Archive for Metals

Q2: Chen ‘Excited’ for Silver’s Possibilities

Source: Streetwise Reports (3/28/23)

The start of Q2 is fast approaching and one thing has not change for asset manager Chen Lin: he’s still bullish on silver and precious metals.

The start of Q2 is fast approaching, and one thing has not changed for asset manager Chen Lin: he’s still bullish on silver and precious metals.

The author of the What is Chen Buying? What is Chen Selling? newsletter told Streetwise Reports that several companies have him “excited” about future possibilities right now.

Silver is great at coating electrical contacts, and it’s an important element in solar technology. Almost all computers, phones, cars, and appliances contain the metal. Because of this growing demand, the Silver Institute predicted global demand for silver would reach a new high of 1.21 billion ounces in 2022, up 16% from the preceding year.

“Physical investment (in silver) in 2022 (was) on track to jump by 18% to 329 (million ounces) Moz, which would also be a new record,” the report said.

Silver prices have gone up US$3 an ounce since March 7; Chen said he thinks it’s just “the beginning.”

While one of the companies Chen recommends will be familiar to his readers, there are some surprises, including a country you might not associate with precious metal mining.

First Majestic Silver Corp.

What has Chen so excited?

First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) recently announced it was suspending all mining activities at its Jerritt Canyon Gold Mine in Nevada.

The company said it had been focused on increasing mining rates there to feed the processing plant at a minimum of 3,000 tonnes per day but has never hit that threshold since buying the project about two years ago.

The news of the suspension sent First Majestic’s stock sinking 24% in one day.

Chen said he knew Jarrett Canyon was an issue for the company and has “been waiting for this day for a long time.”

“It’s a good opportunity,” Chen said. “Today is a happy day, and I will start loading up on First Majestic.”

Streetwise Ownership Overview*

First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE)

	Retail: 66%
	Institutions: 32%
	Insiders & Management: 2%
	Strategic Investors: 0%

66%

32%

^*Share Structure as of 3/27/2023

While the mine accounted for 21% of the company’s revenue in 2022, First Majestic still has three other major properties: San Dimas, Santa Elena, and La Encantada in Mexico. It also recorded record annual revenue in 2022 and just renewed a share repurchase program.

“They have free cash flow,” Chen said. “It was just a mistake to buy Jarett Canyon.”

A research note by Jefferson Research on March 24 rated its cash flow “strong.”

First Majestic said it still intends to process about 45,000 tonnes of above-ground stockpiles through the plant at Jerritt Canyon and will continue exploration activities at the site.

“The company will continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon’s resources, which we believe will significantly enhance the economics for the eventual restart of operations,” First Majestic said.

According to Yahoo Finance, about 2% of First Majestic is held by insiders, and 32% is held by institutions. The rest is retail.

Insider shareholders include President and Chief Executive Officer Keith Neumeyer, who owns 1.56% or 4.1 million shares, Reuters said. Top institutional owners include Van Eck Associates Corp. with 9.99% or 26.27 million shares and the Vanguard Group Inc. with 3% or 7.88 million shares.

It has a market cap of US$1.74 million with 263 million shares outstanding, 256.2 million of them free-floating. It trades in a 52-week range of US$14.59 and US$5.53.

i-80 Gold Corp.

Another precious metal stock Chen likes in the second quarter is i-80 Gold Corp. (IAU:TSX; IAUCF:OTCQX), which is focused on its five projects in northern Nevada: Lone Tree, Ruby Hill, Granite Creek, McCoy-Cove, and Buffalo Mountain. Its stated goal is to achieve mid-tier gold producer status.

The stock moved as high as CA$3.52 in February but sank to CA$2.97 on March 7 when news broke that major shareholder Equinox Gold Corp. (EQX:TSX; EQX:NYSE.A) was selling CA$32 million in shares in a private placement. Equinox’s ownership went from about 25% to about 20%.

However, the company has recently made discoveries at its Ruby Hill project and graduated to producer status at Granite Creek.

Streetwise Ownership Overview*

i-80 Gold Corp. (IAU:TSX; IAUCF:OTCQX)

	Institutions: 49%
	Retail: 28%
	Insiders & Management: 23%
	Strategic Investors: 0%

49%

28%

23%

^*Share Structure as of 3/27/2023

“It makes a very good opportunity now,” Chen said. “And they continue making the discoveries of very high-grade gold, silver, and base metals in the middle of Nevada. I like the price.”

The stock had risen to CA$3.11 per share by Monday morning.

The company, which started trading on the New York Stock Exchange last May, said it had gold sales of more than 21,000 ounces in 2022, increased the size of Granite Creek by more than 500 hectares, and completed a total of more than 240,000 feet of drilling.

The National Bank of Canada was neutral on i-80 Gold’s fourth-quarter 2022 results released recently, saying there were “no surprises.” It gave the company an outperform rating with a CA$5.50 target.

About 23% of the company is held by insiders, and about 49% is held by institutions, according to Yahoo Finance. The rest is retail.

The top insider shareholder is Chief Executive Officer and Director Ewan Downie, with 2.24% or 5.53 million shares, Reuters said. Top institutional shareholders include Equinox with 19.98% or 49.24 million shares, Sprott Asset Management LP with 8.45% or 20.81 million shares, and Orion Resources Partners (USA) LP with 8.24% or 20.3 million shares.

It has a market cap of US$548 million with 246.4 million shares outstanding, 169.69 million of them free-floating. It trades in a 52-week range of US$3.18 and US$1.52.

Cerro de Pasco Resources Inc.

Chen also has high hopes for Cerro de Pasco Resources Inc. (CNSX:CDPR; OTCMKTS:GPPRF), focused on the development of the El Metalurgista mining concession in Peru.

It recently announced that it had signed a memorandum of understanding with Volcan Compania Minera to collaborate in the first phase of exploring the Quiulacocha Tailings Project at the site.

Glencore International Plc (GLNCY:OTCMKTS) is providing a US$2 million loan to cover the costs of the first phase of the project, including geophysical studies, sonic drilling, laboratory testing, mineralogy studies, resource estimation, and economic assessment.

Streetwise Ownership Overview*

Cerro de Pasco Resources Inc. (CNSX:CDPR; OTCMKTS:GPPRF)

	Retail: 59%
	Insiders & Management: 23%
	Institutions: 18%
	Strategic Investors: 0%

59%

23%

18%

^*Share Structure as of 3/27/2023

Volcan will allow Cerro de Pasco rights to process materials through its processing plants.

The Glencore loan is unusual, Chen said. The Peruvian government is also collaborating by giving the company a special designation.

“Glencore is really interested in their deposits,” Chen said. “We should have some very exciting results coming out in the fall.”

The stock was at CA$0.105 on Monday afternoon.

“Right now is the best time to buy the stock in the past five years,” Chen said. “Once people wake up, I expect the stock will have a huge performance.”

About 23% of the company is owned by insiders, according to Yahoo Finance, and 18% is held by institutions. The rest is retail.

According to Reuters, top institutional holders include LH Financial Services Corp., with 18.37% or 52.89 million shares, and Gordaldo Ltd. With 10.82% or 31.15 million shares. Executive Chairman Steven Zadka leads insiders with 8.72% or 25.1 million shares.

Cerro de Pasco has a market cap of CA$30.2 million with 287.9 million shares outstanding, 222.88 million of them free-floating. It trades in a 52-week range of CA$0.28 and CA$0.07.

Irving Resources Inc.

Another company that has Chen’s attention is Irving Resources Inc. (IRV:CSE; IRVRF:OTCQX), a Canadian explorer going after gold and silver in Japan.

The country is known for some of the highest-grade gold mines in the world, and there are dozens of past-producing epithermal mines, Irving Resources said. But Japan shut down most of its gold production to focus on base metals during World War II, and little exploration has occurred since then.

Few mines there have seen modern-day exploration techniques like drilling, the company said.

Chen said he plans to visit the mines there with renowned geologist Quinton Hennigh, who is a director and technical advisor for the company, next month.

“It should be a very exciting story,” he said.

Streetwise Ownership Overview*

Irving Resources Inc. (IRV:CSE; IRVRF:OTCQX)

	Retail: 65%
	Strategic Investors: 24%
	Insiders & Management: 10%
	Institutions: 1%

65%

24%

10%

^*Share Structure as of 3/27/2023

Earlier this month, Irving announced it had discovered a new high-grade vein system in a newly drilled hole near the historic Hokuryu mine at its flagship Omui project in Hokkaido.

The company encountered veins extending 33 meters and grading 1.35 grams per tonne gold (g/t Au) and 15.45 g/t silver (Ag).

Irving Resources said it has started an aggressive exploration program for this year, testing multiple new drill targets and vein extensions at Omui.

Newmont Corp. (NEM:NYSE) owns 18.34% of the company, Irving said, while Japan Gold Corp. (JG:TSX.V) is partnering with Barrick Gold Corp. (ABX:TSX; GOLD:NYSE).

“So, the largest mining companies are very interested in Japan,” Chen said.

The company said management and directors own about 10%, and strategic investors Newmont and Sumitomo Corp. (8053:TKY; SSUMF:OTCPK) own 18% and 6%, respectively. Yahoo Finance said about 1% is owned institutions. The rest is retail.

According to Reuters, top insiders include President and Chief Executive Officer Akiko Levinson with 4.78% or 3.46 million shares and Hennigh with 3.14% or 2.27 million shares.

Irving Resources has a market cap of CA$85.5 million with 72.4 million shares outstanding, 41 million of them free-floating. It trades in a 52-week range of CA$1.84 and CA$0.63.

First Tellurium Corp.

Finally, Chen recommended a company he’s picked before, First Tellurium Corp. (FTEL:CSE).

Tellurium is another element important to the new green economy, as it is critical to solar panels and lithium batteries. It has also been used to vulcanize rubber, tint glass, and manufacture rewritable CDs and DVDs.

First Tellurium’s Deer Horn property in British Columbia is known to have the only positive Preliminary Economic Assessment (PEA) for a tellurium project (Te) in North America. It’s named by First Solar as one of only four world-class Te projects.

“There’s a very decent chance tellurium will breakout this year, because First Solar is using 60 to 70% of worldwide production to make a solar panel,” Chen said. “Their production has grown rapidly.”

Streetwise Ownership Overview*

First Tellurium Corp. (FTEL:CSE)

	Retail: 89%
	Management/Insiders: 11%
	Institutions: 0%
	Strategic Investors: 0%

89%

11%

^*Share Structure as of 3/27/2023

Recent International Energy Agency (IEA) forecasts show that solar photovoltaic (solar PV) technology will generate more power by 2027 than any other source.

Deer Horn also has a large silver resource, the company said. Silver is another important element in solar panels.

“We have a very attractive mix of precious and green metals, including copper porphyry mineralization, in a time of strong metals markets,” First Tellurium President and Chief Executive Officer Tyron Docherty said.

According to the company, 11% of First Tellurium is owned by management and insiders. Docherty owns 10.50% or 7.63 million shares, Director Josef Anthony Steve Fogarassy has 1.38% or 1 million shares, and Director Lyle Allen Schwabe has 0.77% or 0.56 million shares. There are no institutional investors, and the rest is retail.

The company has a market cap of CA$11.6 million, with 72.7 million shares outstanding, 63.46 of them free-floating. It trades in a 52-week range of CA$0.255 and CA$0.085.

Disclosures:
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: First Tellurium Corp. Please click here for more information.

3) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Majestic Silver Corp. and First Tellurium Corp., companies mentioned in this article.

Financial News Metals

28 Mar

There Never Is ‘Only One Cockroach’

Source: Michael Ballanger (3/27/23)

Michael Ballanger of GGM Advisory Inc. reviews the current state of the market, where he believes the Fed is heading, and one gold stock he says is a best performer.

It seems like it was only yesterday that the Great Financial Crisis involving an even Greater Financial Bailout was raining massive stock and bond market losses on the investing public, but it was not on anyone’s radar screen until a small, obscure hedge fund run by Bear Stearns traders blew up in spectacular fashion.

That was March 2008, and only after Jamie Dimon wrangled loan guarantees from the Fed and Treasury that JP Morgan bought Bear for the ungodly sum of US$2.00 per share a mere nine months after hitting an all-time high north of US$170.

That event was the first cockroach that anyone had seen in a kitchen that would eventually be teeming with them. With the U.S. real estate market rocketing northward in a greed-fueled orgy of house-flipping, multiple units leveraging, lying, cheating, and outright fraud, then-Fed-Chairman Ben Bernanke swore black and blue that the subprime issue that brought down Bear Stearns was “contained.”

I learned decades ago at the Wharton School that when the Fed is openly hostile to stocks with restrictive monetary policy, keep your money in your pocket.

The second little critter that slithered its way into sight was the Lehman Brothers implosion six months later in September 2008, when Treasury Secretary Hank Paulson, along with all of the member banks of the Federal Reserve, decided to make a martyr out of them, forcing Lehman into bankruptcy and nearly sending the entire financial system into liquidity purgatory.

With Lehman, it was as if someone flipped in the kitchen fluorescent at 3 a.m. because, as Mr. Buffett says, “they all started scurrying around” as it suddenly and shockingly became known that those cockroaches that had been feasting on the spoils of compromised rating agencies and an overly-easy monetary regime were none other than all of the major banks and brokers on Wall Street.

As history unfolded and revelations came to the surface about what really happened, every one of those cockroaches was doomed without a Fed/Treasury department lifeline — bailout — and that is exactly what they got. The problem remained that the issue of moral hazard was severely breached, and for the last fourteen years, the bugs are still feeding on the spilled flour and overturned rice bowls upon which they fed voraciously into the wee hours of the night, which abruptly ended in early 2022.

A couple of months ago, the big crypto bank servicer, FTX, was gutted by a combination of stupidity and greed but had the tight money policies of the U.S. Fed been allowed to prolong the speculative mania, the fraud might have been extended for quite awhile longer. Then two weeks ago, we read of the bank run, and subsequent failure of the eighteenth-largest bank in the U.S., Silicon Valley Bank, along with Signature bank, were taken over by the FDIC in order to protect depositors who were caught in the marked-to-market debacle inflicted upon these regional banks by a Fed that basically ensured investor that inflation (and rising interest rates) were “transitory.”

He Who Loses the Least Wins

Right on the heels of that fiasco arrives the even-greater plight of Swiss investment banking giant Credit Suisse, and after the powers that be conspire to throw them under a bus with a forced US$3.25 billion buyout by UBS, they now have to deal with another extremely delicate situation with news that Germany’s Deutsche Bank is also now having liquidity issues.

The issues affecting the global banking fraternity are not going to disappear overnight because we have experienced over 14 years of a complete and total disregard for the policies needed to provide a sound money environment for workers and savers.

Protecting U.S. dollar hegemony and suppressing the ability of the free market to accurately identify the proper price for goods and services has taken precedence over natural price discovery which was one of the most important attributes of pre-Bretton Woods where spendthrift countries lost their gold and invited regime change through the proper function of the voting booth.

In 2023, those concepts have gone foreign because in a Constitutional republic like the U.S.A., money, not integrity, controls votes, and once in power, even the most honest of politicians are corrupted by the narcotic allure of political power.

Hence, the issuance of trillions upon trillions of bonds with negative coupons were flogged largely into Europe but irreverently into pension and insurance funds with the wink and nudge from the central bank charlatans that borrowing costs would remain “lower for longer,” thus implying little need for hedging the direction of interest rates.

Now that we have an unknown number of banks that are sitting with large portfolios of high-quality bonds bought at prices that reflect a zero rate versus a 4.5% rate, the evil sorcerer called “duration” has cast an ominous spell on those banks that thought the Fed would “have their backs” rather than twisting a very sharp stiletto into them.

As an investor, I am forced to assume that since the kitchen lights are low that the crunching, munching sound from the pantry is not just the one cockroach that I boot-stomped this morning but rather a legion of insectine brothers, sisters, nieces, and nephews all awaiting the harshness of light before scurrying into the cubbies, nooks, and crannies of the kitchen.

Bottom line: this is a very tough market to trade, but those that have simply kept their feet in the stirrups since mid-October has been the real winners.

Just as subprime was never “contained” to just a couple of wild-eyed hedge fund jockeys at Bear Steans in the Spring of 2008, the current problem with depositors leaving the impaired regional banks in favor of the chosen safety of the bigger, too-big-to-fail, member banks is a problem that will be around for a long time.

It is not “different” this time because the only thing keeping your money in any specific financial institution is trust.

It is said of a certain breed of woman in Eastern Europe that “When the money’s gone, the love is sure to follow.” I would forward the same principle for depositors of savings, and that is: “When the trust is gone, the cash is soon to follow.”

The cartoon shown above is a stark reminder of what happens when “the smartest guys in the room” run out of highly profitable (and highly confusing) products to pitch to their clients with one eye on the risk and the other on their bonus poll and many times with both eyes locked in mortal combat. When markets move higher but without leadership and where tail risk (the chance of a negative market event) is high, the stock market wizards have been known to drop back ten yards and punt, meaning, of course, that they opt for the safety of simplicity.

Listening to CNBC this afternoon, there are more bond bulls these days than I can ever remember, and when asked why the emphasis on bonds, it is always because they want to wait “until things clear up” before committing to equities. The reality is that these were the same geniuses that were piling into the SPACs and FAANGS and “story stocks” back in mid-2021, just before the Fed decided to remove the punch bowl. I learned decades ago at the Wharton School that when the Fed is openly hostile to stocks with restrictive monetary policy, keep your money in your pocket.

In bear markets, as the late Richard Russell would hammer home, “he who loses least wins.”

Gold and Silver

The gold market opened above US$2,000 on Friday morning, with the SPDR Gold Shares ETF (GLD:NYSE) within US$0.26 of a 52-week high and the highest trade since the Russian invasion of Ukraine in early March 2022. I took one look at the way markets opened at 8:30 a.m. with a gap that was immediately filled in by the Crimex pit traders but then rallied hard until the GLD:NYSE opened at 9:30 am, at which point the same selling sent prices straight south.

The market went out with a US$16 loss versus a US$11 gain. Silver eked out a modest US$0.02 gain which was great, but with the equity markets under pressure early due to the Deutsche Bank action, it came as no surprise that the German Chancellor made a calming statement concerning DB after which the boys went to work such that the big “fear bid” in gold and the gap down in stocks were completely reversed by the end of trading.

Allied Copper Corp. (CPR:TSX.V; CPRRF:OTCQB)

Nevertheless, I am looking to take a leveraged position in gold through either options or futures next week, but for now, remaining on the sidelines has kept us from getting whipsawed. Traders must discipline themselves to take positions in silver only during deep drawdown sessions because drawdowns are getting bought and spikes are being faded in daily action best described as “choppy.”

Bottom line: this is a very tough market to trade, but those that have simply kept their feet in the stirrups since mid-October has been the real winners.

Good news should be hitting the screens shortly for Allied Copper Corp. (CPR:TSX.V; CPRRF:OTCQB) where a press release on Wednesday confirmed April 20^th as the date for the name change to Volt Lithium Corp.

They also reported that a position belonging to former Volt shareholders totaling 33,984,000 shares had been filed under a voluntary lock-up agreement.

The stock closed up 10% for the day at CA$0.275 and in an environment where many of the Li names have been under pressure.

The shares are ahead 111.54% since October 31^st, when they first announced intentions to merge, and show up 145% YTD making CPR:TSXV one the best performers on the board. If everything works out as advertised, the upside potential for this company is truly striking.

The group of juniors that I own is still stuck in neutral, and despite the fact that everyone is complaining about the same lack of excitement, it does not make it any easier. I happen to believe that rising metal prices combined with declining energy costs are the perfect elixir for a bull market in the developers which will reward the opportunistic investor.

Disclosures:

1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Allied Copper Corp. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Allied Copper Corp., a company mentioned in this article.

Financial News Metals

27 Mar

Gold Shines Brighter Even in Difficult Times: What is the Reason for the Price Increase

By RoboForex Analytical Department

Gold continues its impressive streak of gains for the fourth week in a row. At the beginning of this week, the price of a troy ounce of the precious metal is around 1,973 USD.

This increase in the price of gold indicates that the market is looking for a “safe haven” from the effects of the banking crisis, which remains one of the main threats to the global economy. In addition, the US Federal Reserve’s ambiguous stance on the future interest rate makes gold quite attractive to investors.

At the end of last week, the European banking sector came under pressure again, which caused an increase in anxiety in stock markets around the world. The concern was caused by the decline in the shares of the largest European bank Deutsche Bank.

Against the backdrop of this uncertainty, gold is again becoming a “safe haven” for the capital market, which makes it one of the most demanding investment assets in the face of economic uncertainty. Some analysts believe that the price of gold may continue to rise in the near future, until there is stability in the financial markets.

On H4, XAU/USD has performed an impulse of decline to 1934.24 and growth to 2003.30. At the moment, a consolidation range is forming at these levels. If the price breaks out of it downwards, a link of correction to 1895.00 might follow. If the price breaks through upwards, the wave might continue to 2012.12. Technically, this scenario is confirmed by the MACD. Its signal line is above zero, directed strictly down to renew the lows.

On H1, XAU/USD has performed a structure of decline to 1977.90. At the moment, a consolidation range is forming around it. With an escape from it downwards, the wave might continue to 1952.50. Then growth to 1977.90 might follow, and then — a decline to 1927.00. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is above 20, aiming strictly upwards.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Metals

26 Mar

COT Metals Speculators pushed their Gold bullish bets to 7-week high

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday March 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

* This COT data is fully up-to-date after weeks of delays due to a cybersecurity event that happened in early February to ION Cleared Derivatives (a subsidiary of ION Markets). The hacking incident had disrupted the ability for the CFTC to report large trader positions.

Weekly Speculator Changes led by Silver & Gold

The COT metals markets speculator bets were higher this week as three out of the five precious metals markets we cover had higher positioning while the other two markets had lower speculator contracts.

Leading the gains for the metals was Gold (18,274 contracts) with Silver (4,681 contracts) and Copper (1,805 contracts) also showing positive weeks.

The markets with declines in speculator bets for the week were Platinum (-1,047 contracts) and Palladium (-550 contracts) also registering lower bets on the week.

Gold bets on the rise

Highlighting the COT metals data this week is the recent bullishness for the Gold speculative positions. The large speculator position in Gold futures advanced this week for a second straight week and for the fourth time out of the past five weeks. The Gold position has gone from a total net position of +105,529 contracts on February 14th to a new 7-week high at a total of +158,605 contracts this week with the five-week total of speculator bets showing a gain of +53,076 contracts. The speculator strength score (0 to 100 range) for Gold has risen to 47 percent while the 6-week speculator strength score trend has shown a rise of 13 percent.

The Gold futures price closed below the $1,995 price level this week after touching its highest point in just about a year over the $2,014.00 threshold on Monday. Gold has gained over 20 percent since its recent low levels in early November that saw the price fall to approximately $1,618.30.

Data Snapshot of Commodity Market Traders | Columns Legend

Mar-21-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	469,874	22	158,605	47	-183,568	53	24,963	43
Silver	119,082	0	3,462	23	-12,681	79	9,219	17
Copper	201,636	44	-12,351	17	7,536	80	4,815	49
Palladium	11,647	80	-7,018	1	7,369	100	-351	21
Platinum	61,416	45	9,526	38	-14,141	64	4,615	30

Strength Scores led by Gold & Platinum

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Gold (47 percent) leads the metals markets this week. Platinum (38 percent) comes in as the next highest in the weekly strength scores.

On the downside, Palladium (1 percent) and Copper (17 percent) come in at the lowest strength level currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (46.9 percent) vs Gold previous week (38.8 percent)
Silver (23.2 percent) vs Silver previous week (16.5 percent)
Copper (17.4 percent) vs Copper previous week (15.8 percent)
Platinum (37.6 percent) vs Platinum previous week (40.0 percent)
Palladium (0.7 percent) vs Palladium previous week (5.8 percent)

Gold & Platinum top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Gold (13 percent) leads the past six weeks trends and is the only positive mover for metals.

Palladium (-27 percent) leads the downside trend scores currently with Silver (-14 percent) as the next market with lowest trend scores.

Move Statistics:
Gold (13.1 percent) vs Gold previous week (-8.8 percent)
Silver (-14.4 percent) vs Silver previous week (-40.7 percent)
Copper (-13.3 percent) vs Copper previous week (-28.1 percent)
Platinum (-2.5 percent) vs Platinum previous week (-12.8 percent)
Palladium (-26.9 percent) vs Palladium previous week (-20.3 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week was a net position of 158,605 contracts in the data reported through Tuesday. This was a weekly rise of 18,274 contracts from the previous week which had a total of 140,331 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.9 percent. The commercials are Bullish with a score of 53.1 percent and the small traders (not shown in chart) are Bearish with a score of 42.5 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.6	25.9	10.1
– Percent of Open Interest Shorts:	16.9	65.0	4.8
– Net Position:	158,605	-183,568	24,963
– Gross Longs:	237,891	121,678	47,624
– Gross Shorts:	79,286	305,246	22,661
– Long to Short Ratio:	3.0 to 1	0.4 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.9	53.1	42.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.1	-11.8	2.0

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week was a net position of 3,462 contracts in the data reported through Tuesday. This was a weekly lift of 4,681 contracts from the previous week which had a total of -1,219 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.2 percent. The commercials are Bullish with a score of 78.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.4 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	34.7	40.9	18.8
– Percent of Open Interest Shorts:	31.8	51.5	11.0
– Net Position:	3,462	-12,681	9,219
– Gross Longs:	41,325	48,685	22,328
– Gross Shorts:	37,863	61,366	13,109
– Long to Short Ratio:	1.1 to 1	0.8 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	23.2	78.5	17.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-14.4	20.6	-38.8

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week was a net position of -12,351 contracts in the data reported through Tuesday. This was a weekly lift of 1,805 contracts from the previous week which had a total of -14,156 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 17.4 percent. The commercials are Bullish with a score of 79.8 percent and the small traders (not shown in chart) are Bearish with a score of 49.2 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.3	46.8	8.7
– Percent of Open Interest Shorts:	31.5	43.1	6.3
– Net Position:	-12,351	7,536	4,815
– Gross Longs:	51,095	94,353	17,564
– Gross Shorts:	63,446	86,817	12,749
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	17.4	79.8	49.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-13.3	15.9	-24.3

Platinum Futures:

The Platinum Futures large speculator standing this week was a net position of 9,526 contracts in the data reported through Tuesday. This was a weekly fall of -1,047 contracts from the previous week which had a total of 10,573 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 37.6 percent. The commercials are Bullish with a score of 64.2 percent and the small traders (not shown in chart) are Bearish with a score of 29.9 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.0	39.7	12.1
– Percent of Open Interest Shorts:	25.5	62.8	4.6
– Net Position:	9,526	-14,141	4,615
– Gross Longs:	25,199	24,399	7,431
– Gross Shorts:	15,673	38,540	2,816
– Long to Short Ratio:	1.6 to 1	0.6 to 1	2.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.6	64.2	29.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.5	4.9	-17.2

Palladium Futures:

The Palladium Futures large speculator standing this week was a net position of -7,018 contracts in the data reported through Tuesday. This was a weekly fall of -550 contracts from the previous week which had a total of -6,468 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.7 percent. The commercials are Bullish-Extreme with a score of 99.6 percent and the small traders (not shown in chart) are Bearish with a score of 20.6 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.0	73.0	10.6
– Percent of Open Interest Shorts:	74.3	9.7	13.6
– Net Position:	-7,018	7,369	-351
– Gross Longs:	1,633	8,498	1,234
– Gross Shorts:	8,651	1,129	1,585
– Long to Short Ratio:	0.2 to 1	7.5 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.7	99.6	20.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-26.9	25.1	-3.5

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Metals Opinions

23 Mar

Gold rises again as financial markets don’t believe Powell’s words

By JustMarkets

On Wednesday, the US Federal Reserve raised interest rates by 0.25% to 5% and maintained its outlook for another increase this year. Treasury yields rebounded from session lows, and interest-rate-sensitive sectors of the market, including technology, lost momentum. As the stock market closed yesterday, the Dow Jones Index (US30) decreased by 1.63%, and the S&P 500 Index (US500) lost 1.65%. The NASDAQ Technology Index (US100) was down by 1.60%.

The main theses of the speech of Fed Chairman Jerome Powell:

Another 25bp rate hike at the next meeting is possible, but it will all depend on incoming macro data;
FOMC is committed to getting inflation back to 2.00% to ensure price stability;
Inflation in commodity prices is declining, but progress in services is still insufficient;
The US banking system remains strong and resilient;
A Fed rate cut this year is not a baseline scenario;
Asset reductions in Treasury securities will continue (quantitative tightening – QT).

The benchmark Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of inflation, is projected to be 3.6% in 2023, up from the previous forecast of 3.5%. Inflation is expected to slow to 2.6% in 2024, but this is higher than the previous forecast of 2.5%. The 2024 rate forecast was raised from 4.1% to 4.3%. GDP growth forecast slightly lowered from 0.5% to 0.4% and from 1.6% to 1.2% in 2024. Labor market strength, which has played a role in sustaining basic services, is also expected to remain unchanged in the near term. The unemployment rate is expected to be 4.5% in 2023 from the previous estimate of 4.6% but will rise to 4.6% next year.

Meanwhile, the Fed’s balance sheet has also been in the spotlight after it began to expand again due to problems in the banking system. The Fed’s balance sheet now stands at $8.6 trillion, up from $8.34 trillion last month. The sharp change in the Fed’s balance sheet from contraction to expansion followed the rising cost of funding and the central bank’s new line of credit to support the banking system.

Bank of America, citing tightening lending standards, said it now expects just one more 25 basis point rate hike to raise rates to a ceiling range of 5.0% to 5.25%.

Europe’s stock indices were mostly rising on Wednesday. German DAX (DE30) gained 0.14%, French CAC 40 (FR40) jumped by 0.26%, Spanish IBEX 35 (ES35) declined by 0.44%, and British FTSE 100 (UK100) closed yesterday up by 0.41%.

Overall, UK inflation rose in February, rising to 10.4% y/y, up from 10.1% y/y in January and market expectations of 9.9%. Core inflation also rose sharply to 6.2% from 5.8%, half a point above market expectations. Such data will undoubtedly require the Bank of England to be more hawkish. Therefore, analysts are expecting a 0.25% rate hike today, with a possible another hike at the next meeting.

UK inflation is expected to fall sharply at the end of the second quarter due to lower energy costs. The Office of Budget Responsibility (OBR) forecasts that inflation will fall to 2.9% by the end of the year.

Falling US government bond yields on the back of the FOMC meeting caused gold prices to spike. Though earlier, when the words tightening and rate hike were used, gold declined. This suggests that investors have overestimated the current US Federal Reserve policy and do not trust the US central bank to tighten further. Although the Fed continues to reiterate that “the banking system is resilient and sound,” US Treasury Secretary Jennet Yellen said that “universal deposit insurance” is not an option – bank stocks immediately plummeted again. In fact, the market is showing that it does not believe the Fed’s words/forecasts. Gold prices may continue to rise, analysts suggested. In their opinion, the chance of new growth in gold prices is indicated by the banks’ difficulties and a possible turning point in the Fed’s policy.

Asian markets were mostly rising on Tuesday. Japan Nikkei 225 (JP225) grew by 1.93%, China FTSE China A50 (CHA50) gained 0.47%, Hong Kong Hang Seng (HK50) jumped by 1.73%, India NIFTY 50 (IND50) added 0.26%, and Australia S&P/ASX 200 (AU200) was up by 0.87% on the day.

Singapore’s core consumer price index remained at 5.5% y/y in February. The decline in service prices was generally offset by higher prices for retail sales as well as other goods and utilities, the Monetary Authority of Singapore (MAS) said in a statement. Analysts believe that core inflation in the country has peaked. At the same time, MAS said it forecasted a core inflation rate in the range of 3.5% to 4.5% in 2023.

On Thursday, the Hong Kong Monetary Authority (HKMA) raised its benchmark rate by 25 basis points to 5.25%. Hong Kong’s monetary policy is in step with that of the US Federal Reserve, as the HKD currency is pegged to the US dollar in a narrow range of 7.75-7.85 per dollar.

S&P 500 (F) (US500) 3,936.97 −65.90 (−1.65%)

Dow Jones (US30)32,030.11 −530.49 (−1.63%)

DAX (DE40) 15,216.19 +20.85 (+0.14%)

FTSE 100 (UK100) 7,566.84 +30.62 (+0.41%)

USD Index 102.54 −0.71 (−0.63%)

Important events for today:

– Hong Kong Interest Rate Decision at 04:30 (GMT+2);
– Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
– Hong Kong Consumer Price Index at 10:30 (GMT+2);
– Switzerland SNB Interest Rate Decision at 10:30 (GMT+2);
– Switzerland SNB Monetary Policy Assessment at 10:30 (GMT+2);
– Switzerland SNB Press Conference at 11:00 (GMT+2);
– UK BoE Interest Rate Decision at 14:00 (GMT+2);
– UK BoE MPC Meeting Minutes at 14:00 (GMT+2);
– US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
– US New Home Sales (m/m) at 16:00 (GMT+2);
– US Natural Gas Storage (w/w) at 16:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Metals

21 Mar

The Importance of Gold

Source: Streetwise Reports (3/20/23)

James Turk of Goldmoney, the impetus behind The Gold Report here at Streetwise, explains why he believes gold and silver are imperative assets to own in this current economy and how you can get involved with them.

Starting his career in the 1960s working for Chase Manhattan Bank in Thailand, The Philippines, and Hong Kong, James Turk has a long history in the world of finance. In 2001, Turk started goldmoney.com with his eldest son, Geoffrey.

GoldMoney (XAU:TSX) focuses on precious metals buying and selling, storage, coin retailing, and gold jewelry manufacturing and sales through a subsidiary, Menē.com, aka Menē Inc. (MENE:TSX.V; MENEF:OTCMKTS).

The company has clients in over 100 countries around the world and currently safeguards over US$2 billion of assets owned by its clients. Overall, Goldmoney has a reputation for success that comes with the reputation held by James Turk.

However, people don’t know that while James Turk is the force behind Goldmoney, he was also the reason The Gold Report was started.

A Discussion in the Mountains

The conversation started in the mountains. Gordon Holmes, the CEO and founder of Streetwise Reports, and James had been friends for years. Then one day, Gordon invited James to share a bottle of wine at Lookout Ridge (Gordon’s winery in California).

As they spoke about the market over a glass of pinot, James asked Gordon why he hadn’t stepped into the gold market yet. Gordon was honest and relayed to him that he didn’t believe he knew enough about the market to be all that involved.

That is when James looked Gordon in the eye and told him, “You’ll figure it out.”

And The Gold Report was born.

Without that fortuitous meeting, Streetwise Reports as we know it may have never come to be.

Why Gold?

Goldmoney may have been started in 2001, but Turk’s interest in gold was fostered from a young age. Growing up, Turk’s father and grandparents shared stories of fleeing from Austria’s hyperinflation after World War I.

Because of this, Turk said, “I’ve always been of the view that gold and silver had an important role to play in economic activity and that accumulating gold and silver was a means of saving — a way to save purchasing power.”

He went on to say, “It’s never too late to save money, but it doesn’t make sense to save fiat currency anymore because of negative interest rates. In other words, if you deposit money into a bank at the end of the year, you have less purchasing power. Even though you’re earning interest income, the inflation rate is higher than the interest income that you’re earning. So you’ll never get ahead that way. With physical gold and silver, you won’t be earning interest income, but you’re going to preserve your purchasing power over time.”

This is one of the reasons Turk is such an ardent advocate for owning some precious metals in a diversified investment portfolio.

Gold After Nixon

In our wide-ranging discussion, Turk also touched on the value of the U.S. dollar compared to gold beginning with President Nixon.

“Living and working in a bank through the 1970s was, for me, a life-changing experience. And obviously, something I’m never going to forget. Worryingly, there are a lot of similarities today to what occurred back then. But there are also some differences too.”

Turk explained that in the 70s, easy money printing caused inflation to soar out of control. When Paul Volcker was appointed chairman of the Federal Reserve in 1979, he kept raising interest rates until inflation began to decline. He did this to save the U.S. dollar when faith in the currency was rapidly eroding.

Turk said, “I’ve always been of the view that gold and silver had an important role to play in economic activity and that accumulating gold and silver was a means of saving — a way to save purchasing power.”

Turk went on to say: “At the peak, the interest income you could earn over and above the inflation rate was 6%, which is phenomenally high because the natural interest rate is normally about 1%.

It was enough to rebuild confidence in the dollar. Volcker eventually brought inflation under control by decreasing — and this is important — decreasing the growth rate of the quantity of dollar currency. He never actually decreased the quantity of dollar currency. There was never any deflation. It was just disinflation, but what’s happening this time around is different.”

“The Federal Reserve cannot simply raise interest rates to levels that Volcker needed to bring down the inflation rate. There’s too much debt in the economy. So now, what the Fed is doing is decreasing the quantity of dollars. This could lead to a deflationary economic collapse.”

Turk noted, “Ultimately, in a deflationary economy, the debtors end up in trouble. The debt burden increases because the value of the currency increases. Also, liquidity disappears in a deflationary environment. Anyone who’s heavily leveraged — like a lot of the banks — tends to suffer in that type of environment, as occurred in the 1930s. So it’s a very important time to be focusing on gold and silver because regardless of whether it’s inflation or deflation, gold, and silver will get you through the turmoil to the other side of the valley.”

In 1971, Nixon closed the gold window breaking its formal link to the dollar. Since then, the dollar’s purchasing power has been eroding, but this process began much earlier. The dollar has lost 98.5% of its purchasing power since the creation of the Federal Reserve in 1913. In recent decades this debasement of the dollar has accelerated.

Measuring in Ounces

Turk went on to say that while we calculate the price of things using the dollar, we must also be using ounces of gold or silver to measure prices.

“When looking at the price of crude oil going back to 1950, you get different results depending on the measuring stick used. If you measure oil in terms of ounces of gold, the price of crude oil hasn’t changed much. An ounce of gold buys about the same amount of crude oil today as in 1950.This example shows how gold preserves purchasing power over the long term. It does this because gold is natural money. The quantity of the aboveground stock of gold increases at approximately the same rate as the world’s population and new wealth creation. Because these growth rates are consistent, gold retains its purchasing power.”

“Gold and silver are not investments; they’re money. Gold and silver didn’t increase your wealth — your purchasing power — over these seven decades. They preserved it, which is one of money’s most important functions.”

“I like to tell a story that I remember from growing up in the 1950s. I think is very meaningful.”

“My parents would drive the family car to the local gas station and fill it up for US$2. Back then, the paper currency was silver certificates. You could also pay with silver coins, for example, two silver dollars or four half dollars.”

“Today, US$2 doesn’t even buy a gallon of gas. But the market value of the silver content of those old coins will still fill up the family car.”

The following chart of crude oil prices shows how gold and silver preserve purchasing, but national currencies do not. Measured in dollars, crude oil is 30 times more expensive than it was in 1950. The British pound has fared even worse, with oil 69 times more expensive today in that currency.

“There is one key point that people need to understand,” he continued. “Gold and silver are not investments; they’re money. Gold and silver didn’t increase your wealth — your purchasing power — over these seven decades. They preserved it, which is one of money’s most important functions.”

“Sterile assets like precious metals don’t generate cash flow. When their price rises, purchasing power moves from people owning national currency to people owning precious metals. The precious metals have value because they are useful as money.”

“What’s more,” Turk continued, “they are money that is not based on anyone’s promise, so they don’t have counterparty risk. For that reason, they provide unconditional liquidity. Your purchasing power placed in gold and silver is not reliant upon some bank or a government promise. And by measuring goods, services, and your investment portfolio in terms of ounces, you’ll come up with an entirely different perspective.”

“It is meaningful to use gold to measure accumulated wealth. You are measuring purchasing power with money that has proven its ability to retain its purchasing power over long periods of time — as we can see in the chart of crude oil prices.”

The Decline of the US Dollar

As faith in gold’s purchasing power rises, we see that trust in the U.S. dollar erodes, especially in an inflationary environment.

Turk pointed out that “if you look at measures completed by private economists, the inflation rate is much, much higher than what the government reports. So regardless of who you rely on to measure inflation, the dollar is losing purchasing power every day.”

Will the dollar collapse and become obsolete?

Turk replied: “That involves predicting the future, and unfortunately, no one can predict the future. All you can do is be prepared as best you can for any eventuality. And given their track record going back thousands of years, owning some physical gold and silver is one way to do that. If worse comes to worst, you’ll be prepared and ready by owning some gold and silver so that your wealth is diversified.”

He also favors the shares of precious metal mining companies but advised: “Owning gold and silver is different from owning the shares of mining companies. The shares are investments, not money. Buying shares in mining companies requires the same amount of diligent attention that you apply to any investment. For example, you need to look at the quality of management, the company’s mining property, their financial accounts, country risk where they operate, and many other factors.”

“The mining shares, in my view, are undervalued. They are not tangible assets like gold and silver. I consider them to be ‘near tangible’ because the mining companies own tangible assets in the form of mines and equipment that produce tangible assets.”

How to Store Gold

If you wish to be prepared and get involved in tangible assets, knowing how to store them is imperative. With gold and silver, you have two options. You can either store it yourself or pay for a professional firm to safeguard them for you — this is where Goldmoney comes in.

Turk explained, “Through Goldmoney, customers can store their precious metals in vaults operated by specialized vaulting companies in different places around the world. You can choose among different countries, different political risks, and different geographic risks so that you can diversify. Again, there is no one right answer. But if there is an answer that comes close to being the right choice, it’s diversifying your assets as much as practical.”

When searching for professional storage, Turk pinpointed the importance of working with a company that does independent third-party audits. In this way, you have assurances of integrity that your assets are properly cared for. Goldmoney currently safeguards over US$2 billion in customer assets worldwide.

Money and Liberty: In the Pursuit of Happiness & The Theory of Natural Money

If you’d like to learn more about the importance of gold and silver and how to incorporate them into your portfolio, these and many more topics are covered in James Turk’s latest book, Money and Liberty: In the Pursuit of Happiness & The Theory of Natural Money.

Money and Liberty was published by Wood Lane Books in November 2021 and is available on Amazon. It has been praised as “an excellent and insightful book” that provides “a clear but detailed history of the relationship of sound money to human freedom.”

Disclosures:
1) Katherine DeGilio wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

Metals Opinions

20 Mar

Tech Analyst Believes Now Is an Excellent Time To Add Positions

Source: Clive Maund (3/17/23)

Technical analyst Clive Maund of clivemaund.com reviews Dolly Varden Silver Corp.’s 6-month chart to tell you why he believe now would be the time to buy.

The fundamentals for Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX) are excellent, as set out by Mr Bob Moriarty of 321gold in a recent piece he wrote on it.

So we have been angling for a good point to add to positions or make fresh purchases but have been waiting for signs that the intermediate downtrend of recent weeks has run its course.

As is so often the case, when too many people are positive on a stock, it drops, and that is what happened with this, excellent fundamentals or not, but now it looks like the excess enthusiasm has been wrung out.

Dolly Varden was mentioned as looking attractive some days back in a wide-ranging Market Notebook article and the reason for this article devoted just to it is that it put in a strongly bullish reversal candle, called a “dragonfly doji” yesterday, which is a sign that the low for the reaction is in and that it should now start higher again.

We have what may prove to be an excellent entry point now, for after closing near to the day’s high yesterday after a wide range that tested support, it is order for it to back off some today which is what it has done.

On short-term charts, we can see greater upside volume kicking in in recent days, which is encouraging.

The conclusion is that this is an excellent point to add to positions in Dolly Varden or make fresh purchases.

Dolly Varden Silver’s website.

Dolly Varden Silver closed for trading at CA$0.90, $0.685 at 12.15 pm on March 16, 2023.

CliveMaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Disclosures
1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Dolly Varden Silver Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dolly Varden Silver Corp., a company mentioned in this article.

Financial News Metals

20 Mar

Trade Of The Week: Gold Prices Top $2000…What Next?

By ForexTime

The explosive price action gold has displayed in recent days mirrors a speeding train reaching maximum velocity, with fundamental forces fuelling the upside momentum.

On Monday, gold punched above $2000 for the first time since March 2022 as concerns over the health of the banking system sweetened the appetite for safe-haven assets. This positive start builds on last week’s whooping 6.5% surge as mounting fears around Credit Suisse AG and the overall health of the banking system sent jitters across the board. A palpable sense of unease continues to linger across financial markets despite news over the emergency weekend sale of Credit Suisse AG to UBS Group AG. Contagion fears are rife and this will most likely accelerate the flight to safety, boosting attraction towards safe-haven gold.

Revisiting our 2023, we thoroughly discussed how gold could be one of the biggest winners these years based on speculation around the Fed pausing rate hikes. While gold prices have surged on contagion fears, the string of negative developments has also tempered expectations around the Fed keeping rates higher for longer. With gold hitting the psychological $2000 level, the key question is whether further upside could be on the cards or the party ends around this resistance.

Taking a quick looking at the technical picture, gold is heavily bullish on the daily charts. However, the $2000 level may be a tough nut to crack for bulls. The last time gold secured a weekly close above $2000 was back in August 2020.

The lowdown….

Gold has experienced a sharp change of fortune this month thanks to the market chaos triggered by the Silicon Valley Bank (SVB) collapse and Credit Suisse drama.

The horrible combination of events and growing fears around the banking system sent tremors across financial markets, leaving investors on edge. The wave of risk aversion prompted investors to scatter from riskier assets and rush to safe-haven destinations. Gold prices have gained over 8% this month not only due to contagion fears but expectations around the Fed adopting a less aggressive approach on rates to preserve the financial system.

Concerns over contagion risks and financial stability are likely to influence market sentiment and risk appetite. Any more negative news or developments could spark another wave of risk aversion – ultimately injecting gold bulls with fresh inspiration.

Keep an eye on the Fed meeting

Markets expect the Federal Reserve to raise interest rates by 25 basis points this month. However, this will be a tough meeting for the central bank as it decides whether to focus on macroeconomic data or the stability of the financial system following the SVB collapse and the Credit Suisse drama. There has been a lot of chatter around the recent string of negative developments empowering doves with traders now predicting a 65% chance of a 25bp hike in March – according to Fed Funds Futures.

If the Federal Reserve surprises markets by leaving rates unchanged, this could signal the end of the rate hike cycle with the next move being lower rates. Such a development is likely to send the dollar tumbling along with Treasury yields, which could see gold shine with renewed intensity. Whatever the outcome of the Fed meeting, it may influence gold’s outlook for the remainder of March and possibly beyond.

Can gold conquer $2000?

After bagging its biggest weekly gain since March 2020, gold bulls are clearly in a position of power. The precious metal is drawing strength from multiple sources, ranging from contagion fears, falling Fed hike bets, a softer dollar, and falling Treasury yields. The path of least resistance for the precious metal certainly points north, but can bulls conquer the $2000 level?

From a technical perspective, there have been consistently higher highs and higher lows while prices are trading above the 50, 100, and 200-day SMA. Given how $2000 has proved to be strong resistance in the past, bulls may need to put in the work to secure a solid weekly close above this point. Should $2000 prove to be too much for bulls to handle, prices may sink back toward $1955 before retesting $2000. A solid break above this psychological level may inspire a move higher toward $2070 and levels not seen since August 2020 above $2075.

If bears make a return and drag prices below $1955, the next point of interest can be found at $1935, $1915, and $1900, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

11 Mar

COT Metals Charts: February 21st data showed Speculator bets led by Copper & Gold

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday February 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

*** This data is still a few weeks behind the current data because the CFTC up-to-date data has been delayed due to a cybersecurity event that happened in early February to ION Cleared Derivatives (a subsidiary of ION Markets). This hack of ION has created a problem for the large trader positions to be reported and reconciled. The CFTC has back-filled some data over the past few weeks and will get the data back up to date in the coming weeks.

Weekly Speculator Changes led by Copper & Gold

The COT metals markets speculator bets were lower through February 21st as two out of the five precious metals markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the metals was Copper (7,560 contracts) with Gold (1,572 contracts) also seeing a positive week.

The markets with declines in speculator bets for the week were Platinum (-3,093 contracts), Silver (-1,604 contracts) and Palladium (-199 contracts) with also having lower bets through February 21st.

Data Snapshot of Commodity Market Traders | Columns Legend

Feb-21-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	422,648	0	107,101	21	-129,355	77	22,254	36
Silver	123,906	3	9,902	32	-23,050	66	13,148	39
Copper	219,205	58	2,049	35	-8,510	62	6,461	63
Palladium	11,943	84	-5,188	0	5,552	100	-364	20
Platinum	67,499	58	2,905	22	-8,394	76	5,489	42

Strength Scores led by Copper & Silver

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Copper (35 percent) led the metals markets through February 21st. Silver (32 percent) came in as the next highest in the weekly strength scores.

On the downside, Palladium (0 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Gold (21 percent).

Strength Statistics:
Gold (20.6 percent) vs Gold previous week (20.0 percent)
Silver (32.4 percent) vs Silver previous week (34.7 percent)
Copper (34.5 percent) vs Copper previous week (28.2 percent)
Platinum (22.3 percent) vs Platinum previous week (29.4 percent)
Palladium (0.0 percent) vs Palladium previous week (2.2 percent)

Copper & Gold top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (-7 percent) led the past six weeks trends for metals through February 21st as all metals were in negative trend territory.

Platinum (-64 percent) led the downside trend scores with Palladium (-30 percent) as the next market with lower trend scores.

Move Statistics:
Gold (-16.2 percent) vs Gold previous week (-13.5 percent)
Silver (-27.3 percent) vs Silver previous week (-27.7 percent)
Copper (-6.9 percent) vs Copper previous week (-0.7 percent)
Platinum (-64.2 percent) vs Platinum previous week (-56.6 percent)
Palladium (-30.2 percent) vs Palladium previous week (-27.4 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing that week equaled a net position of 107,101 contracts in the data reported through Tuesday February 21st. This was a weekly rise of 1,572 contracts from the previous week which had a total of 105,529 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.6 percent. The commercials are Bullish with a score of 76.7 percent and the small traders (not shown in chart) are Bearish with a score of 35.7 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	49.7	28.2	10.4
– Percent of Open Interest Shorts:	24.4	58.8	5.1
– Net Position:	107,101	-129,355	22,254
– Gross Longs:	210,185	119,040	43,956
– Gross Shorts:	103,084	248,395	21,702
– Long to Short Ratio:	2.0 to 1	0.5 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	20.6	76.7	35.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.2	14.9	0.8

Silver Comex Futures:

The Silver Comex Futures large speculator standing equaled a net position of 9,902 contracts in the data reported through Tuesday February 21st. This was a weekly reduction of -1,604 contracts from the previous week which had a total of 11,506 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.4 percent. The commercials are Bullish with a score of 66.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.4 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.3	36.6	19.9
– Percent of Open Interest Shorts:	28.3	55.2	9.3
– Net Position:	9,902	-23,050	13,148
– Gross Longs:	44,985	45,388	24,663
– Gross Shorts:	35,083	68,438	11,515
– Long to Short Ratio:	1.3 to 1	0.7 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.4	66.0	39.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-27.3	24.1	-4.3

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing equaled a net position of 2,049 contracts in the data reported through Tuesday February 21st. This was a weekly boost of 7,560 contracts from the previous week which had a total of -5,511 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 61.6 percent and the small traders (not shown in chart) are Bullish with a score of 62.6 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.5	42.9	9.4
– Percent of Open Interest Shorts:	32.5	46.8	6.4
– Net Position:	2,049	-8,510	6,461
– Gross Longs:	73,395	94,047	20,560
– Gross Shorts:	71,346	102,557	14,099
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.5	61.6	62.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.9	6.1	2.5

Platinum Futures:

The Platinum Futures large speculator standing equaled a net position of 2,905 contracts in the data reported through Tuesday February 21st. This was a weekly decrease of -3,093 contracts from the previous week which had a total of 5,998 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.3 percent. The commercials are Bullish with a score of 76.1 percent and the small traders (not shown in chart) are Bearish with a score of 41.6 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.6	38.0	12.8
– Percent of Open Interest Shorts:	37.3	50.4	4.7
– Net Position:	2,905	-8,394	5,489
– Gross Longs:	28,058	25,638	8,655
– Gross Shorts:	25,153	34,032	3,166
– Long to Short Ratio:	1.1 to 1	0.8 to 1	2.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.3	76.1	41.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-64.2	53.7	24.5

Palladium Futures:

The Palladium Futures large speculator standing equaled a net position of -5,188 contracts in the data reported through Tuesday February 21st. This was a weekly decrease of -199 contracts from the previous week which had a total of -4,989 net contracts.

The week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.8 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.0	68.3	11.5
– Percent of Open Interest Shorts:	59.5	21.8	14.5
– Net Position:	-5,188	5,552	-364
– Gross Longs:	1,913	8,159	1,372
– Gross Shorts:	7,101	2,607	1,736
– Long to Short Ratio:	0.3 to 1	3.1 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	19.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-30.2	32.2	-31.1

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Metals Opinions

06 Mar

Trade Of The Week: Are Gold Bulls Back In Town?

By ForexTime

After securing its best week since mid-January, could gold prices be gearing up for more upside?

The precious metal staged a solid rebound last week, climbing 2.5% due to dollar weakness and positive economic data from China. A pullback in Treasury yields last Friday fuelled upside gains, pushing prices closer to the 50-day Simple Moving Average around $1870. Price action suggests that bulls could be back in action after gold received a thorough beating last month. However, the key question is whether the current momentum will result in a bullish reversal or a dead cat bounce.

Revisiting our 2023 outlook, we discussed how gold could be one of the biggest winners this year based on expectations around the Federal Reserve pausing rate hikes down the line. In February, these expectations were tempered by robust jobs data and sticky inflation figures which fuelled fears about rates staying higher for longer. Nevertheless, sentiment towards gold may experience a positive shift this month if US economic data disappoints and inflation shows signs of cooling.

Taking a quick looking at the technical picture, gold turned bullish on the daily charts after breaking above the $1845 lower high. A strong daily close above the 50-day SMA could encourage an incline towards $1880 and $1900, respectively.

Big week for gold as Powell & NFP eyed

Watch this space as the events this week could either fuel gold’s upside momentum or end the party for bulls. All eyes will be on Fed Chair Jerome Powell’s Testimony and US jobs data which have the potential to inject the precious metal with explosive levels of volatility.

On Tuesday, Fed Chair Powell provides his semi-annual report to the Senate Banking Committee. Any hints or signals on the Fed potentially straying away from 25bp hikes in future meetings will most likely influence markets. Powell will address the House Financial Services Committee on Wednesday and is expected to reiterate a similar message. If Powell strikes a hawkish tone during Testimony, this could rekindle dollar strength and rate hike bets – ultimately dragging gold prices lower. Alternatively, a cautiously sounding Powell may cool rate hike bets, providing even more room for gold bulls to fight back.

It’s all about the US jobs report on Friday which could determine whether the dollar’s renewed strength is temporary or lasting. After the breathtaking 517,000 reading back in January, around 215,000 is projected for February. Another healthy jobs report may reinforce expectations around the Federal Reserve holding rates higher for longer. On the other hand, if the NFP report fails to meet expectations – the dollar is likely to tumble as investors pare back their rate hike bets.

Other factors influencing gold

It will be wise to keep an eye on the ADP’s monthly read and initial jobless claims which could act as an appetiser before the main course. On the geopolitical front, developments concerning Sino-US relations may add more spice and flavour to the precious metal – especially if investors become edgy. While escalating tensions could fuel risk aversion sweetening appetite for safe-haven assets, this also includes the dollar. As we have identified earlier, dollar strength tends to make things difficult for gold bulls.

Gold to see rebound or dead cat bounce?

Gold turned bullish on the daily charts after prices blasted above $1845 lower high. The precious metal trades above the 100-day and 200-day Simple Moving Average with bulls eyeing the 50-day SMA at $1870. A strong breakout and daily close above this level could encourage an incline toward $1880 and potentially beyond the psychological $1900 resistance level. On the other hand, if bulls are capped below the 50-day SMA or lose momentum around $1880 – this could trigger a move lower with $1825 and $1800 acting as key levels of interest. Ultimately, the pending key US economic reports and Powell’s testimony will most likely shape the outlook for gold this month.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

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