Metals

Archive for Metals – Page 14

Uranium Prices, Demand Continue Rising in Tight Market

Source: Streetwise Reports (10/11/23)

Uranium prices and demand are forecast to keep rising through late 2023 amid tight supply, increasing the appeal of uranium stocks, say analysts.

Uranium prices and demand should continue their upward trajectory through the remainder of 2023, according to a recent industry report. Analysts attribute the positive momentum to sustained uranium supply deficits. With inventory levels low and global nuclear capacity expanding, the structurally undersupplied market continues tightening.

In the report, analysts increased their uranium demand estimates through 2030 and 2035. Total nuclear capacity is projected to grow at a 3.6% compound annual rate through 2030. This translates into a 30% rise in annual uranium requirements. New reactor construction in China and India, coupled with plant life extensions in the West, drive the demand growth.

While primary mine output increases, risks remain regarding achieving targeted production rates. Ongoing supply chain constraints and labor shortages could hinder bringing new capacity online. Even current mine supply faces challenges like coup d’etats, restart delays, and reduced guidance. Analysts emphasize that permitting, technical, and financing risks persist for essential greenfield projects.

With demand climbing and supply challenged, the uranium market will likely stay in a significant deficit for years. Spot prices have already hit 12-year highs of around US$70 per pound. Analysts boosted their long-term outlook to US$75, reflecting inflationary impacts on production costs. They expect an effective Western premium price of US$80 for most miners.

In fact, earlier this month, Katusa Research released a report on uranium, saying, “Today, more nuclear reactors are being built than any year since 1992. All of that has increased demand for uranium, but it’s also accidentally created something much bigger: a source of demand That NEVER EXISTED Before . . . It’s one that’s going to completely change how the uranium market works. The prospect of unquenchable global thirst for uranium has invited speculators into the uranium market.”

These dynamics prompted analysts in the above report to recommend adding leverage by increasing positions in uranium developers and miners.

Important Disclosures:

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. 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.

For additional disclosures, please click here.

Financial News Metals

11 Oct

Why Canada Must Develop Vital Mineral Production

Source: Bob Moriarty (10/10/23)

Bob Moriarty of 321Gold shares that as conflict rises globally, Canada must develop its rare earth element resources like Defense Metals’ Wicheeda project to secure critical mineral supply chains.

This past weekend’s events in Palestine highlight the rapid evolution of modern warfare. Videos on October 7 showed a US$500 drone controlled by a cell phone dropping a US$50 mortar on a US$10 million tank. This underscores how spending on expensive hardware is pointless when cheap drones are readily available. Tanks are now what outdated battleships were to Pearl Harbor. The real value lies in the technology behind cell phones and drones.

With rising global conflict, securing critical mineral supply chains matters more than concerns over price. By outsourcing most mining and production, the U.S. and Canada made a strategic mistake. China now controls the global market for rare earth elements, vital for electric vehicles, electronics, and defense systems.

I’ve spoken about Defense Metals Corp.’s (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) Wicheeda rare earth project in British Columbia. Located near infrastructure, Defense recently increased the project’s resource by 31% to 45 million tonnes of rare earth oxides. Last week, they began advanced geotechnical drilling for an upcoming pre-feasibility study.

Defense plans to produce 20-25 million tonnes of rare earth oxides — potentially 10% of global output. With no current rare earth production in North America, projects like Wicheeda are critical for economic security. Despite discussing assistance for juniors advancing these deposits, the U.S. and Canada must move swiftly from talk to action.

Defense Metals is an advertiser, and I own shares, making me admittedly biased. However, their corporate presentation is excellent reading for any investors interested in the vital rare earths sector. Due diligence is always essential. The global rare earth supply chain is a coming battleground, and Canada must develop projects like Wicheeda to secure its economic future.

The conflict in Ukraine underscores how vital it is to control supply chains for key technological minerals. China currently dominates rare earth production at nearly 90% of global output. By failing to develop its own domestic rare earth projects, Canada leaves itself vulnerable to supply disruptions during times of conflict.

Companies like Defense Metals offer a path to Canadian rare earth production and independence. Its Wicheeda project has major resource expansion potential and advanced infrastructure. With pre-feasibility studies underway, Wicheeda could be operational within a few years to secure domestic rare earth supply.

Projects like Wicheeda are thus strategic national assets that Canada must leverage. The world is entering an era of resource nationalism surrounding minerals like rare earths. By exercising foresight and enabling domestic production, Canada can guarantee its own technological security and prosperity.

The stakes are clear — as geopolitical tensions rise, rare earths and lithium will be 21st-century economic weapons. Vision is required to invest decisively in vital mineral supply chains. The window of opportunity is closing fast. Canada must act now to develop its resource base and avoid potential supply shocks or conflicts.

Overall, the coming rare earth war makes projects like Wicheeda national security priorities. Canada’s economic future depends on establishing domestic rare earth production. The time for talk is over — concrete action is required to guarantee mineral security and technological leadership. Companies like Defense Metals offer a clear pathway forward if Canada has the courage to seize it.

Important Disclosures:

Defense Metals Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Defense Metals Corp.
Bob Moriarty: I, or members of my immediate household or family, own securities of: Defense Metals Corp. My company has a financial relationship with: Defense Metals Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
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.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. 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.

For additional disclosures, please click here.

Financial News Metals

11 Oct

Lithium Co. Sees Heavy Volume as Big Three Automaker Deal Closes

Source: Streetwise Reports (10/9/23)

The markets were buzzing after the deal between this lithium explorer and big-three automaker Stellantis closed. Find out which newsletter is now recommending this stock.

The US$90 million investment deal in lithium explorer Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE) by big-three automaker Stellantis (formerly Chrysler) has closed.

Upon the announcement of the closing Thursday, LIT was the top trader on the Toronto Venture Exchange Thursday and into Friday morning, when 1.8 million of its shares traded by 10 a.m. ET.

The company’s stock rose 165% from CA$0.23 last week to CA$0.61 Friday morning.

The investment by the auto industry heavyweight in South America’s Lithium Triangle looking for the battery metal vital to the new green economy prompted one watcher, Chris Temple, editor of The National Investor newsletter, to call his readers to action.

“But to be sure: There will be growing production in the years ahead from this region,” Chris Temple of The National Investor wrote.

“This factor is what prompts me to go from watching to recommending with Argentina Lithium & Energy, given the news just out the last few days that car maker Stellantis (today’s owner of the Chrysler and Jeep brands, along with several others) has decided to put US$90 million into LIT’s wholly owned local subsidiary companies exploring these projects,” Temple wrote.

The Stellantis umbrella includes iconic brands like Chrysler, Alfa Romeo, Citroen, Dodge, Fiat, Jeep, Maserati, and Peugeot. Under the agreement, Peugeot Citroen Argentina SA, a Stellantis subsidiary, owns 19.9% of the company’s issued and outstanding shares, and Argentina Lithium will own 80.1%.

Temple also noted that mines bought or consolidated by larger companies will play a part in making the Lithium Triangle economical for investors.

“But to be sure: There will be growing production in the years ahead from this region,” Temple wrote. “And it will be fostered, in part, by O.E.M.’s (original equipment manufacturers) and others placing their much bigger bets today.”

Fundamental Research Corp. analyst Sid Rajeev, while initiating coverage on the company in July, agreed.

Fundamental Research Corp. analyst Sid Rajeev, while initiating coverage on the company in July, agreed.

“As LIT’s projects are close to well-known projects held by majors, the company can be subject to M&A events if it is able to delineate a resource in one or more of its assets,” noted Rajeev, who rated the stock a Buy with a fair value target price of CA$0.52.

Argentina Lithium has acquired resource properties across the Americas, with a considerable focus on Argentina and the Lithium Triangle. Its current projects include

Argentina Lithium’s projects are all within the Lithium Triangle in the Argentinian provinces of Salta and Catamarca. They include Rincon West, Antofalla North, Pocitos, and Incahuasi. All are “salar” properties were the company hopes to produce lithium carbonate from brines enriched in lithium. They are currently at the exploration stage.

The Catalyst: A ‘Fast and Furious’ Transition

Stellantis’ investment highlights the approaching shortage of lithium, a metal it will need for electric vehicle (EV) batteries.

The EV transition is “is coming fast and furious,” Argentina Lithium President and Chief Executive Officer Nikolaos Cacos said.

Stellantis’ investment “allows us to not think about funding anymore as an exploration company,” Cacos said. “I think we can advance all our projects over the next three years, right up to the announcement, define resources and pre-feasibility studies just before . . . (and) announcing making a decision or going forward and commercial production.”

Analysts from Eight Capital predicted that lithium market deficits will widen this decade, and the shortfalls will be driven by demand in North America.

After the issuance of exchange shares and at the close of the transaction, on or about October 4, Stellantis will own at most 19.9% of the common shares (on an undiluted basis) of Argentina Lithium, the company said.

The exchange agreement also provides Stellantis with observer rights to attend Argentina Lithium’s board meetings for as long as Stellantis owns at least 10% of the company and allows it to nominate one director to the Board of Directors.

The companies will enter into a lithium offtake agreement in which Stellantis will buy up to 15,000 tonnes per year of lithium produced by LIT over a seven-year period. The agreement may be extended by the companies.

The supply obligation of the agreement is conditional on the start of commercial lithium production at one or more of Argentina Lithium’s projects, as well as other terms, including Stellantis having a first right of first refusal on the sale of lithium products to third parties after production starts.

Analysts: Market Deficits Will Widen

Lithium is a major component of EV batteries, where it is used as a cathode and electrolyte. A soft, silvery metal with highly reactive and flammable properties, lithium is also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

Analysts from Eight Capital predicted that lithium market deficits will widen this decade, and the shortfalls will be driven by demand in North America.

The United States’ EV penetration of 6% lags China’s 26% and Europe’s 20%, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a recent research note. But President Joe Biden’s administration has committed to a target of 50% of new vehicle sales being EVs by 2030.

“We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS),” Prihar and Riazanov wrote.

Streetwise Ownership Overview*

Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE)

	Retail: 63%
	Strategic Investors: 37%

63%

37%

^*Share Structure as of 9/29/2023

“Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it’s still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust.”

Ownership and Share Structure

The company doesn’t officially share any information regarding management or institutional ownership, but Reuters reported that about 37% was owned by strategic institutions in the most recent reporting.

Its largest shareholders are Lithium Investment Partners LP with 17.68%, Jack Yetiv with 15.24%, Joseph J. Grosso with 3.05%, and the CEO Cacos with 1.04%, according to Reuters.

Its market cap is CA$77.39 million, with 130 million shares outstanding. It trades in a 52-week range of CA$0.60 and CA$0.19.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Argentina Lithium & Energy Corp.
Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. 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.

For additional disclosures, please click here.

Financial News Metals

11 Oct

Gold Stocks vs. AU$ Gold Ready To Break 16 Year Downtrend

Source: Barry Dawes (10/9/23)

Barry Dawes of Martin Place Securities shares a quick update on the current state of gold.

Gold higher

Gold Index higher

Gold stocks vs AU$ Gold ready to break 16 year downtrend

ASX Gold Stocks

Technically magnificent!

Backtest on downtrend line

Flag formation set

Huge volume
Probable Right Hand Shoulder

Lots of green today.

And more to come throughout the week.

About to break much higher vs. AU$gold

16-year downtrend — about to be broken.

Head the markets.

Important Disclosures:

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.
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.

For additional disclosures, please click here.

Financial News Metals

10 Oct

Gold: Mind the gap…

By ForexTime

Gold gaps higher on geopolitical tension
Market caution may keep metal buoyed
Watch out for US CPI report on Thursday
Failure to close gap may see prices test 21-EMA
Keep eye on $1885 level

Friday’s post-NFP price action saw gold bounce off levels not seen since March 2023 at $1810, to post its first bullish candlestick since September 19th.

Escalating tensions in the Middle East over the weekend triggered risk aversion, sending investors rushing toward safe-haven assets with gold prices gapping over $20 at market open.

The failure to close the gap following yesterday, October 9th’s price action could present an opportunity for both bulls and bears.

At the time of writing, XAUUSD D1 is below its open for the day at $1861.15 and looks to be in a decline to close the gap at $1831.50.

Geopolitical tensions may continue supporting gold prices and this has been evident over the past 48 hours since the escalations in the Middle East began. However, the US CPI report on Thursday 12th could heavily influence gold’s near-term outlook than the ongoing crisis would.

A higher CPI is likely to bolster Fed hike expectations and the USD, weakening gold as a result. A weaker CPI may cool Fed hike bets and weaken the dollar, providing room for gold prices to push higher.

A failure to close the gap today may see the shiny metal rally into its 21-day EMA at $1873.00 with $1885 as the next near-term resistance.
Applying the Fibonacci retracement tool on the daily timeframe, from September 20th’s high at $1947.37 to October 6th’s low at $1810.40 we see the 38.2 retracement level at $1862.82 acting as the current resistance zone.

Bulls and bears alike could use markets close above or below this level as a pointer to the next direction for XAUUSD.

Article by ForexTime

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

Financial News Metals

08 Oct

COT Metals Charts: Speculator Bets led by Copper & Steel

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 October 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Copper & Steel

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

Leading the gains for the metals was Copper (6,867 contracts) with Steel (732 contracts) and Palladium (584 contracts) also showing positive weeks.

The markets with declines in speculator bets for the week were Gold (-24,589 contracts) with Silver (-4,761 contracts) and Platinum (-4,710 contracts) also having lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Oct-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	431,226	4	91,226	17	-111,982	81	20,756	32
Silver	125,847	14	15,344	40	-30,358	57	15,014	50
Copper	208,795	49	-21,912	12	19,952	88	1,960	31
Palladium	18,421	86	-9,718	9	9,861	93	-143	33
Platinum	81,529	85	2,616	22	-7,514	78	4,898	34

Strength Scores led by Steel & 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 Steel (65 percent) and Silver (40 percent) lead the metals markets this week.

On the downside, Palladium (9 percent), Copper (12 percent) and Gold (17 percent) come in at the lowest strength levels currently and are all in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (17.2 percent) vs Gold previous week (28.0 percent)
Silver (40.1 percent) vs Silver previous week (46.9 percent)
Copper (11.9 percent) vs Copper previous week (6.0 percent)
Platinum (21.6 percent) vs Platinum previous week (32.5 percent)
Palladium (8.8 percent) vs Palladium previous week (4.9 percent)
Steel (65.4 percent) vs Palladium previous week (62.9 percent)

Silver & Platinum top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Silver (4 percent) and Platinum (4 percent) lead the past six weeks trends for metals.

Steel (-6 percent), Gold (-5 percent) and Palladium (-2 percent) lead the downside trend scores currently.

Move Statistics:
Gold (-4.7 percent) vs Gold previous week (-2.3 percent)
Silver (3.5 percent) vs Silver previous week (17.5 percent)
Copper (2.3 percent) vs Copper previous week (-2.7 percent)
Platinum (4.1 percent) vs Platinum previous week (16.9 percent)
Palladium (-2.4 percent) vs Palladium previous week (-6.0 percent)
Steel (-5.8 percent) vs Steel previous week (-8.9 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week came in at a net position of 91,226 contracts in the data reported through Tuesday. This was a weekly reduction of -24,589 contracts from the previous week which had a total of 115,815 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 17.2 percent. The commercials are Bullish-Extreme with a score of 80.7 percent and the small traders (not shown in chart) are Bearish with a score of 32.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.0	25.7	10.5
– Percent of Open Interest Shorts:	31.8	51.6	5.7
– Net Position:	91,226	-111,982	20,756
– Gross Longs:	228,406	110,666	45,256
– Gross Shorts:	137,180	222,648	24,500
– Long to Short Ratio:	1.7 to 1	0.5 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	17.2	80.7	32.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.7	3.5	4.2

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week came in at a net position of 15,344 contracts in the data reported through Tuesday. This was a weekly decrease of -4,761 contracts from the previous week which had a total of 20,105 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 40.1 percent. The commercials are Bullish with a score of 57.1 percent and the small traders (not shown in chart) are Bearish with a score of 49.9 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.8	30.0	22.6
– Percent of Open Interest Shorts:	28.7	54.1	10.6
– Net Position:	15,344	-30,358	15,014
– Gross Longs:	51,405	37,769	28,386
– Gross Shorts:	36,061	68,127	13,372
– Long to Short Ratio:	1.4 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.1	57.1	49.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.5	-7.9	22.9

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week came in at a net position of -21,912 contracts in the data reported through Tuesday. This was a weekly lift of 6,867 contracts from the previous week which had a total of -28,779 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 11.9 percent. The commercials are Bullish-Extreme with a score of 88.2 percent and the small traders (not shown in chart) are Bearish with a score of 30.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.2	41.1	7.6
– Percent of Open Interest Shorts:	43.7	31.5	6.7
– Net Position:	-21,912	19,952	1,960
– Gross Longs:	69,273	85,785	15,950
– Gross Shorts:	91,185	65,833	13,990
– Long to Short Ratio:	0.8 to 1	1.3 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	11.9	88.2	30.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.3	-2.1	-1.0

Platinum Futures:

The Platinum Futures large speculator standing this week came in at a net position of 2,616 contracts in the data reported through Tuesday. This was a weekly lowering of -4,710 contracts from the previous week which had a total of 7,326 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 21.6 percent. The commercials are Bullish with a score of 77.9 percent and the small traders (not shown in chart) are Bearish with a score of 33.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.8	27.5	10.8
– Percent of Open Interest Shorts:	52.6	36.8	4.8
– Net Position:	2,616	-7,514	4,898
– Gross Longs:	45,496	22,452	8,772
– Gross Shorts:	42,880	29,966	3,874
– Long to Short Ratio:	1.1 to 1	0.7 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.6	77.9	33.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.1	-2.5	-7.7

Palladium Futures:

The Palladium Futures large speculator standing this week came in at a net position of -9,718 contracts in the data reported through Tuesday. This was a weekly increase of 584 contracts from the previous week which had a total of -10,302 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 8.8 percent. The commercials are Bullish-Extreme with a score of 93.3 percent and the small traders (not shown in chart) are Bearish with a score of 33.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.8	59.9	8.6
– Percent of Open Interest Shorts:	74.5	6.4	9.4
– Net Position:	-9,718	9,861	-143
– Gross Longs:	4,007	11,038	1,588
– Gross Shorts:	13,725	1,177	1,731
– Long to Short Ratio:	0.3 to 1	9.4 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	8.8	93.3	33.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.4	1.1	11.5

Steel Futures Futures:

The Steel Futures large speculator standing this week came in at a net position of -5,487 contracts in the data reported through Tuesday. This was a weekly increase of 732 contracts from the previous week which had a total of -6,219 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 Bullish with a score of 65.4 percent. The commercials are Bearish with a score of 35.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.2	85.9	1.1
– Percent of Open Interest Shorts:	37.0	56.4	1.7
– Net Position:	-5,487	5,606	-119
– Gross Longs:	1,560	16,354	214
– Gross Shorts:	7,047	10,748	333
– Long to Short Ratio:	0.2 to 1	1.5 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.4	35.4	19.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.8	5.7	3.2

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 Financial News Metals

04 Oct

Gold Has Fallen but Stocks Are Cheap

Source: Adrian Day (10/4/23)

Global Analyst Adrian Day looks at why gold has fallen and suggests it may have further to go. Meanwhile, he takes a look at some gold stocks, which are currently very inexpensive.

The sharp drop in the gold price last week dragged the stocks down even further to where many are compelling value (as indicated by the length of the “best buys” list below). In last week’s Bulletin, I wrote that the widening gap between bullion and gold stocks could be closed by gold declining. “I would argue that in a global environment which has seen interest rates shoot up rapidly with continuing tightening in the outlook as well as a deteriorating economic environment, gold ‘should’ be lower.”

I hope I didn’t jinx it and provoke the one-week, $78 drop! The market finally seems to have given some credence to Jerome Powell and the Federal Reserve.

At the last meeting, though there was no rate hike, Powell reiterated his hawkish stance, while the Fed members (in the so-called “dot-plot”) are still projecting another rate hike this year, and they increased their estimates for rates next year.

This seems to have got the market’s attention, as the Fed Funds Futures are now more weighted to a hike this year. More importantly, perhaps, market rates have moved up, along with a stronger dollar.

Bond Yields Must Go Higher

Market rates are likely to move up further. The Treasury is still playing catch up in bond issuance after the debt ceiling agreement in June, with perhaps as much as half-a-trillion additional bonds to be issued this year. That will withdraw liquidity from the economy, hurting gold. This comes as traditional key buyers, including the Federal Reserve itself, and China, Japan, and Russia are not buying, requiring higher rates to attract new buyers. In addition, almost one-third oof all Treasuries outstanding will mature over the next 12 months, requiring the Treasury to issue new bonds at today’s higher rates.

The report Friday that Saudi Arabia was seeking a stronger military agreement with the U.S. led to suggestions that this could mean more cooperation on the oil price and, potentially, a stalling of the advance to de-dollarization of global trade. Both of these would be gold-negative.

If the Fed blinks even as the inflation numbers are moving back up, that would be very positive for gold.

There are certainly factors that could see gold even lower before the end of the year. Another Fed rate hike would likely hurt gold, despite the Fed Funds Futures. On the other hand, the Fed is unlikely to hike during a government shutdown, while the automobile strike might suggest caution. And, of course, if inflation numbers move down again, that would provide a reason to pause

What we can say, however, is that we are getting very close to the point where conditions will favor gold. The U.S. economy is moving towards a recession, while the recent jump in the oil price will flow through to most goods in the stores, boosting the CPI numbers in the months ahead. That combination — stagflation — is positive for gold.

A slowing economy ahead of the election, even as payments on the Federal debt rise sharply, will also suggest the end of hiking. If the Fed blinks even as the inflation numbers are moving back up, that would be very positive for gold.

Stocks Very Low Amid Weak Sentiment

Meanwhile, investor sentiment is extremely negative; gold ETFs continue to see larger outflows. From a contrarian point of view, that suggests that the eventual rally will be all the more strong. Retail interest is higher, as evidenced by Costco now selling one-ounce gold bars, which the company says typically sell out “within a few hours.”

The gold stocks remain very undervalued. We could look at many indicators of value. For one, the GDXJ fund is four standard deviations below the level implied by a 10-year regression model, a measure of price rather than value to be sure of a very unusual occurrence.

The seniors are at multi-decade low valuations as well. Of course, the stocks will fall further if the gold price does, but we are close, in terms of price and time, to the lows, and today’s prices will look very low a year or two from now.

More Trouble in Panama for Franco

Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) sees more uncertainty over its largest asset, the stream on First Quantum’s Cobre Panama mine, less than a year after the mine was temporarily shut down amid rancorous renegotiations of its agreement with the government. That agreement was in the news again when the National Assembly suspended debate on its ratification amid demonstrations by a workers union protesting against the proposed agreement.

However, this may be a tempest in a teapot: the union does not represent any mine workers, while the Assembly’s objections to the new agreement do not appear to concern any central financial issues.

A resolution in the near term is likely. Meanwhile, the mine continues to operate.

We do not expect this new dispute to have a meaningful impact on Franco’s share price, which is at a good buying price in any event.

Nestlé Sells Troubled Asset, Buys Another

Nestle SA (NESN:VX; NSRGY:OTC) has sold Palforzia, its troubled peanut-allergy treatment, to a Swiss biopharmaceutical company specializing in the treatment of allergies. The price was not disclosed, though it is widely thought that Nestlé lost a significant amount of the $2.6 billion it paid to acquire the business in 2020 amid hopes of a blockbuster therapy.

Demand from both patients and doctors was disappointing. Earlier this year, Nestlé took a $2.1 billion impairment on the medication. Mitigating the loss, Nestlé will receive milestone payments and ongoing royalties. In other news, Nestlé has acquired the majority stake in Grupo CRM, a premium chocolate company in Brazil, which operates more than 1,000 chocolate boutiques, including under the Kopenhagen name, ubiquitous at the country’s large airports and malls.

As with the Palforzia sale, this transaction was with a private company, and financial terms were not disclosed. Separately, Nestlé ranked first in coffee sustainability in the new Coffee Brew Index, with the report recognizing the company’s comprehensive coffee sustainability strategy, which includes help in modern techniques for coffee growers.

Despite its large portfolio of businesses, Nestlé has shown itself to be flexible while achieving consistent returns. With a solid balance sheet and forward yield of almost 3%, it’s a long-term Buy.

BEST BUYS THIS WEEK include, in addition to above, Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE), Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE), Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ), Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE), Lara Exploration Ltd. (LRA:TSX.V), Orogen Royalties Inc. (OGN:TSX.V), Midland Exploration Inc. (MD:TSX.V), and Nova Royalty Corp. (NOVR:TSX.V).

UPCOMING APPEARANCES November 1st to 4th is the annual New Orleans Investment Conference. Always educational, challenging, and fun, it is a must-event on my annual calendar. Speakers, too many to list, include Peter Boockvar, a walking almanac of all things economic; Robert Prechter, George Gammon, and the alwayscontroversial Prof. Dave Collum.

One recent addition to the line-up is Russian-born, U.K.-based satirist Konstantin Kisin, whose speech on cancel culture at the Oxford Union went viral. I am honored to say that I’ll be interviewing him. Details can be found here.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Franco-Nevada Corp., Agnico Eagle Mines Ltd., Barrick Gold Corp., Pan American Silver Corp., Fortuna Silver Mines Inc., Lara Exploration Ltd., Orogen Royalties Inc., Midland Exploration Inc., and Nova Royalty Corp.
Adrian Day: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with: All. I determined which companies would be included in this article based on my research and understanding of the sector.
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.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. 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.

For additional disclosures, please click here.

Adrian Day Disclosures

Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2023. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

Metals Opinions

30 Sep

COT Metals Charts: Speculator Bets led lower by Gold & Copper

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 September 26th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Silver & Palladium

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

Leading the gains for the metals was Silver with a gain of 4,874 contracts.

The markets with declines in speculator bets for the week were Gold (-19,348 contracts), Copper (-12,479 contracts), Platinum (-2,668 contracts), Steel (-1,064 contracts) and Palladium (-72 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Sep-26-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	435,620	6	115,815	28	-134,836	72	19,021	28
Silver	126,206	15	20,105	47	-33,080	54	12,975	38
Copper	216,031	55	-28,779	6	27,192	94	1,587	28
Palladium	18,004	83	-10,302	5	10,458	97	-156	32
Platinum	72,957	61	7,326	32	-12,349	68	5,023	35

Strength Scores led by Steel & 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 Steel (60 percent) and Silver (47 percent) lead the metals markets this week.

On the downside, Copper (6 percent) and Palladium (5 percent) come in at the lowest strength level currently and are both in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (28.0 percent) vs Gold previous week (36.6 percent)
Silver (46.9 percent) vs Silver previous week (40.0 percent)
Copper (6.0 percent) vs Copper previous week (16.8 percent)
Platinum (32.5 percent) vs Platinum previous week (38.6 percent)
Palladium (4.9 percent) vs Palladium previous week (5.4 percent)
Steel (60.1 percent) vs Palladium previous week (63.5 percent)

Silver & Platinum top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Silver (18 percent) and Platinum (17 percent) lead the past six weeks trends for metals.

Steel (-9 percent), Palladium (-6 percent) and Copper (-3 percent) lead the downside trend scores currently.

Move Statistics:
Gold (-2.3 percent) vs Gold previous week (-3.4 percent)
Silver (17.5 percent) vs Silver previous week (2.7 percent)
Copper (-2.7 percent) vs Copper previous week (-5.4 percent)
Platinum (16.9 percent) vs Platinum previous week (16.2 percent)
Palladium (-6.0 percent) vs Palladium previous week (-0.3 percent)
Steel (-8.5 percent) vs Steel previous week (-6.4 percent)