Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Thursday, March 10, 2022
Gold Tries to Hold Above $2000 - Hard Landing Ahead? / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
Gold has hit $2,000 but is still struggling to maintain that historical level. It has already tried 8 times - will the ninth attempt succeed? Many indications make this doubtful.
Gold is attempting to break above the $2,000 milestone, and miners are trying to break above their declining resistance line. Will they manage to do so, and if so, how long will the rally last?
Tuesday, March 08, 2022
Ukraine’s Defense Shines ‒ and So Does Gold / Commodities / Gold and Silver 2022
By: Arkadiusz_Sieron
Russian forces have made minimal progress against Ukraine in recent days. Unlike the invader, gold rallied very quickly and achieved its long-awaited target - $2000!
Nobody expected the Russian inquisition! Nobody expected such a fierce Ukrainian defense, either. Of course, the situation is still very dramatic. Russian troops continued their offensive and – although the pace slowed down considerably – they managed to make some progress, especially in southern Ukraine, by bolstering air defense and supplies. The invaders are probably preparing for the decisive assault on Kyiv. Where Russian soldiers can’t break the defense, they bomb civilian infrastructure and attack ordinary people, including targeting evacuation corridors, to spread terror. Several Ukrainian cities are besieged and their inhabitants lack basic necessities. The humanitarian crisis intensifies.
Monday, March 07, 2022
Sanctions Threat Already Wipes Out Almost all Russian Oil / Commodities / Crude Oil
By: Submissions
Crude Oil Climbs High. Is It Enough to Enjoy a Better View?
The threat of sanctions caused a stir in the markets: WTI spiked above $130 and Brent is nearing the $140 mark. Where is crude oil going next?
A possible Western embargo on Russian oil caused oil prices to soar again on Monday, as stock markets feared persistent inflation and a consequent economic slowdown.
On the US dollar side, the continued rally of the greenback has propelled the dollar index (DXY) towards higher levels, as it is now approaching the three-figure mark ($100), even though it has not had a huge impact on crude oil, other petroleum products, or any other commodities in general. What we rather witness here is the greenback’s safe haven effect attracting investors, much like gold would tend to act in a “store of value” role.
Sunday, March 06, 2022
Fed’s Tightening Cycle: Bullish or Bearish for Gold? / Commodities / Gold and Silver 2022
By: Arkadiusz_Sieron
This month, the Fed is expected to hike interest rates. Contrary to popular belief, the tightening doesn't have to be adverse for gold. What does history show?March 2022 – the Fed is supposed to end its quantitative easing and hike the federal funds rate for the first time during recovery from a pandemic crisis . After the liftoff, the Fed will probably also start reducing the size of its mammoth balance sheet and raise interest rates a few more times. Thus, the tightening of monetary policy is slowly becoming a reality. The golden question is: how will the yellow metal behave under these conditions?
Let’s look into the past. The last tightening cycle of 2015-2019 was rather positive for gold prices. The yellow metal rallied in this period from $1,068 to $1,320 (I refer here to monthly averages), gaining about 24%, as the chart below shows.
Read full article... Read full article...
Friday, March 04, 2022
Gold Miners – Biggest Losers? That’s What Oil Says / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
After the war-driven gold rally, oil is starting to outperform. History between these two has already shown that someone may suffer. Many suggest: gold miners.
The precious metals corrected some of their gains yesterday, but overall, not much changed in them. However, quite a lot happened in crude oil, and in today’s analysis we’ll focus on what it implies for the precious metals market and, in particular – for mining stocks.
Friday, February 25, 2022
Gold Stocks’ Spring Rally 2022 / Commodities / Gold and Silver Stocks 2022
By: Zeal_LLC
The gold miners’ stocks have mostly been consolidating sideways over this past half-year. They’ve been held down by periodic bouts of heavy gold-futures dumping on Fed-tightening fears. But as those traders exhaust their selling firepower, gold stocks have formed a strong technical base that is birthing their next major bull-market upleg. And a stiff tailwind is mounting as gold stocks enter their strongest season of the year.
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. Like clockwork these power major spring, autumn, and winter seasonal rallies in gold and thus its miners’ stocks. Interestingly market forces behind the former are the least-understood out of all gold’s seasonal surges. Maybe that’s why this imminent spring rally has also proven gold’s weakest.
Yet surprisingly gold stocks still enjoy their best seasonal outperformance relative to their metal during these same coming months! So gold stocks’ spring rally has proven their strongest seasonal one during gold’s modern bull-market years. This contradictory mismatch between gold’s worst seasonal rally and its miners’ best one offers an important clue on the spring rally’s motivating impetus, sentiment is the key.
Traders’ psychology exceedingly influences their capital-allocation decisions. They won’t buy gold or gold stocks or anything unless they are optimistic prices will climb on balance. After dark cold winters in the northern hemisphere where the vast majority of the world’s traders live, spring naturally breeds optimism. Its glorious expanding sunshine and warming temperatures universally buoy the spirits of nearly everyone.
Read full article... Read full article...
Friday, February 25, 2022
Gold: What Should We Expect Given the Ongoing Ukraine Conflict? / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
As history shows, gold and silver rallies based on geopolitical tensions are often short-lived. Yesterday, a hint of a trend reversal appeared.
Don’t stop reading this mining stock analysis until you get to the part about junior mining stocks’ analogy. Something might interest you there.
While the unfortunate conflict confronting Russia and Ukraine has intensified in recent days, gold, silver, and mining stocks have benefited from the crisis. However, since history shows that geopolitical-tension-based rallies often reverse, Feb. 24 was likely a small indication of what should unfold over the next few months.
For example, gold’s sharp rally turned into a sharp intraday reversal on Feb. 24. While the S&P 500, the NASDAQ Composite, the S&P 500, and gold managed to end the session in the green, the GDX ETF declined by 1.93%.
Monday, February 21, 2022
Is It Worth Adding Gold to Your Portfolio in 2022? / Commodities / Gold and Silver 2022
By: Arkadiusz_Sieron
Gold prices declined in 2021 and the prospects for 2022 are not impressive as well. However, the yellow metal’s strategic relevance remains high.Last month, the World Gold Council published two interesting reports about gold. The first one is the latest edition of Gold Demand Trends, which summarizes the entire last year. Gold supply decreased 1%, while gold demand rose 10% in 2021. Despite these trends, the price of gold declined by around 4%, which – for me – undermines the validity of the data presented by the WGC.
I mean here that the relevance of some categories of gold demand (jewelry demand, technological demand, the central bank’s purchases) for the price formation is somewhat limited. The most important driver for gold prices is investment demand. Unsurprisingly, this category plunged 43% in 2021, driven by large ETF outlfows.
Read full article... Read full article...
Friday, February 18, 2022
2 Ways To Play The Commodity Boom In 2022 / Commodities / Metals & Mining
By: OilPrice_Com
...
Thursday, February 17, 2022
Gold: Break-Out or Fake-Out? / Commodities / Gold and Silver 2022
By: The_Gold_Report
Michael Ballanger looks at the recent rise in the gold price in light of what is happening in the broader markets and geopolitical activity.
Before I expand upon the events of the past week that caught my increasingly illusory attention span, I wish to impart upon my readers one of the many chasms that separate the generational narratives these days. When I first entered the Hallowed Halls of Bay Street in 1977, I was trained by men and women that can only be described as “warriors” in the sense that they carried a code of conduct into battle each and every day. Notwithstanding the blue blazers and grey-flannel slacks accompanying the perfunctory buttoned-down dress shirt, there was never a day nor occasion, no matter how casual, that did not demand a jacket and tie.
Read full article... Read full article...
Thursday, February 17, 2022
This Rare Gas Is Now Worth 100X More Than Natural Gas / Commodities / Metals & Mining
By: OilPrice_Com
...
Wednesday, February 16, 2022
Russia Ukraine Tension Blinded Gold Ignores the Real Threats: USDX and Fed / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
Gold continues to benefit from the market turmoil and has apparently forgotten about medium-term problems. Meanwhile, the rising USD and a hawkish Fed await confrontation.
With financial markets whipsawing after every Russia-Ukraine headline, volatility has risen materially in recent days. With whispers of a Russian invasion on Feb. 16 (which I doubt will be realized), the game of hot potato has uplifted the precious metals market.
However, as I noted on Feb. 14, while the developments are short-term bullish, the PMs’ medium-term fundamentals continue to decelerate. For example, while the general stock market remains concerned about a Russian invasion, U.S. Treasury yields rallied on Feb. 14. With risk-off sentiment often born in the bond market, the safety trade benefiting the PMs didn’t materialize in U.S. Treasuries. As a result, bond traders aren’t demonstrating the same level of fear.
Wednesday, February 16, 2022
Helium Prices Are Set To Soar As Supply Shortage Looms / Commodities / Metals & Mining
By: OilPrice_Com
...
Monday, February 14, 2022
How To Play The Coming Helium Boom / Commodities / Metals & Mining
By: OilPrice_Com
...
Friday, February 11, 2022
Gold Withstands the Storm. Will Miners Drag It off the Raft? / Commodities / Gold and Silver 2022
By: P_Radomski_CFA
In line with bearish bets, miners have thrown a match. Gold, however, doesn’t want to leave the ring without a fight. How long will it stay high?
While gold remains relatively firm despite stock market turbulence, rising real yields, and bearish technical indicators, even a confluence of headwinds hasn’t been able to knock the yellow metal off its lofty perch. However, mining stocks haven’t been so lucky. With my short position in the GDXJ ETF offering a great risk-reward proposition, the junior gold miners’ underperformance has played out exactly as I expected.
Moreover, with major spikes in volume preceding predictable sell-offs (follow the vertical dashed lines below), I’ve warned on several occasions that the GDX ETF is prone to tipping its hand – we saw this volume spike in January, which was the 2022 top (as of today). In addition, with mining investors’ power drying up by the day, the medium-term looks equally unkind.
Sunday, February 06, 2022
Will the Fed Tighten Gold? The Consequences Might Be Ignoble / Commodities / Gold and Silver 2022
By: Arkadiusz_Sieron
Beware, the Fed’s tightening of monetary policy could lift real interest rates! For gold, this poses a risk of prices wildly rolling down.The first FOMC meeting in 2022 is behind us. What can we expect from the US central bank this year and how will it affect the price of gold? Well, this year’s episode of Fed Street will be sponsored by the letter “T”, which stands for “tightening”. It will consist of three elements.
First, quantitative easing tapering. The asset purchases are going to end by early March. To be clear, during tapering, the Fed is still buying securities, so it remains accommodative, but less and less. Tapering has been very gradual and well-telegraphed to the markets, so it’s probably already priced in gold. Thus, the infamous taper tantrum shouldn’t replay.
Read full article... Read full article...
Sunday, February 06, 2022
Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot / Commodities / Gold and Silver 2022
By: The_Gold_Report
Technical Analyst Clive Maund examines the charts for the Market Vectors Gold Miners ETF, code GDX, and sees good cause to be positive about gold's future outlook.
In this update we are going to do something that we haven’t done for a while, which is to examine the charts for the Market Vectors Gold Miners ETF, code GDX, in an effort to figure out where it is in its cycle, and as we will see there is every reason to be positive about its future outlook.
Generally speaking, the Precious Metals sector has been dull for a long time, since early August 2020 to be exact and it has seriously underperformed the market as a whole, which is a positive in the sense that this makes it more undervalued with more upside.
In recent months, as we can see on the latest 6-month chart, GDX has been pretty much rangebound above a strong support level, with its overall trend being neutral to slightly lower. Over the past couple of weeks it has dropped quite sharply, which of course was partly in sympathy with the sharp drop in the broad market, and it is looking more of a buy here with the appearance of a bull hammer on Friday close to the support.
Read full article... Read full article...
Saturday, February 05, 2022
A Gold-centric Macro View / Commodities / Gold and Silver 2022
By: Gary_Tanashian
As the gold “community” rationalizes gold’s currently low standing…
As unpopular it may be, I cannot alter the truth as I see it. Marketing is fine, but never at the expense of truth, as with much financial media/analysis (with little disclaimers tucked in below the fold).
In my opinion, a sizeable component of the gold ‘market’ is actually marketing; to the fearful, to the naive, to the biased, to the politically rigid… Also in my opinion, Twitter is a breeding ground made for brief promos, sloganeering and bias reinforcement.
Pop up mini-screed behind us, let’s take another view of the macro from the perspective of a pretty rock that is heavy and does nothing, other than provide an anchor to long-term value in a bubble era where value is temporarily an outmoded concept. You don’t root for gold. You play the macro and keep an eye on gold, because when it is time to be bullish on gold, it will mean that…
Read full article... Read full article...
Saturday, February 05, 2022
Gold and silver Inflation Safe Havens / Commodities / Gold and Silver 2022
By: Richard_Mills
The US Federal Reserve, whose job is to keep unemployment in check and inflation in the “Goldilocks” zone of 2%, is telegraphing three interest rate increases of 0.25% each (1% at the high end of the range) this year.
Bloomberg believes the Fed might be more aggressive: “Our baseline is for the Fed to hike five times, each 25 basis points, this year, and balance-sheet runoff to begin in July. Our in-house rule for the Fed’s reaction function flags an upside risk for a 50 basis-point hike in March followed by five 25 basis-point hikes in the rest of the year.” Anna Wong, chief U.S. economist
The Fed has been wracking its brains trying to figure out how to control inflation, which is at a 40-year-high, and interest rate hikes are normally the usual panacea to cool an overheated, high-inflation economy.
The US Labor Department said that its Producer Price Index (PPI) rose 0.2% from November to December, bringing producer prices to a record-high 9.7%, the biggest calendar-year increase since data was first calculated in 2010.
The same report said US consumer prices increased solidly in December, led by gains in rental accommodation and used cars, culminating in the largest annual inflation rise in 40 years. Used-vehicle inflation is mostly driven by the shortage in semiconductor chips.
Read full article... Read full article...
Sunday, January 30, 2022
Gold Price in 2022 Between Inflationary Rock and Hard Fed Hard Place / Commodities / Gold and Silver 2022
By: Arkadiusz_Sieron
Gold’s fate in 2021 will be determined mainly by inflation and the Fed’s reaction to it.In the epic struggle between chaos and order, chaos has an easier task, as there is usually only one proper method to do a job – the job that you can screw up in many ways. Thus, although economists see a strong economic expansion with cooling prices and normalization in monetary policies in 2022, many things could go wrong. The Omicron strain of coronavirus or its new variants could become more contagious and deadly, pushing the world into the Great Lockdown again. The real estate crisis in China could lead the country into recession, with serious economic consequences for the global economy. Oh, by the way, we could see an escalation between China and Taiwan, or between China and the US, especially after the recent test of hypersonic missiles by the former country.
Having said that, I believe that the major forces affecting the gold market in 2022 will be – similarly to last year’s – inflation and the Fed’s response to it. Considering things in isolation, high inflation should be supportive of gold prices. The problem here is that gold prefers high and rising inflation. Although the inflation rate should continue its upward move for a while, it’s likely to peak this year.
Read full article... Read full article...