By: Michael_Pento

The sad truth is that few people really know very much about gold, especially when it comes to investing in the metal. They don’t understand what makes it so valuable and unique, and they know even less what moves its price. Since I don’t want to spend an hour on why it is so precious, I’ll just try and sum it up in a sentence: Gold is extremely rare, beautiful, portable, transferable, divisible without losing value, and virtually indestructible. Very few things on this earth can meet all those criteria, and that is why it is the most perfect form of money humankind has ever found.

Now more than ever, investors desperately need to know what really influences the dollar price of gold. This is the case given the unprecedented falsification of asset prices and debt monetization taking place today. Gold is not driven by the fear of a crash in the major market averages. Nor is it even primarily concerned about the inverse correlation to the U.S. dollar (USD). Indeed, the massive interest rate suppression scheme by the Fed since the Great Recession has been the main reason behind the outperformance of gold compared with the S&P 500. This is true even in the context of a rising USD.

Thursday, June 11, 2020

Silver’s Apparent Recovery / Commodities / Gold & Silver 2020

By: Kelsey_Williams

Some might say “Silver’s performance over the past several weeks has been nothing short of phenomenal.” Others talk and act as if all of their wildly crazy price predictions have already come true.

The chart (source) below is a one-year history of daily prices for SLV (Silver ETF)…