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Metals

  #111 (permalink)
 
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 Schnook 
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Industrial metals were hit particularly hard. Nickel too. Move seemed larger than simple "risk off" but positions were clearly lopsided, and, well, the whole shooting star thing from last week ...


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  #112 (permalink)
Sagal
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Difficult time for PM, but this time I cannot prevent myself to notice that despite US 10y going from 1.544% to 1.627%? Gold went Friday 12 March from 1720 to 1696 but then closed at1719.8 usd/onces. Sure the 5y TIPS went from -1.56% on Monday 8 March to -1.73% on Thursday 11 but still....It would be really time that investors/funds realized that their rationale for the increase in the 10y rate is not the right one and that all the fundamental speaks to a much higher price for gold, silver and platinum. With the current price of the bitcoins I'm still convinced that things will happen in the right direction for PM...The seasonality will becoming more favorable in the next couple of weeks/months...
4h graph to illustrate

The other indicator yesterday that caught my eyes is this one:
"The Producer Price Index for final demand increased 0.5 percent in February, seasonally
adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.3
percent in January and 0.3 percent in December. (See table A.) On an unadjusted basis, the final
demand index moved up 2.8 percent for the 12 months ended in February, the largest increase
since rising 3.1 percent for the 12 months ended October 2018."

On a side note because I bought a physical ETF Platinum, I stopped rolling over futures on Platinum and consequently with less cash in hands I mostly focus on the micro futures for Silver.

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  #113 (permalink)
Sagal
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I rephrased the last sentence: the plan to roll over on platinum and silver (as my main focus for the 2021 year on a short term trading perspective) is still completely active. Entries or exit or re-entries are depending on the prices and the evolution of the general environment. I'm still convinced that there is no need for me this year to look at something else...Investing in a platinum ETF frees me from the "fomo" and therefore has the potential of allowing me to be more sharp on entries and exit on futures.
It is about specialization in one or two commodities and be fully focus on them in relation even with longer perspective in mind than daily trading:

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  #114 (permalink)
Sagal
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I read the info first in zerohedge and then to the source: reuters (it is an important news!):
https://www.reuters.com/world/china/exclusive-china-opens-its-borders-billions-dollars-gold-imports-sources-2021-04-16/

This news is also quite favorable
https://www.gold.org/goldhub/gold-focus/2021/04/china-gold-market-march-21-gold-etf-reached-record-high

No change in my strategy, despite the difficult time since I posted for the last time (one month ago), I am counting more specifically on seasonality from May to August.

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  #115 (permalink)
 
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 Schnook 
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I just watched an interesting presentation about gold by Larry Williams ( link). He covers certain seasonal and cyclical patterns that he's observed, as well as an interesting negative correlation between gold and natural gas with a 25-day lead (at around the 20 minute mark).

I actually find this highly counterintuitive, for two reasons. One is due to the currency effect: all else being equal, when the dollar is down, both crude and gold are supposed to go up together, right? And secondly, given how energy-intensive the gold mining and refining process is, increased production costs associated with rising NG prices should pressure producer margins, thus reducing the amount supplied at current prices.

Again an inverse relationship between gold and energies seems weird to me but perhaps it warrants further study. I'd be very curious to hear other peoples' experiences and observations.

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  #116 (permalink)
 
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 SMCJB 
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I believe this is a headwind that Gold has been fighting this year. Flows out of Gold ETFs.

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  #117 (permalink)
 
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 Schnook 
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One has to wonder how many of those outflows are being redirected towards cryptos. Gold used to be the anti-dollar. Today that crown is worn by bitcoin.

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  #118 (permalink)
Sagal
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Schnook View Post
I just watched an interesting presentation about gold by Larry Williams ...
...
Again an inverse relationship between gold and energies seems weird to me but perhaps it warrants further study. I'd be very curious to hear other peoples' experiences and observations.

From what I read up to now and it makes perfectly sense as extracting gold is energy intensive: it is more a correlation between price of oil and price of gold but this is on a certain period of time to be considered (it makes sense as well you need price of oil higher and for a long period to definitely have impact on price of gold or other metals anyway). Now maybe the time unit he is considering is a short one (2-3 weeks?)
(I will really have to watch the video, as I read one of his book on COT.
Edit 45mn videos, not it is far too long, an article I can read in diagonal not so easy with a video...)
Anyway there is no secret with gold, you buy low, you hold and maybe you sell at the top...(depending of your age and your plans). Obviously we are not at a top and seeing Bitcoin reaching 64K and anyway well above 40K means there is a good way up for Gold. There will be always the ones that want fast money (bitcoin and cryptoassets) and the ones that will play safe and therefore gold...

I may be wrong but I expect at least 2400 dollars per once if not this year, next one...so current price will seem a good price along the road...

I read the first part of the following and it is already a good summary of the correlation

https://seekingalpha.com/article/4420189-coming-oil-shortage-part-i

Part 2 is there
https://seekingalpha.com/article/4420998-coming-oil-shortage-part-ii

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  #119 (permalink)
 
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 Schnook 
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I skimmed the article. The author is "Goldmoney," who, according to their own description "is engaged in precious metal sales to its clients." Their articles are pretty much always just thinly veiled advertisements masquerading as research. If you look at their other articles, a theme emerges. https://seekingalpha.com/author/goldmoney

And unfortunately, I found nothing in their article describing why, how, and to what extent crude oil prices should influence gold prices. They just bragged about their wonderful model, and then went on to describe their outlook for crude oil. Surpise - they're bullish!

Sorry if I sound a bit cynical, but I never trust research written by salespeople. The precious metals world, unfortunately, is teeming with these vermin. Seeking Alpha, meanwhile, ought to just change their name to "seeking advertisers"

Again, I apologize for being such a cynic, and I really do appreciate your contributions, @Sagal, I just don't put much stock in "Goldmoney" as a reliable source.

If I find anything else of interest on this subject I will share

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  #120 (permalink)
Sagal
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too bad as I have another one describing the importance of the energy price in the cost of the gold miners
https://seekingalpha.com/article/4186837-gold-price-framework-vol-2-energy-side-of-equation-part-ii

Another gold miners report was as well pretty clear about that it is in the industry between 20 and 45% of the cost and in their case the 2nd after the salary (slides 7 and 8)
https://www.goldfields.com/pdf/investors/presentation/2019/decarbonizing-and-energising-the-mine-of-the-future-v7.pdf

Unless what you are looking for is simply a correlation graph (this one is from Ingoldwetrust 2011)

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