Best of the Week
Most Popular
1.Scottish Independence YES Vote Panic - Scotland Committing Suicide and Terminating the UK? - Nadeem_Walayat
2.Independent Scotland Will Disintegrate as Unionist Regions Demand Referendum's to Rejoin UK - Nadeem_Walayat
3.Bank of England Panic! Scottish Independence Bank Run Already Underway! - Nadeem_Walayat
4.Gold and Silver Price Ready To Go BOOM - Austin_Galt
5.Gold and Silver Potential Price Meltdown Scenario - Rambus_Chartology
6.Scottish Independence UK Catastrophe - The Balkanisation of Britain - Video - Nadeem_Walayat
7.The Price Of Gold And The Art Of War Part I - Darryl_R_Schoon
8.Main Reason Why Scotland Will Vote NO to Independence, 70% Probability - Nadeem_Walayat
9.Heavy Gold and Silver Shorting is Bullish - Zeal_LLC
10.10 Year U.S. Treasury Short Best Place to be Remainder of 2014 - EconMatters
Last 5 days
Bitcoin Price Charts In-Depth Analysis - 19th Sept 14
Alibaba is Focused, Will Use Money in Emerging Areas - 19th Sept 14
Bird's Eye View of the Gold Stocks - 19th Sept 14
Scotland Independence Result NO Win 55% to Yes on 45% - 18th Sept 14
Silver Price: A Collapse and a Rally - 18th Sept 14
Here's Why Trendlines are Your New Trading Best Friend - 18th Sept 14
Silver Buyers Keep Stacking And Demand Higher Despite Falling Prices - 18th Sept 14
The "Hidden" Billions in the Alibaba IPO - 18th Sept 14
Russian Union Of Engineers Accuses Ukraine Airforce In MH17 Crash - 18th Sept 14
Monetary Policy Weighs on Gold and Silver - 18th Sept 14
Global Currencies Analysis...The World According to Chartology - 18th Sept 14
Gold Price Hammered by Strong U.S. Dollar - 18th Sept 14
Is Citigroup the Dumbest Bank Ever? - 18th Sept 14
Scotland Must Vote Yes! For All Of Us - 18th Sept 14
Scottish Independence Referendum Result NO 55%, YES 45% - Vote Forecast - 18th Sept 14
A Public Bank Option for and Independent Scotland - 17th Sept 14
The Charade of Independence for Scotland and UKIP - 17th Sept 14
Gold Report - U.S. National Debt Surges $1 Trillion In Just 12 Months - 17th Sept 14
How to Find Trading Opportunities in ANY Market Using Fibonacci Analysis - 17th Sept 14
Why Money Is Worse Than Debt - 17th Sept 14
Can Gold Price Finally Recover? - 17th Sept 14
Scotland Independence - Europe Holds Its Breath - 17th Sept 14
The Energy Prices at Risk with Scottish Independence - 17th Sept 14
Scottish Independence SNP Lies on NHS, Economy, Debt, Oil and Currency - 17th Sept 14
The Truth Behind the Dangerous "Helicopter Money" Delusion - 16th Sept 14
Central Bank Balance Bullying: Investor Implications - 16th Sept 14
U.S. Dollar and Gold Elliott Wave Projection - 16th Sept 14
The Origins and Implications of the Scottish Referendum - 16th Sept 14
The Collapse Of U.S. Silver Stocks As Public Debt Skyrockets - 16th Sept 14
Emerging Markets Are Set Up for a Crisis, What’s on Your Radar Screen? - 16th Sept 14
Scottish Independence Bank Run Already Underway - Video - 16th Sept 14
The Emergence of the US Petro-Dollar - 16th Sept 14
Economic GDP Drives Stock Prices Inestment Myth - 16th Sept 14
Don't Miss This Gold Buying Opportunity - 16th Sept 14
Why ECB QE Is Bearish For Gold Prices - 15th Sept 14
Property Rights and Property Taxes—and Countries That Don’t Have Them - 15th Sept 14
Junior Miners Breaking Out Higher Forecasting Gold and Silver Price Bottom? - 15th Sept 14
Stock Market Patiently Waiting for Mean Reversion - 15th Sept 14
A Closer Look at the US Dollar - 15th Sept 14
The Silver Price Sentiment Cycle - 15th Sept 14
Stock Market Correction Underway - 15th Sept 14
Marc Faber - “I Want To Be Diversified, I Want To Own Some Gold” - 15th Sept 14
The Myth of Nuclear Weapons - 15th Sept 14
US Dollar Forecast to Go Much Higher - 15th Sept 14
Analysis And Price Projection Of The Uranium Market - 15th Sept 14
Bank of England Panic! Scottish Independence Bank Run Already Underway! - 15th Sept 14
The Ethics of Entrepreneurship and Profit - 14th Sept 14
The Big Investor Opportunity in the Orbital Space Junkyard - 14th Sept 14
Kohl's and The Rest of The Retailers are in Deep Doo Doo - 14th Sept 14
Independent Scotland Will Disintegrate as Unionist Regions Demand Referendum's to Rejoin UK - 14th Sept 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Huge Stocks Bear Market

Commodity Stocks Risk On Rally: Rare Earth And Uranium Miners Outperforming

Commodities / Resources Investing Dec 19, 2012 - 04:02 AM GMT

By: Jeb_Handwerger

Commodities          For months, we have been highlighting to our readers that China’s economy is beginning to pick up which could positively influence commodity prices.  The fears of a slowdown were overblown.

China’s stock markets (FXI) have been rallying since early September because speculation is rising that the newly chosen Communist Party may boost the economy.  The China 25 index fund (FXI) is approaching a major 52 week high breakout.




This may be impacting iron ore and industrial metal prices which have moved higher as Chinese industries may be beginning to aggressively stockpile ahead of 2013.

Uranium and rare earth miners are outperforming gold miners by at least 13 percentage points over the past month.  This may be forecasting a risk on rally as investors speculate that China, Japan and the emerging economies are bottoming.

Uranium miners (URA) are rebounding gapping above the 50 day moving average as China starts construction on new reactors and as Japan announces a pro-nuclear party, whose goal is to use additional stimulus to weaken the Yen.  This past month they are up over 12%.

Rare earth miners (REMX) are showing increased insider buying and must be watched as the Chinese are cutting down on exports and curbing production.  Keep your eyes on the heavy rare earth miners located in favorable geopolitical settings with low costs to get into operation.  The rare earth miner ETF is up close to 9% this past month.

Graphite is another key area which must be watched as China produces over 80% of the world’s supply.   China uses a lot of graphite in steel making and may not be able to supply the world for much longer.  China produces over 80 per of the world’s graphite supply. 

There have been pundits fearing a China slowdown but the charts are showing otherwise.  China may be rapidly acquiring natural resources during the quiet end of the year market to secure commodity supply in expectation of a major state funded stimulus. 

 Attention must be paid to this renewed interest in ferro alloy, copper (COPX), rare earth (REMX) and uranium miners (URA) during a quiet Year End market dominated by Fiscal Cliff news which has diverted the focus away from these undervalued sectors which are stealthily rebounding impressively.

China is investing in infrastructure projects and has been stimulating the economy in 2012 and may increase that in 2012.  China now dominates the steel making industry and accounts for more than 60% of world demand.  They have also become a net importer of many industrial metals for their own domestic economy.

The media tends to sell doom and gloom about the global economy and especially the oversold commodity sector (DBC).  They highlight that the major commodity producers have already begun to cut production.  This may be indicating to our contrarian antennae that the bottom has been reached in these commodities as mines shutdown putting pressure on available supply.  India, the third largest exporter of iron ore has cut back considerably this past year, which may cause a near term deficit.

The global printing of money started by an open ended QE3 and culminating with unemployment targets by the Fed is beginning to cause a flight into risk on assets as investors are realizing paper currencies are losing value and are looking into real undervalued industrial metal assets such as uranium (URA), copper (JJC), graphite and rare earths (REMC) many of which are trading at a fraction of the value it was before the credit crisis in 2007.

Subscribe to my free newsletter to get up to the minute updates on rare earths, uranium, gold and silver.

By Jeb Handwerger

Disclosure: I am long GLD, SLV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

http://goldstocktrades.com

© 2012 Copyright Jeb Handwerger- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014