Analysis Topic: Commodity Markets - Metals, Softs & Oils
The analysis published under this topic are as follows.
Thursday, September 02, 2021
When Will It Be Time to Sell Precious Metals? / Commodities / Gold and Silver 2021
By: MoneyMetals
Clients often ask when they should sell precious metals. We usually suggest one basic rule around the timing. After that, the decision to sell will depend upon whether your reasons for holding gold and silver have changed.
The basic rule is to avoid selling based on impulse. Humans are emotional creatures and studies show most of us make poor choices when it comes to timing. If you are making a snap decision to sell (or buy) based upon a surge of either fear or greed, odds are you will regret it.
The trick to avoiding an emotional decision about when to sell is to understand why you bought precious metals in the first place and stick to your guns.
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Thursday, September 02, 2021
Bittersweet Truth for Gold Stocks: What You Need to Know / Commodities / Gold and Silver Stocks 2021
By: P_Radomski_CFA
When the Fed entices grown up kids with sweet words, they hit the candy store and stock up on gold, silver, and stocks. A sugar hangover follows.
Beware of the candyman!
With Fed Chairman Jerome Powell performing his usual dovish dance on Aug. 27, gold, silver, and mining stocks were like kids in a candy store. However, with the short-term sugar highs often leaving investors with nasty stomach aches, the sweet-and-sour nature of the precious metals’ performances may lead to pre-Halloween hangovers.
HUI Index: Harbinger of Things to Come
To explain, while the HUI Index invalidated the breakdown below its previous lows, the bullish reversal may seem quite sanguine. However, an identical development occurred in 2013 right before the index continued its sharp decline. Moreover, I warned previously that the HUI Index could record a corrective upswing of 4% to 8% (that’s what happened after the breakdown in 2013) and that it would not change the medium-term implications. And after the index rallied by more than 6% last week, the bounce is nothing to write home about.
Thursday, September 02, 2021
Facing down our investment fears, Courage comes from a strategy you can genuinely believe in / Commodities / Gold and Silver 2021
By: Michael_J_Kosares
“Gold shone with the placid certainty of received tradition. Honored through the ages, the standard of wealth, the original money, the safe haven. The value of gold was axiomatic. This view depends on a concept of gold as unchanging and unchanged—nature’s hard asset.” – Matthew Hart, Vanity Fair magazine
Facing down our investment fears
Courage comes from a strategy you can genuinely believe in
“As markets shake off their summer slumbers,” writes London-based analyst Bill Blain, “what should we be worrying about? Lots..! From real vs transitory inflation arguments, the long-term economic consequences of Covid, the future for Central Banking unable to unravel its Gordian knot of monetary experimentation, and the prospects for rising political instability in the US and Europe.”
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Tuesday, August 31, 2021
Gold GDX Stocks, A Proxy for the Precious Metals Complex / Commodities / Gold and Silver Stocks 2021
By: Rambus_Chartology
I’ve been suggesting for some time now that the PM complex is trading at a critical inflection point where they can have a big move in either direction. It may sound like a copout but that is what an inflection point is. Many times at a critical inflection point, in the case of the PM stock indexes, support can hold beautifully or there can be a false breakout of the the S&R line which can be called a bear trap if the price action trades back above that important trendline.
Tonight I’m going to use the GDX as a proxy for the rest of the PM stock indexes which is showing us a great example of the current critical inflection point. The most basic concept in Chartology is how an important trendline can reverse its role to what had been resistance to support once broken to the upside and vise versa. The psychology behind an important trendline, using the top rail of the 2016 flat top expanding triangle on this weekly chart for the GDX below, is that when the top rail of the flat top expanding triangle was broken to the upside everyone that bought below the top rail is above water. As long as there isn’t a big breach of the top rail most will feel comfortable and not sell.
Every trendline you put on a chart is a support and resistance line, above is bullish and below is bearish. This is why we are always looking for a backtest when we see a breakout of a chart pattern. It doesn’t happen all the time but it does happen enough to always be on guard.
Lets focus on the top rail of the 2016 flat top expanding triangle that starts at the 2016 high and runs horizontally to the right side of the chart. Not many caught the double top that formed just below the 2016 trendline which led to the March 2020 crash low. As you can see there were 3 important touches from below. After the 2020 crash low was put in you can see the vertical rally that ensued but this time the top rail gave way. After several more weeks of moving higher the GDX completed its first backtest which could have been the backtest which would lead to the next important move higher but that wasn’t the case.
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Thursday, August 26, 2021
Gold Price GameStop Stock Connection? It's an Emotions Game / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
There are many factors affecting gold prices on a daily basis, but… how can GameStop stock be one of them?
Given today’s pre-market slide in gold, it seems that the triangle-vertex-based turning point worked once again. Declines are likely next.
In yesterday’s analysis, I explained why the situation remains very similar to what happened in 2013, and that remains up-to-date. On top of that, two interesting things happened yesterday: one quite obvious and one less obvious.
Tuesday, August 24, 2021
Gold Happy 50th Anniversary / Commodities / Gold and Silver 2021
By: Michael_Pento
Friday the 13th of August 1971 was a very important date in U.S. history. It was the date that set the table for the beginning of the end of the USD's world reserve currency status. And, greatly expedited the road to perdition for the dollar's purchasing power.That means this past Friday was the 50-year anniversary of President Nixon's absolute termination of the dollar's ability to be redeemed for gold. Therefore, I thought it would be a good idea to review gold's performance since that time against some popular investments—especially since the MSFM took this same opportunity to impugn this most precious of metals—as they are always prone to do. And, to also once again explain what really drives the gold market.
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Tuesday, August 24, 2021
USDX Resurgence: Gold and Silver Don’t Let It Catch You Flat-Footed! / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
With its negative correlation to the metals, the USDX rally weighed heavily on gold, silver and stocks. Stop and think: what would be if it continued?
While the overwhelming majority of investors entered 2021 with a bearish outlook for the U.S. dollar, our optimism has proved quite prescient. The USDX bottomed at the beginning of the year. With the USD Index hitting a new 2021 high last week – combined with the EUR/USD, the GDX ETF, the GDXJ ETF, and the price of silver (in terms of the closing prices) hitting new 2021 lows – the ‘pain trade’ has caught many market participants flat-footed. Even silver stocks (the SIL ETF) closed at new yearly lows.
Moreover, after the USD Index surged above the neckline of its inverse (bullish) head & shoulders pattern and confirmed the breakout above its cup and handle pattern, the combination of new daily and weekly highs is quite a bullish cocktail. Given all that, even if a short-term pullback materializes, the USDX remains poised to challenge ~97.5 - 98 over the medium term — perhaps even over the short term (next several weeks).
Sunday, August 22, 2021
Gold Price and the ‘Taper Tantrum’ / Commodities / Gold and Silver 2021
By: Richard_Mills
Gold prices are slipping as talk of a “taper tantrum” has investors thinking that the US Federal Reserve’s bond-buying program could be scaled back.
Over the last three days spot gold has dropped $18, peak to trough, on news of US jobless claims falling sharply to 348,000, and the US dollar scaling over a nine-month peak. The dollar’s rise makes gold expensive for holders of other currencies and therefore dents demand for the precious metal.
Good job news indicative of a potential taper and interest rate increase was also responsible for a gold take-down on Aug. 9, when the spot price and gold futures both settled around $1,726, the worst since Mid-April.
A few factors have taken the shine off gold, including a strong US economic recovery with lower unemployment and healthy manufacturing data (the IHS Markit US Manufacturing PMI has risen from 59 in January to 63.4 in July); a climbing US dollar index (from 89 in January to its current 93.56), and most importantly, persistent rumors that the US Federal Reserve will reduce its current $120 billion per month asset purchases designed to flood the financial system with money for lending out, and follow that up with a rise in interest rates.
Because gold does not offer a yield, any suggestion of raising rates makes it less attractive to investors looking for interest on their investments. And because gold is a hedge against inflation, winding down the Fed’s balance sheet (a tally of asset purchases) also dents gold’s appeal because there is less chance of rising inflation caused by a continuation of “quantitative easing”.
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Saturday, August 21, 2021
The Rise And Fall Of Gold Stocks / Commodities / Gold and Silver Stocks 2021
By: Kelsey_Williams
The rise and fall of gold stocks is a story of hurt and disappointment. That is because most of the time gold stocks are in decline.
Below are four charts which depict the sad story. Following each chart I will make some brief comments…
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Saturday, August 21, 2021
Gold Stocks Break to New Yearly Lows! / Commodities / Gold and Silver Stocks 2021
By: P_Radomski_CFA
Ladies and gentlemen, we have a breakdown! Gold stocks underperformed the yellow metal so much that they reached the lowest levels seen this year…
The HUI Index (gold stocks) broke to new 2021 lows while the USD Index broke to new 2021 highs. Just as I’ve been warning you.
Mining stocks’ extreme weakness relative to gold continued yesterday, and while it may seem like the weakness has to have a limit, this limit is likely still quite far from the markets right now.
Let’s take a look at the long-term HUI Index chart for details.
Friday, August 20, 2021
Why Silver’s Breakout Into a Major New Upleg Is Likely Soon / Commodities / Gold and Silver 2021
By: The_Gold_Report
Technical analyst Clive Maund charts silver and explains why he believes the metal is in the “perfect” buy spot.
Silver is now regarded as the best value hard asset around, and it really doesn’t matter in the long-term whether J. P. Morgan and the other banks try to suppress the price or not. Like gold, it has intrinsic value and, in the situation of high inflation that we are moving into and that has already started, when most asset prices are surging it is illogical to think that silver won’t do likewise.
If they insist on trying to sit on it, all that will happen is that the physical market will break completely from the paper market and they will be increasingly perceived as absurd. We should therefore take advantage of its current relatively very low price to accumulate silver investments across the board.
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Thursday, August 19, 2021
Gold Rallies on Softening Inflation. What’s Going On? / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
Inflation softened slightly in July and gold prices rose, but the bullish joy may be premature. How should we respond?Inflation eased a bit in July, but it remained disturbingly high. According to the latest BLS report on inflation, the CPI increased 0.5% in July after rising 0.9% in June. The core CPI, which excludes food and energy, also softened, as it rose 0.3% in July after increasing 0.9% in June. The deceleration was mainly caused by a much smaller advance in the index for used cars, which increased only 0.2% (it was 10.5% in June).
However, on an annual basis, inflation practically stayed unchanged since June, as the chart below shows. The overall index surged 5.4% for the second month in a row (on a seasonally unadjusted basis), while the core CPI soared 4.3%, following a 4.5% jump in the previous month.
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Wednesday, August 18, 2021
When Gold Price Rises, Will Bitcoin Fall? / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
What do the portents say? Well, we’ve been looking for connections between gold and bitcoin, and we see a chance to fatten the coffers. Read on.
But first, let’s talk about gold and the miners. Yesterday’s session provided us with a perfect confirmation of the bearish case in the precious metals sector for the short term.
The reason is that what happened was bearish in two ways:
- Nothing happened in gold
- Daily declines in mining stocks
Saturday, August 14, 2021
Nonfarm Payrolls Crushed Gold Like a Sandcastle / Commodities / Gold and Silver 2021
By: Arkadiusz_Sieron
The US economy added almost 1 million jobs in July, building solid ground for tapering. Meanwhile, the PMs’ sandy foundations crumbled spectacularly.Another blow to gold! July’s nonfarm payrolls came in strong. As the chart below shows, the US labor market added 943,000 jobs last month, following 938,000 additions in June (after an upward revision). More than one-third of all gains occurred in leisure and hospitality, reflecting the economy’s reopening after the Great Lockdown.
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Friday, August 13, 2021
Gold Miners: Celebration Time / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Another day, another decline in junior miners – and another increase in profits from short positions in them. Shouldn’t we expect a rebound though?
Well, no. The rebound already happened in late July and early August, and what we see now is the trend being resumed. Consequently, even if it wasn’t for all the long-term analogies to the 2012-2013 declines in gold and gold stocks (HUI Index), one should expect the current short-term decline to be significantly bigger than the counter-trend upswing which ended earlier this month. At this time, the move lower is just somewhat bigger than the preceding rally. Thus, it’s not excessive and can easily continue.
However, let’s keep in mind that periods of very high volatility usually need to be followed by periods of relatively low volatility. That’s when investors verify if the “new reality” – the price levels after the decline – are justified or not. If the market votes “no”, we get huge rebounds and breakdowns’ invalidations. So far this week, the markets have been voting “yes”.
Friday, August 13, 2021
Precious Metals “Mini Flash Crash” Surprises Markets / Commodities / Gold and Silver 2021
By: Chris_Vermeulen
Overnight, on Sunday and early Monday, Precious Metals and Oil started a fairly big collapse which quickly bottomed and recovered – at least in the Precious Metals markets. Crude Oil is still moving lower in early trading on Monday, August 9, 2021. Can we learn anything from the pre-COVID market trends and extrapolate any real-world analysis from this?
Precious Metals “Mini Flash Crash” Surprises Markets This Week
One thing that struck me related to this move is this is a similar type of move that took place at the start of COVID in February 2021. Crude Oil started to move lower in early January 2020 while the US stock market continued to move higher before the COVID virus event hit. Gold also moved higher from January 2020 to a peak in February 2020 – just before COVID. Yet, all of them, Precious Metals, Oil, and the US major markets, moved dramatically lower as soon as the reality of a COVID type economic event setup and traders realized the scope of the issues before all of us.
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Friday, August 13, 2021
Gold Bullion Investors Hang Tight! / Commodities / Gold and Silver 2021
By: MoneyMetals
The precious metals futures markets launched shortly after Richard Nixon closed the gold window and removed the last vestige of gold backing from the Federal Reserve Note. Officials introduced paper gold and silver contracts specifically to increase price volatility and discourage physical ownership of metals.
After nearly 50 years, it is safe to say their strategy was a success.
It is often excruciating to own metal when the short run price action is completely disconnected from fundamentals.
The price smash in the last couple trading days is a case in point.
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Thursday, August 12, 2021
Gold and Silver Massacre to Continue? / Commodities / Gold and Silver 2021
By: Monica_Kingsley
Again, today’s report will be way shorter than usual, and focus only on select charts so as to drive position details of all the five publications.
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
Thursday, August 12, 2021
Strengthening Support for the US Dollar Adds to Precious Metal Weakness / Commodities / Gold and Silver 2021
By: Donald_W_Dony
The US economy added over 900,000 jobs in July, the most in 11 months and well above the market expectations. Part of the reason is the rapid pace of the COVID-19 vaccinations allowing the country to continue to re-open and promote businesses to hire more workers. This action has driven down the US Unemployment Rate to 5.40%, the lowest level since March 2020.
In response to the bullish employment news, the US dollar index (DXY) extended its upward momentum and reverse its pull back in late July to jump to almost $0.928 in the 1st week of August. A stronger-than-expected number could make the case for faster US policy tightening. Earlier this week, Fed chair Richard Clarida suggested conditions for hiking interest rates might come as early as late 2022.
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Wednesday, August 11, 2021
GDXJ Junior Gold Miners Setup A Double Bottom – Looking For A Rally Off These Unique Low / Commodities / Gold and Silver Stocks 2021
By: Chris_Vermeulen
The Junior Gold Miners ETF (GDXJ), fell to lows near $43.06 recently, which matched the low from the end of March 2021, near $43.24. Although these lows are not exactly the same, the span of time between these unique lows and the very close nature of them makes them a Double Bottom setup.
It is very likely that this support level will prompt a new upside price rally in Junior Miners targeting $50 to $52 or higher if the support level near $43 continues to hold.
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