Commodity Trade Mantra

Posts Tagged ‘Commodity Prices’

Gold Prices Lose Steam After Post-FOMC Rally, May Turn Lower

Gold prices struggled to find follow-through after posting the largest daily gain in two weeks following the FOMC rate decision. Initial elation at the flattening of the central bank’s projected rate hike path in the immediate aftermath of the policy announcement may be giving way to the realization that Chair Yellen seemed to all but promise a rate hike in December.

Will The Price of Silver Take a Breather Before Another Rally Kicks Off?

The price of silver has emerged as the perfect compensation for those whom the market inflicted losses last year. The price of silver appears set for a correction, which suggests the overbuying activity that took place in June could witness several cash outs in the coming weeks. But the overall direction of commodity prices suggests that this could just be a breather before another rally kicks off.

Silver Measures Wealth While Gold Stocks Increase It

Despite gold (& silver) & gold stocks (& silver) being connected; they operate on different cycles. It is for this reason that gold & silver bottomed around 2001, whereas many gold and silver stocks only bottomed around 2015/2016. What has been despair & disappointment, due to the lack of gold and silver stock performance, is now the reason for great opportunities.

How Gold and Silver or Other Commodity Prices Are Set

The price of everything in the world has a price discovery process, which is just a fancy way of saying how prices get set. But what used to set prices and is still thought by most to continue to set commodity prices, no longer sets price over the intermediate time frame. The process has been completely upended & there has been a price setting revolution in some important world commodities.

Rising Commodity Prices Signal Inflation - Purchasing Power Collapse

Asset inflation is increasingly spilling over into commodities, the feedstock for final goods. Unless commodity prices start falling soon, they are certain to drive up record price inflation, despite the lack of economic activity in the advanced economies. The official line, that there is almost no price inflation, is misleading everyone. Monetary inflation withdraws purchasing power from the masses.

Why We Need Oil Prices to Rise to $120 Per Barrel or More

When oil prices fall from $100 per barrel to $50, the incomes of a large share of people are adversely affected. This drop in income tends to radiate outward to the rest of the economy because each worker who is laid off is forced to purchase fewer discretionary items & is also less able to take on new debt, such as to buy a new car or house.

A Technically Reasonable Correction in Gold Prices

For those who persist in looking at gold as an investment, the fall in gold prices in May is simply within the bounds of a normal correction. But they would be missing a vital point & that is by buying gold they are selling an inferior form of money. Not only is the dollar already demonstrably overvalued when priced in gold, but there is a growing inevitability of a further, substantial declines.

Bull Market in Commodities - Central Bankers to be Blessed with Inflation Soon

Commodities are now nearing bull-market territory after rebounding from the lowest level in at least 25 years. Investors have poured more than $17 billion into exchange-traded products linked to commodities since the start of the year. Sharply rising commodity prices since the beginning of the year are a warning sign that perhaps the inflationary times have begun.

The Rally in Commodity Prices has Surprised Many - Will it Continue?

The recent rally in commodity prices has surprised many market participants and has greatly supported the stock market’s rebound. It has also made bulls out of a number of former stock market bears, as one of its side effects was to cause an improvement in market internals. But will the rally actually continue? As always, there are arguments – for & against.

Inflation: A Semantic Change Worth Noting

The concepts of inflation & deflation have been completely misconceived by the public and economists alike. The semantic revolution has changed the traditional connotation of these terms. What people call inflation or deflation is no longer the increase or decrease in the supply of money, but its inexorable consequences, the tendency toward a rise or a fall in commodity prices & wage rates.

Why the Fall in Oil Prices is a Problem for Everyone

The increase of oil prices during the ‘70s caused inflation and recession in Europe & the US while oil producers were building a trade surplus & currency reserves. On the other end, in the late ‘80s & all of the ‘90s, the collapse of commodity prices contributed to a long period of economic growth in industrialized countries & caused serious problems for some oil producers.

Inflation Expectations, Fears, are Rising and Markets are Responding

When I ask if inflation is about to make a comeback, what I’m really wondering is if the value of the dollar is about to fall. I prefer these measures not because they are more accurate – although I think they generally are – but because they are more timely. Prices will follow the value of the dollar eventually but the impact on investments is much quicker.

Gold Deposits Worth $2-$3B That Can Be Bought Now For $15Mn

Think about a company that has a very, very large gold deposit. This company 5 years ago would have had (while only owning half the deposit) a $2 billion market cap with one of the biggest copper-gold porphyry deposits in the world. Now it owns the entire deposit and has about an $80 million market cap for the whole deposit. You get twice as much for about 4% of the price.

A Recession Occurred The Last 16 Times This Happened

Something has just happened that has signalled a recession every single time that it has occurred since World War I. 16 times since 1919 there have been at least 8 month-over-month declines in industrial production during the preceding 12 month period, and in each of those 16 instances the U.S. economy has plunged into recession.

Gold In 2016: "The Economic Power Is Shifting"

In the near-term, paper gold is extremely oversold, reflecting the expression of western establishment sentiment in the paper markets. Compared with the situation at the time of the Lehman crisis, gold is significantly cheaper today, which is wholly at odds with the continuing systemic risk to fiat currencies from under-capitalised banks, unprepared for the prospect of markets normalising.

Betting on Deflation May Be a Huge Mistake. Here's Why

If the metals markets look forward, as markets are supposed to do, they will anticipate the Fed’s response to a strengthening dollar and economic malaise. In 2008, investors knew little about the lengths to which the Fed would be willing to go. Today they DO know. The Fed will overwhelm deflation by creating new inflation.

Commodity Crash Warns Of Imminent Deflationary Financial Crisis

Overall, the Bloomberg Commodity Index is down more than 28 percent over the past 12 months, and it has plummeted by more than half since mid-2011. The exact same patterns that we witnessed just prior to the great stock market crash of 2008 are happening once again. This includes the staggering crash of commodity prices that we are currently witnessing.

Why "Supply & Demand" Doesn't Work For Oil Prices

The costs of producing oil continue to rise, as a result of diminishing returns, so this fall in oil prices is clearly a problem. Low oil prices make future production unprofitable; it also leads to an increasing number of debt defaults. It is also inevitable that the price of oil must stop rising at some point because of the adverse impact on spendable income of consumers.

Is a $13 or $15 Handle, The Next Level for Silver?

The fundamental price of gold is about $150 over the market price, in other words, at about a 12.2% discount. Silver is trading below its fundamental price also, but only at a 4.2% discount. If it were to go to its full fundamental value, and assuming that doesn’t change, it would be up near $15. If it follows gold, at a discount of 12.2%, silver prices would be down near $13.

Get Ready for Commodity Liftoff: Global Manufacturing Just Made a HUGE Move!

We believe the real commodity liftoff should occur when the U.S., Europe, China & global PMIs all score above a 50.0, with the one-month readings above the three-month trends. Of those regions, China is the only one whose reading still trails below the 50.0 level. It’s crucial that China’s PMI move above 50.0, as the Asian giant is the top driver of global commodities demand.

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