Commodity Trade Mantra

Posts Tagged ‘US Dollar Index’

While the World Binges on US Dollar, Gold Awaits the Purge

The best thing to do is continue carrying a piece of your assets in Gold and Silver to hedge when (not if) the USD falls. Gold will be easily north of $2,000 soon after the world is done converting its currency risk into USD. Then they will be left holding the bag as our Fed pulls the plug. and then you will be buying dips at $1800 and selling rallies at $2500.

The Safe Way to Play Emerging Market Stocks

There’s a lot to like about emerging market stocks. But like any investment, there are risks you have to consider. Today, we look at the biggest threat to emerging markets. But don’t worry. There’s a way to get around this risk. A strong dollar makes it hard for many emerging market companies to pay off their debts. Invest in countries with low levels of external debt like Russia, Brazil & India.

Gold Investment Demand to rise on Inflation & Pent-up Selling in Red-Hot Stocks & US Dollar

Stock investors owning essentially-zero gold exposure, have vast room to buy again when the wildly-overvalued stock markets inevitably roll over. Gold investment demand was triggered in 2016 by post-Fed-rate-hike stock selling delayed until January for tax reasons. Incentives to hold until January are far greater this year than most, since 2017 may see lower tax rates thanks to Trump.

With US Dollar so Strong, How come Gold Prices are yet so High?

Gold is about to have one of its worst quarters in nearly 35 years, but its price is still significantly higher than it should be right now & there does not seem to be any real reason why. Gold may have dropped by over 17% since its peak in the aftermath of Britain’s vote to leave the EU, but it is still significantly overvalued, and Macquarie can’t work out why.

Brutal Gold Futures Selling Seems to be Exhausting Itself

Nearly 2/3rds of long-side gold futures buying fueling 2016’s gold bull has been reversed! Thankfully this extreme gold futures selling looks wildly overdone. This supply of paper gold is very finite. And once all the weak-handed traders susceptible to being scared into selling low have largely exited, this extreme futures selling will dry up. Odds are this gold futures selling is exhausting itself.

Will Downward Trend in Gold and Silver Continue? A Look at Inflation is All You Need to Know

Despite this temporary setback, the long-term outlook is still looking positive for gold and silver. Financial turmoil is always a driving factor for additional bullion investments. Trump’s victory sent copper prices soaring more than $1,000, its best weekly performance since 1979. As a byproduct of base metal extraction, silver to rise on increased infrastructure spending & gold on inflation.

Time for Patiently Using Corrections & Patterns to Build Gold Positions

The correction is providing an opportunity to enter stocks that we thought got away. The question is precisely when to make those moves. If historic patterns around W-shaped corrections & reactions of gold to rate hikes persist, we could be looking at a strong start to 2017. This fall may be the time for patience & using patterns to position your portfolio for gold’s next leg up.

Price of Gold Could Rise a Lot Higher - In Fact Double

There’s a difference between the narrative, which is what you’re being told, versus the reality of the economic data. It’s in no one’s interest ahead of the election to say the U.S. economy is a mess. If the flood of bad economic data continues, the Fed will almost certainly print more money or cut interest rates. And that could easily send the price of gold through the roof.

Gold and Silver Bull Market Correction - The Cause & Eventual Powerful Rallies

With China closed the markets were open for rampant manipulation. The carnage in gold and silver bullion and mining shares represents a great buying opportunity because eventually these paper games will stop working. This is a bull market, and bull markets naturally experience corrections. Don’t let the correction knock you out of your positions, or prevent you from buying the dip.

Strength of Gold Against Foreign Currencies Confirms Bull Market Status

If Gold is going up only because of a falling US$, that is a US$ bear market, not a Gold bull market. A Gold bull market is Gold rising against the majority of currencies. Gold’s strength in foreign currencies confirms its global bull market status and provides a hint that more gains for Gold in US$ terms are likely ahead. We view any weakness in the weeks ahead as a buying opportunity.

The Medium-Term Gold Market Outlook Deteriorated Substantially Last Week

While the long-term outlook for gold could hardly be better, the short to medium-term outlook deteriorated substantially last week, with an important chart reversal on Thursday that was not negated by Friday’s bounce-back. Gold reversed violently intraday to close well down on Thursday on high volume, leaving behind a classic “shooting star” reversal on its chart.

Silver Futures Near $16.30 Resistance - Will Silver Prices Break Through?

Silver futures for May delivery climbed to $16.13 a troy ounce, putting it on pace for the highest close of the year on the Comex. Silver futures are likely to face stiff resistance near $16.30, a price level that has been difficult to penetrate since September 2015. A clear break above that level could expose a further upside rally in silver futures in the coming months.

The Gold-to-Silver Ratio: A Truly Generational Opportunity

Despite my ongoing belief that we are now in a corrective phase for the precious metals, I think that owning silver versus owning gold is a high-probability trade that could be the 2016 Trade of the Year. I am going to put on a trade this week that effectively favors silver over gold and is a high-risk method of shorting the Gold-to-Silver Ratio.

Gold Retreats as US Fed Members Turn Hawkish in Rate Hikes

Gold had been gaining traction earlier last week following a dovish report by Janet Yellen, the US Federal Reserve chairperson. Gold prices retreated following the rise in the US dollar index. With investors offsetting their positions to take profits and a hawkish view by other Fed members, the sentiment for gold seems to be negative.

How Much More Higher Could The US Dollar Go?

The US Dollar broke out of its multi-year downtrend and soared above 100. Needless to say, the USD did in fact strengthen a lot. After that initial leg up, the dollar has remained in a consolidation range for much of 2015. Though it recently broke out of a wedge/triangle formation to the upside, it’s not yet clear if this is a definitive move higher or more consolidation.

Copper Prices Decline To Levels Below Cost of Production

There are various estimates for what the Marginal Cost of getting Copper out of the ground is before supply is taken offline completely. But it is reasonable to assume that Copper is currently being priced well below the long term Production Cost of Processing the Industrial Metal. The $2 Copper could well be setting up for an ample short covering rally before 2015 ends.

Currency Devaluation Coming Soon To China

Keep your eye on the market & listen. The global trend in stock prices is still bullish. The market doesn’t yet see any reason to panic over these big picture forces that are playing out under the surface. We’re going through a mild correction but not enough to turn the market bearish. A Chinese currency devaluation might change that but it could still be a year or so away.

Gold Proving Amazingly Resilient Despite Howling Headwinds

Gold has had a rough time, facing selling pressure from record futures shorting. The resulting new secular lows have greatly exacerbated the already-extreme bearish psychology long plaguing gold. But considering the howling headwinds gold has suffered in recent years, it has actually proved amazingly resilient, indicating strong latent demand due to accelerate as sentiment shifts.

The Investment Case For Gold Remains Intact: WGC

Crucially, the long-term investment case for gold is not based on short-term price movements. Gold plays a more important role in a portfolio. Drivers of gold demand respond differently to different economic conditions. Heightened systemic risk typically boosts gold’s role as an insurance asset. Economic growth boosts jewellery demand. This makes if far more than a simple commodity.

Gold Futures Short Covering Rally

In the past, speculator short covering frenzies have pushed gold high enough to ignite new long-side buying by speculators. If this next short covering gold rally coincides with the lofty US stock markets and/or parabolic US dollar finally rolling over, there will be a big resurgence in gold investment demand way beyond speculator short covering.

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