Analysis Topic: Commodity Markets - Metals, Softs & Oils

The analysis published under this topic are as follows.

Tuesday, March 03, 2020

Gold Sets Up For Another Massive Move Higher / Commodities / Gold & Silver 2020

By: Chris_Vermeulen

Our research team believes the recent downward price activity in Gold and Silver are indicative of past price patterns we saw in Gold over the 2007 to 2012 rally.  Throughout almost every rally in precious metals (Gold), there have been a number of moderate to serious price corrections taking place within that extended rally.  The current downside move is moderately small compared to historical price rotation in Gold and potentially sets up a massive upside potential rally to levels above $2100 per ounce.

Weekly Gold Price Pattern from 2007 – 2017

This chart, below, highlights the downside price rotation that took place just before and as the US stock markets collapsed in late 2008 and 2009.  Notice how Gold collapsed nearly 28% right as extreme market weakness began to become present in the US stock market.  Then, pay attention to how Gold rallied from $730 in multiple upside price legs to a peak just below $1900 – well above 110%.  Could the same pattern already be setting up in 2020?

Sunday, March 01, 2020

Could Get Worse for Markets But Is a Gold/Silver Buying Opportunity / Commodities / Gold & Silver 2020

By: MoneyMetals

Mike Gleason: It is my privilege now to welcome back our good friend, Greg Weldon, CEO and President of Weldon Financial. Greg has decades of market research and trading experience specializing in the metals and commodity markets and even authored a book back in 2016 titled Gold Trading Boot Camp, where he accurately predicted the implosion of the US credit market and urged people to buy gold when it was only $550 an ounce.

He's regularly been making more great calls right here on our podcast over the years and it's great to have him on with us for the first time in 2020.

Greg, thanks as always for your time and welcome back. How are you?

Greg Weldon: I'm great Michael, thanks for the invite as always.

Sunday, March 01, 2020

Gold Stocks Spring Rally / Commodities / Gold and Silver Stocks 2020

By: Zeal_LLC

Before their recent surge on gold regaining $1600, the gold stocks spent much of the past half-year or so largely drifting sideways to lower.  That high consolidation really weighed on sentiment, with greed giving way to apathy.  This sector normally tends to suffer a seasonal slump into mid-March, paving the way for gold stocks’ spring rally.  That’s their second-strongest seasonal surge of the year running into early June.

Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year.  While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals.  We humans are creatures of habit and herd, which naturally colors our trading decisions.  The calendar year’s passage affects the timing and intensity of buying and selling.

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.

Sunday, March 01, 2020

Will Gold Shine Due to Coronavirus Infecting the Global Economy? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

With new cases of COVID-19 outside China rising, the chances of a pandemic and global recession have increased recently. What are the implications for the gold market?

Coronavirus Spreads Over the World

Unfortunately, the new coronavirus remains the hottest topic of the news. Although the COVID-19 epidemic has been slowing down in China since the beginning of February, it has quickly spread to several other countries. The WHO’s situation report from February 26 says that the infections of the new coronavirus has been reported in 37 countries. Actually, for the first time since the beginning of the epidemic on December 8, there have been more new cases reported from countries outside of China than from China. With so many countries, including the Western ones, struggling with the disease, the COVID-19 ceased to be Asian issue and has become a truly global issue. As world inches closer to the real pandemic, the financial markets could become even more nervous, so we could see more safe-haven flows into the gold market.

Sunday, March 01, 2020

Sweden Ends Its Experiment with Negative Interest Rates. Should Gold Be Worried? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

In December, the Sveriges Riksbank, the world’s oldest central bank, has raised the main interest rate from -0.25 percent back to zero, ending its experiment with the negative interest rate policy, as the chart below shows.

Chart 1: Riksbank’s repo rate from January 2010 to January 2020.

Sunday, March 01, 2020

Gold And Stocks Are Both Headed Lower, But… / Commodities / Global Debt Crisis 2020

By: Kelsey_Williams

Gold and stocks are moving south together; but they are not correlated. Nor, are they inversely correlated, as some gold enthusiasts claim.

Reference to gold as a safe haven has some investors buying gold to hedge against a stock market crash. It is almost as if gold has become a pseudo defensive stock.

It seems investors actually expect gold’s price to go up when the stock market goes down; and vice-versa.

If that were the case, how do you explain the extended periods when both moved together; or the price action of gold relative to stocks in the past four days? Gold currently is lower in price than it was before stocks tumbled nearly 4000 points.

Thursday, February 27, 2020

Oil Price Is Now More Volatile Than Bitcoin / Commodities / Crude Oil

By: OilPrice_Com

You know that the oil markets have truly gone to the dogs when they are suddenly riskier than one of the world’s most volatile commodities: bitcoin.  

Bitcoin and most cryptocurrencies are synonymous with extreme bouts of volatility. However, it’s crude oil that is now earning that dubious distinction after exhibiting price swings wilder than even the leading cryptocurrency.

On February 10, West Texas Intermediate (WTI) oil’s one-month realized, or historical, price volatility stood at 105.3%. In contrast, bitcoin's historical volatility clocked in at 42.3%, its lowest reading since September, according to Skew Markets.

Thursday, February 27, 2020

Gold and Silver The Die Is Cast / Commodities / Gold & Silver 2020

By: The_Gold_Report

Sector expert Michael Ballanger charts the latest changes in the markets and prognosticates on when and why silver prices should make a move.

One of my good friends from the 1980s and 1990s was the late Ian McAvity, a superb technical analyst, a founder of Central Fund of Canada, a Bay Street Mover and, most importantly, a humble and thoroughly enjoyable man. He was the first newsletter writer that I came across in my early years as a "registered rep," totally committed to technical analysis but with an undying and near-prophetical emphasis on precious metals.

It was in the 1980s, with gold having entered what would become a 21-year bear market. Many of the newsletter-flogging gloom-and-doomsters were making outrageous claims of "$1,000, $2000, $5,000 gold!!!" in a desperate (and unsuccessful) effort to distract their patrons away from the fledgling new bull market in stocks, which went on to dominate the investment horizons until the century came to its abrupt terminus. I liked Ian's style because in the mid-1980s, his bearish technical assessment of gold turned out to be not only disappointedly spot on, but also quite a refreshingly contrarian approach.

Wednesday, February 26, 2020

Gold Price Long-term Trend Analysis Forecast 2020 / Commodities / Gold & Silver 2020

By: Nadeem_Walayat

The gold bull market ended 2019 with a strong gain of 19%. The first half the year was marked with uncertainty as the price after an early year surge to $1350 gave up all of it's gains to drift lower to trade down on the year by early May. However, this was the calm before the bull market storm and that set the stage for a powerful bull run starting early June that saw the Gold price rocket higher to a early September peak of $1566, up over 25% on the year! Igniting Gold bug fever and encouraging prominent gold bugs to get carried away with headlines of Gold heading for $5000 and beyond.

Wednesday, February 26, 2020

Gold Is Taking on $1,700 amid Rising Coronavirus Fears / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Gold rally goes on, reaching almost $1,700 per ounce. What the heck is just happening in the precious metals market?

Gold Rallies Above $1,680

Wow, what an escalation! On Thursday, we reported that gold jumped above $1,600. On Friday, its price surpassed $1,640, as the chart below shows. And today morning, it has rallied even further, reaching $1,684.

Wednesday, February 26, 2020

Gold Minsky Moment Coming / Commodities / Gold & Silver 2020

By: Richard_Mills

“Minsky Moment” refers to the idea that periods of bullish speculation will eventually lead to a crisis, wherein a sudden decline in optimism causes a spectacular market crash. 

Named after economist Hyman Minsky, the theory centers around the inherent instability of stock markets, especially bull markets such as the current one that has been in place for over a decade. 

As Investopedia defines it, “A Minsky Moment crisis follows a prolonged period of bullish speculation, which is also associated with high amounts of debt taken on by both retail and institutional investors.” 

The Levy Economics Institute of Bard College describes his seminal theory as follows:

“Minsky held that, over a prolonged period of prosperity, investors take on more and more risk, until lending exceeds what borrowers can pay off from their incoming revenues. When overindebted investors are forced to sell even their less-speculative positions to make good on their loans, markets spiral lower and create a severe demand for cash — an event that has come to be known as a ‘Minsky moment.”

There are five stages in Minsky’s model of the credit cycle:

Monday, February 24, 2020

Sustained Silver Rally Coming? / Commodities / Gold & Silver 2020

By: Hubert_Moolman

Silver is still in consolidation mode since early September, but it appears ready to rally over a sustained period of time.

On the chart there appears to have formed some fractals. The current one has also broken out at the black line recently (just after point C).

As expected, price survived the test of the 50-day moving average, and is looking really bullish.

Monday, February 24, 2020

Should Investors Worry about Repo Market and Buy Gold? / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

$500 billion. This is the sum the Fed has already pumped into the repo market since the crisis there started. On September 17, 2019, the secured overnight funding rate – a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, based on the repurchase transactions – more than doubled, as the chart below shows, while the intraday range jumped to about 700 basis points! As a reminder, we are talking about the repo market, where interest rates usually fluctuate in an intraday range of 10, or at most 20 basis points.

Monday, February 24, 2020

Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Ladies and Gentleman, gold has overcome yet another barrier, jumping above $1,600 amid the fresh FOMC minutes and the renewed fears about the coronavirus economic consequences. What’s next for the yellow metal?

Fed More Optimistic about Global Economy
Gold bulls can be happy. As the chart below shows, the yellow metal has jumped above $1,600 amid the FOMC minutes and concerns about the coronavirus. Let’s now analyze these two important developments.

Sunday, February 23, 2020

Gold Price At $1500 Is Fair And Accurate / Commodities / Gold & Silver 2020

By: Kelsey_Williams

Is $1500 a reasonable price for gold? Some of the more ardent gold “bulls” might say no. A price of $2000 per ounce should sound better to them. That particular number is likely more popular because gold’s price didn’t quite get there eight years ago, stopping just shy of $1900 per ounce.

Similar behavior occurred after 1980, when gold’s price assent was stopped at $850. At that time, $1000 became the price projection of choice.

In both cases, the expectations for gold were likely born out of desire, rather than fundamentals.

So, how can we know what is a fair and accurate price for gold today – right now?

Saturday, February 22, 2020

Gold Warning – This is Not a Buying Opportunity / Commodities / Gold & Silver 2020

By: P_Radomski_CFA

Gold rallied by $17.20 yesterday (1.08%), while silver soared by $0.42 (2.35%), which means that silver more than doubled gold’s rally. Silver is outperforming gold, which was both profitable, and informative. Gold miners moved higher even more (4.60% in case of the HUI Index), indicating that the final part of the rally is not yet over but rather that we are still in it. Alternatively, it could mean that yesterday’s session was the top, but given today’s pre-market moves higher in gold and silver, the former seems much more likely. In other words, gold and silver are likely to move higher shortly.

One question is how far are they likely to move, but the key question is how likely it is that they will indeed move higher.

At first sight, the situation is as bullish as it gets:

• the USD Index might be topping here while being very overbought from the short-term point of view
• gold, silver, and mining stocks showed exceptional strength by rallying despite USD’s rally
• gold and silver broke above their declining resistance lines
• miners showed strength and created a bullish price gap yesterday

Indeed, these are all factors that will likely make one consider jumping in the precious metals market with both feet without warm-up. Caution is warranted, though. There are also other factors and a what-if case that’s becoming increasingly important that need to be considered. While at it, take a look at the other gold trading tips to consider.

Let’s start with the last two points.

Thursday, February 20, 2020

Is Crude Oil Firmly on the Upswing Now? / Commodities / Crude Oil

By: Nadia_Simmons

It appeared that the bears firmly took the reins of yesterday’s session, but most of their gains were history before the closing bell. Have we seen an important turning point for oil?

Let’s start with the daily chart examination (charts courtesy of http://stockcharts.com and http://stooq.com ).

Crude oil opened yesterday’s session with the green bullish gap that’s slightly below the 61.8% Fibonacci retracement. Although the bulls took the commodity a bit higher after the market open, this strong resistance encouraged the sellers to act.

Thursday, February 20, 2020

Trump and Economic News That Drive Gold, Not Just Coronavirus / Commodities / Gold & Silver 2020

By: Arkadiusz_Sieron

Coronavirus, the topic du jour. It is still the major threat for the global health and economy. But we should not forget about other geopolitical and economic developments. What do they imply for the gold market?

Coronavirus, China’s Economy and Gold Prices

The number of cases of coronavirus reported by the WHO have increased from 45,171 cases and 1,115 deaths by February 12 to 51,867 cases and 1,669 deaths by February 16, 2020. However, the number of new cases is slowing down, which suggests that the epidemic could reach a turning point within weeks. This is of key importance not only for the global health but also for the global economy, as the sooner the epidemic is over, the quicker China’s economy will recover. As a reminder, the quarantines of the whole cities like Wuhan and other compulsory measures disrupted the supply chains and hampered the Chinese economy.

Thursday, February 20, 2020

Silver’s Valuable Insights Into the Upcoming PMs Rally / Commodities / Gold & Silver 2020

By: P_Radomski_CFA

The analysis of the precious metals market isn’t just gold analysis – there are times when silver rises to the forefront of everyone’s attention. And we fully expect such a moment of the white metal stealing the spotlight to arrive shortly. What lessons can we draw from the silver chart?

The key analogy in silver (in addition to the situation being similar to mid-90s) continues to be the one between 2008 and the 2016 – now periods.

Wednesday, February 19, 2020

David Smith: Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… / Commodities / Gold & Silver 2020

By: MoneyMetals

Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report and regular contributor to MoneyMetals.com. David, it's good to talk to you as always and how are you my friend?

David Smith: I'm just fine and it's great to be back, Mike.

Mike Gleason: Yeah, well it's been a handful of months since we had you on, and I've got a lot of topics to discuss today so we'll get right into it. Now to start out, here we are about a month and a half into the new year. Metals prices perked up in December but haven't really done much since that first week in January when it looked like we were about to head to war with Iran, which was a short-lived crisis thankfully. But in our view, markets are incredibly complacent, David. Stock prices just keep moving higher and higher. Nobody seems to be worried about risk, this despite there being plenty of reason for concern. To name a few, we've got a virus outbreak. There continues to be extraordinary activity in the repo markets – officials still haven't really bothered to explain what's going on there. And Brexit is finally happening. Maybe we're missing something, but it really feels like markets ignore all this stuff completely.