Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Investing for Max Commodity Market Profits During a Trump US Presidency

Commodities / Investing 2017 Dec 28, 2016 - 01:28 PM GMT

By: Peter_Degraaf

Commodities

By listening to President-elect Trump we can anticipate the effect his administration will have on the US economy. 
Here is what we know:  Mr. Trump plans to beef up the military, and improve US infrastructure, including a wall at the southern border.   
While there are other priorities, such as improving on healthcare, just his two main goals will require many billions of dollars. 
Being a successful businessman is his asset, and no doubt the new president will surprise us with funding that will be new and novel, such as enticing US companies with overseas assets to repatriate those funds and put them to work in the USA. 


Nevertheless, we can be assured that whatever new sources of revenue the new administration comes up with, government spending will increase and so will the Federal Deficit.
The total US Federal Deficit will top 20 trillion before long.  This will be accomodated with more printing press money.  Congress and the Senate are likely to go along with spending plans.  Already the ongoing monetary inflation is causing price inflation, and the expectation is that this price inflation will accelerate.

Our ’investing for maximum profits’ therefore must include stocks and commodities that will grow during a period of price inflation. 
Charts are courtesy Stockcharts.com unless indicated.
          

Featured is the monthly US CPI chart.  Even though this official government Consumer Price Index is ‘tweeked’ to make it appear as benign as possible, the trend is clearly rising higher. 


Featured is the Chapwood index of price inflation in 10 US cities.  This index www.chapwoodindex.com tracks items that are used or consumed on a daily basis, compared to the components of the index used by the government, which are ‘massaged’ to produce a desired outcome.  From these two charts (and especially the Chapwood chart) it is obvious that price inflation is ‘here to stay’. 

Following are some charts that feature commodities which will benefit from increased inflation.  Our personal portfolio is centered around these commodities and this portfolio has increased by over 52%, during the past 12 months.  In order to stay ahead of price inflation, our assets need to grow faster than the rate of inflation.

      
      

     
Featured is the Palladium chart.  Palladium is used in catalytic converters and price inflation will continue to cause the price of Palladium to increase as people decide to buy a new car before the next price increase.  This chart is bullish, as can be seen by the rising channel.  The moving averages are in positive alignment (green oval), and rising, along with the supporting indicators.  Price is turning up at the green arrow. 

       

Featured is the copper chart.  Price broke out from a large triangle, at the blue arrow. Up volume during the breakout was the highest in years.  The rush into copper appears to have been somewhat over-done and the pullback from 2.75 has just now found support at 2.45, where price carved out a strong upside reversal on Tuesday (green arrow).   The moving averages are in positive alignment and rising (green oval).  The supporting indicators are ready to turn positive, including the important A/D line at the bottom.  In any event it is obvious from this chart that copper is benefiting from price inflation.  (One of the stocks in our “Model Portfolio” – Western Copper – increased by 50% for a while on Tuesday).
       

This chart is courtesy Kitco.com and it shows Zinc to be in a bull market.  New spending on improving the US infrastructure will benefit zinc along with copper. 
       
   
Featured is the lumber chart.  The trend is higher, as can be seen by the blue channel.  A close above the blue arrow will tell us that the uptrend is ongoing.   The supporting indicators are ready to turn positive. 
       
       

Featured is the Dow Jones US steel index.  Price has been in a bull market since January, and the Andrews Pitchfork analysis supports the rising trend.  The supporting indicators are back at support levels.  The moving averages are in positive alignment and rising.  
         

          
      
Featured is GNX the commodity index.  Price has been rising all year, while carving out a bullish Advancing Right Angled Triangle (ARAT).  The supporting indicators are positive and the moving averages are in positive alignment and rising.  The breakout at the blue arrow turns the trend back to bullish, with a target at 690!
   

Featured is the index that compares silver to gold, with two moving averages.  The silver chart is at the top.  The blue arrows point to bullish crossovers (blue above red) that turn out to be buying signals for silver.  The purple arrows point to bearish crossovers (red above blue), that turned out to be sell signals.  The blue arrow at the right points to a buy signal that is developing.  The close-up chart at the right shows this in detail.   Because silver is sought by investors as a hedge against price inflation, silver will benefit from the new presidency.

  
This chart courtesy goldchartsrus.com and annotated by I.M. Vronsky at Gold-eagle.com, shows gold as a percentage of financial assets. 

There  are at least four reasons why gold will rise again:

  1.  Protection against inflation.
  2.  Reaction against Federal Deficits
  3.  A beneficiary of negative ‘real interest rates’, currently at – 1.22%
  4.  Several billion new investors since 1980.  Most of these reside in Asia, where gold is appreciated as a ‘store of value’.


This chart courtesy Goldchartsrus.com shows the ‘real rate’ of interest.  The three month rate is -1.22%, while using government supplied numbers.  When actual cost of living numbers (such as the Chapwood index) are used, the ‘real rate’ is much lower.  Gold thrives when ‘real rate’ are negative.

Peter Degraaf is NOT responsible for your trading decisions.  Please do your own due diligence. 

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

© 2016 Copyright Peter Degraaf - All Rights Reserved

DISCLAIMER:Please do your own due diligence.  Investing involves taking risks.  I am not responsible for your investment decisions.

Peter Degraaf Archive

© 2005-2019 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

6 Critical Money Making Rules