Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Friday, December 03, 2021
The Masters of the Universe and Gold / Commodities / Gold and Silver 2021
By: Michael_J_Kosares
That small group of investment bankers – those Tom Wolfe dubbed the Masters of the Universe – made its fortune trading U.S. Treasuries. It still plays the same role today it always has but no longer occupies the center stage for Wall Street’s bond market. Instead, that role now belongs to the Federal Reserve. Since the introduction of quantitative easing in 2008, it has built a $5.57 trillion stockpile of U.S. Treasuries – a holding equal to almost 20% of the nearly $29 trillion national debt. Even more troubling, it purchased a mind-boggling 60% t0 80% of the federal debt issued since 2010, according to a recent Wall Street Journal report.
“At 10:10 a.m. most workdays on Wall Street,” writes Liz McCormick in a recent Bloomberg column (under the unsettling headline, One Trader Calls the Shots in the Treasury Bond Market) officials at the Federal Reserve wade into the Treasury bond market. For the next 20 minutes, they proceed to snap up bonds of all shapes and sizes. They’re impervious to price moves, and they never sell. An indiscriminate bond-buying machine, they’ve now amassed a $5.5 trillion stockpile of the debt.” Wolfe’s Masters of the Universe have been replaced by one omnipresent, spectacularly powerful, and as it turns out, fickle Master of the Universe – America’s central bank.
“For almost two years,” says Gillian Tett, in a recent Financial Times editorial, “a frightening question has haunted the U.S. Treasury and Federal Reserve. No, this is not whether the Fed can engineer a smooth exit from quantitative easing; nor whether this is the right moment to switch the governor (and policy). The question I am referring to is whether the U.S. Treasuries market is robust enough to handle the shocks that might arise from those first two problems. For while the U.S. government bond market used to be considered to be the world’s most liquid and deep asset class, in March 2020 that cozy assumption was smashed apart.”
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Tuesday, November 30, 2021
Can You Hear It? That’s the Crowd Booing Gold’s Downturn / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Even though the technicals have been predicting this for several months, people were still taken aback by gold’s fall — that’s why they are booing.
While the precious metals received a round of applause for their performances in October, I warned on several occasions that the celebration was premature. And with gold, silver, and mining stocks resuming their 2021 downtrends, investors’ cheers have turned into jeers in short order.
To explain, I warned previously that the GDX ETF could rally to or slightly above $35 (the senior miners reached this level intraday on Nov. 12, moving one cent above it). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, I highlighted just how quickly the air often comes out of the balloon. For context, the blue vertical dashed lines below depict the sharp reversals that followed after the GDX ETF’s RSI approached or superseded 70.
Sunday, November 28, 2021
Silver Long-term Trend Analysis / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
Silver during the post pandemic gold rush managed to break above resistance at $21 that propelled the price 50% higher to just over $30 which the price is now correcting from, and silver being silver the trends tend to be deep and messy, hence why Silver has just about retraced the whole of the breakout move.
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Sunday, November 28, 2021
Silver Mining Stocks Fundamentals / Commodities / Gold and Silver Stocks 2021
By: Zeal_LLC
The silver miners’ stocks have surged higher recently, starting to mean revert out of deep capitulation lows. Those improving technicals have started thawing the bearish sentiment that plagued this tiny contrarian sector last summer. The silver stocks’ latest earnings season wrapping up in mid-November revealed how these miners are actually faring operationally and financially. Do fundamentals justify more gains?
The silver-stock world is really small, with primary silver miners deriving over half their revenues from producing the white metal increasingly-rare. Only a handful of exchange-traded funds track this forgotten sector, led by the SIL Global X Silver Miners ETF. While also miniscule with just $1.2b in net assets in mid-November, SIL is the best-available sector benchmark. The silver stocks have had a wild ride this year.
Their price action closely mirrors gold stocks’, as silver’s dominant primary driver has always been gold. So SIL’s swings this year closely tracked those in the leading GDX gold-stock ETF like usual. Silver stocks were enjoying a solid young upleg last spring, with SIL surging 27.5% between late March to early June. But silver and thus silver stocks were sucked into gold’s sharp mid-June selloff on Fed-tightening fears.
Gold’s taper tantrum for the Fed starting to slow its epic quantitative-easing money printing unfolded in the months leading into that actual announcement. Between mid-June to late September, several bouts of heavy-to-extreme gold-futures selling crushed the entire precious-metals complex. The resulting silver-stock carnage hammered SIL 30.2% lower climaxing in an ugly capitulation, fueling serious bearish psychology.
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Sunday, November 28, 2021
Crude Oil Didn’t Like Thanksgiving Turkey This Year / Commodities / Crude Oil
By: Submissions
It appears that the US markets didn’t find the Thanksgiving turkey very tasty this year.
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Friday, November 26, 2021
SILVER Price Trend Analysis / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
SILVER Price Trend Analysis
Silver trend over the past 2 years shows a market that has repeated FAILED to break higher, despite going so far as breaching $30 early 2021. However all attempts have resolved towards the bottom of the trading range at $22 where I deemed that the most recent down trend off of a lower high of $29 was probably going to see Silver break below $22 which would target a trend to support zone of $18-$19, a break that has now come to pass.
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Friday, November 26, 2021
Is a Bigger Drop in Gold Price Just Around the Corner? / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
As expected, after the applauded increase, gold fell. But will it manage to bounce off the bottom or rather slide lower?
Today’s analysis is going to be all about gold, and for a good reason. Based on yesterday’s and Monday’s sessions, November is now a down month for gold. Please let that sink in.
Gold ended last week above $1,850, with almost everyone in the market cheering and making bets, on how soon gold will move above $1,900 and then rally to new yearly highs. It was after the completion of the inverse head-and-shoulders pattern, after all!
Wednesday, November 24, 2021
How Silver Can Conquer $50+ in 2022 / Commodities / Gold and Silver 2021
By: MoneyMetals
Two realistic price movement scenarios can see silver finally ascend through the magnetic $50 level in 2022. A case can be made that either – or perhaps both – have a strong likelihood of taking place.
First Scenario:
In December, silver moves up from a strong multiple-year base, with an impulse leg-driven First Quarter, punching through strong resistance and spiking into the low '$40's before retreating to its breakout just above $30.
It builds a broad $15 sideways HSR (horizontal support-resistance) price box between $43 and $28.
Volume strengthens on up days, and lessens on down days, creating a descending technical triangle.
In April, silver breaks out of its four-month coil and drives into new multiple year highs between $44 and $55 per ounce, creating spikes above $50, but without managing three closes (above a given price, in this case the historic $50) David Morgan looks for to validate a bullish (or bearish) impulse leg breakout.
Tuesday, November 23, 2021
Gold / Silver Ratio / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
The chart shows that Silver is in a long-term losing battle against Gold, basically Silver is mostly not a precious metal anymore, it really is an industrial metal, well that's what the chart implies for at the time of panic when everything was crashing which commodity did people turn to? It was GOLD! NOT SIlver! So maybe it is time for the Silver bugs to ditch the alternative to fiat currency mantra and realise that it may have been true at one point many, many years ago but not for some time.
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Monday, November 22, 2021
Cannabis ETF MJ Basing & Volatility Patterns / Commodities / Cannabis
By: Chris_Vermeulen
Recently, the Cannabis sector has shown signs of increased volume, volatility, and a reasonably strong potential for a price base. Volume started increasing near mid-September as the price of MJ fell below $15. This support level originated from late December 2020 after a significant rally trend from recent lows near $10 – when the Reddit retail trader event started to unfold.
I wrote about this sector and these opportunities in many articles before the incredible rally in late 2020 into 2021.
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Saturday, November 20, 2021
Inflation Risk: Milton Friedman Would Buy Gold Right Now / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Powell maintains that inflation is transitory, but the monetary theory of inflation suggests otherwise. So, elevated inflation could stay with us!,Some economists downplay the risk stemming from elevated inflation, saying that comparisons to the 1970s style stagflation appear unfounded. They say that labor unions are weaker and economies are less dependent on energy than in the past, which makes inflationary risks less likely to materialize. Isabel Schnabel, Board Member of the European Central Bank, even compared the current inflationary spike to a sneeze, i.e., “the economy’s reaction to dust being kicked up in the wake of the pandemic and the ensuing recovery”. Are those analysts right?
Well, in a sense, they are. The economy is not in stagnation with little or no growth and a rising unemployment rate. On the contrary, the US labor market is continuously improving. It’s also true that both the bargaining power of workers and energy’s share in overall expenditure have diminished over the last fifty years.
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Friday, November 19, 2021
Gold Mid-Tier Stocks Q3’21 Fundamentals / Commodities / Gold and Silver Stocks 2021
By: Zeal_LLC
The mid-tier and junior gold miners in their sector’s sweet spot for upside potential have been powering higher recently. They’ve blasted to several major breakouts after getting bombed out during gold-futures speculators’ taper tantrum on Fed-tightening fears last summer. These smaller gold miners just finished their Q3’21 earnings season, revealing whether their fundamentals support more big stock-price gains ahead.
Gold-stock tiers are defined by their production rates. Small juniors mine less than 300k ounces of gold annually, medium mid-tiers have outputs running from 300k to 1m, large majors yield over 1m, and huge super-majors operate at vast scales exceeding 2m. Mid-tiers offer a unique mix of sizable diversified gold production, considerable output-growth potential, and smaller market capitalizations ideal for outsized gains.
Mid-tiers are much-less-risky than juniors, and amplify gold’s uplegs much more than majors. Ironically the leading mid-tier gold-stock benchmark is the misleadingly-named GDXJ Vectors Junior Gold Miners ETF. It has evolved to be dominated by mid-tiers yielding quarterly outputs of 75k to 250k ounces. True juniors now only account for a smaller fraction of the weighting in this second-most-popular gold-stock ETF.
Just over a third the size of its big-brother GDX major-gold-miners ETF, GDXJ has certainly had a wild ride this year. Showing mid-tiers’ huge potential, GDXJ skyrocketed 188.9% in a massive upleg over just 4.8 months into early August 2020! The extreme greed and overboughtness that spawned necessitated a normal and healthy major correction to rebalance sentiment, so the mid-tiers fell 32.0% into late March 2021.
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Friday, November 19, 2021
Investors Expect High Inflation. Golden Inquisition Ahead? / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Inflation expectations reached a record high. Is gold preparing a counterattack to punish gold bears?In a classic Monty Python sketch, nobody expects the Spanish inquisition. In the current marketplace, everyone expects high inflation. As the chart below shows, the inflation expectations embedded in US Treasury yields have recently risen to the highest level since the series began in 2003.
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Thursday, November 18, 2021
Biden Signs a Bill to Revive Infrastructure… and Gold! / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Gold rallied thanks to the changed narrative on inflation, and Biden’s infrastructure plan can only add to the inflationary pressure. Huge price moves ahead?I have a short quiz for you! What the government should do to decrease inflation that reached the highest level in 30 years?
A) Decrease its expenditure to make room for the Fed to hike the federal funds rate.
B) Press the US central bank to tighten its monetary policy.
C) Deregulate the markets and lower taxes to boost the supply side of the economy.
D) Introduce a huge infrastructure plan that will multiply spending on energy, raw materials, and inputs in general.
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Wednesday, November 17, 2021
Silver vs US Dollar / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
One would expect an inverse relationship between the US Dollar and Silver. The below chart shows periods when the dollar has been falling (USD Index) in RED and rising in blue, during which time there does tend to be a tendency for Silver price to exhibit an inverse relationship to varying degree.
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Wednesday, November 17, 2021
Silver Supply and Demand Balance / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
So if Silver is closer to being an industrial commodity then a precious metal then one should look at supply and industrial demand for Silver for signs and portents of what the price may do.
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Tuesday, November 16, 2021
Are gold prices really bottoming? That all depends on the indicator / Commodities / Gold and Silver 2021
By: Donald_W_Dony
Holding gold has largely been about a hedge for inflation, weak US dollar or a store of safety during times of trouble. At present, it is the inflationary pressures that is the main driving force for the yellow metal.
Inflationary pressures are building around the world as the global economy tries to reopen. Consumer prices are sharply rising with the US Inflation rate posting a three-decade high of 6.2% in October and Germany hitting 4.5%, the highest level since 1993.
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Tuesday, November 16, 2021
Gold Stocks technically short-term bullish, but… / Commodities / Gold and Silver Stocks 2021
By: Gary_Tanashian
An update of the gold stock bounce
As a TA, I respect charts first and foremost. On occasion that respect has burned me as I’ve missed big profit opportunity or not seen a disaster unfolding that the charts missed. But much more often it helps me profit or saves me from disastrous ends. TA is just one tool in the box. An important one, but it should not stand alone. With the gold stocks especially, the correct macro-fundamentals matter.
Lately, with respect to the HUI Gold Bugs index, TA has helped me (and NFTRH subscribers) manage a low born of over-bearish sentiment at a key long-term support area (230 ), one of three downside targets we’ve had open since the correction began in summer 2020. For management of the correction and its bounces we’ve used various charts of varying detail and time frames. But last week in NFTRH 680 we simplified to the daily view below. With the rally now in full flight it is time to be paying attention to what may come next.
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Monday, November 15, 2021
Gold’s run shows interest rate hikes not coming soon / Commodities / Gold and Silver 2021
By: Richard_Mills
Gold continued to rally on Tuesday, as investors and metal traders priced in expectations that central banks will keep interest rates low until late 2022 at the earliest.
At time of writing spot gold and gold futures were both changing hands at about USD$1,833/oz.
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Sunday, November 14, 2021
Gold Price Trend Implications for Silver / Commodities / Gold and Silver 2021
By: Nadeem_Walayat
Clearly at times of market panic investors rush to Gold and then eventually once the dust settles soon realise in comparison Silver is cheap and thus plays catchup, usually swinging from cheap to expensive against Gold. So allowing for a delayed reaction there does exist a strong correlation between the Gold price and Silver. In terms of trend both Gold and Silver appear to be correcting their 2020 bull runs so should resolve upwards once the correction ends.
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