Metals

Archive for Metals – Page 31

Copper Speculators raise their bets into first bullish position in 9 weeks

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 June 20th 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 Palladium & Gold

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

Leading the gains for the metals was Copper (14,794 contracts) with Gold (2,766 contracts), Palladium (501 contracts) and Steel (175 contracts) also showing positive weeks.

The markets with declines in speculator bets for the week were Silver (-3,678 contracts) and Platinum (-2,500 contracts) having lower bets on the week.

Copper Speculators raise their bets into first bullish position in 9 weeks

Highlighting the COT metals data this week is the gains for the Copper speculative positions. The large speculator position in Copper futures rose by +14,794 contracts this week following a gain by +13,050 contracts last week. The speculator position has now risen by over +37,590 contracts in total over the past three weeks.

This renewed positive sentiment has brought the net position standing back into a small bullish level after spending the past eight weeks in bearish territory.

Despite the bullish return of speculators, Copper prices closed out the week lower following three straight weeks of gains. The futures price touched a six-week high on Thursday at 3.967 before turning lower and finishing the week at 3.8035.

Data Snapshot of Commodity Market Traders | Columns Legend

Jun-20-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	438,037	7	162,975	49	-186,537	52	23,562	39
Silver	152,633	40	20,058	47	-36,210	50	16,152	56
Copper	204,399	46	1,888	32	-4,003	68	2,115	32
Palladium	12,304	87	-6,635	5	7,214	96	-579	7
Platinum	69,436	70	19,472	61	-25,052	42	5,580	43

Strength Scores led by Steel & 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 Steel (68 percent) and Platinum (61 percent) lead the metals markets this week.

On the downside, Palladium (5 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (48.8 percent) vs Gold previous week (47.6 percent)
Silver (46.9 percent) vs Silver previous week (52.1 percent)
Copper (32.5 percent) vs Copper previous week (19.7 percent)
Platinum (60.5 percent) vs Platinum previous week (66.3 percent)
Palladium (4.6 percent) vs Palladium previous week (0.0 percent)
Steel (67.8 percent) vs Palladium previous week (67.3 percent)

Copper & Steel top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (23 percent) and Steel (6 percent) lead the past six weeks trends for metals.

Platinum (-20 percent), Silver (-18 percent) and Gold (-14 percent) lead the downside trend scores currently.

Move Statistics:
Gold (-14.5 percent) vs Gold previous week (-15.6 percent)
Silver (-17.6 percent) vs Silver previous week (-11.7 percent)
Copper (23.1 percent) vs Copper previous week (7.6 percent)
Platinum (-19.9 percent) vs Platinum previous week (-10.9 percent)
Palladium (-9.1 percent) vs Palladium previous week (-6.4 percent)
Steel (5.9 percent) vs Steel previous week (4.5 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week resulted in a net position of 162,975 contracts in the data reported through Tuesday. This was a weekly lift of 2,766 contracts from the previous week which had a total of 160,209 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 48.8 percent. The commercials are Bullish with a score of 51.9 percent and the small traders (not shown in chart) are Bearish with a score of 39.0 percent.

Price Trend-Following Model: Weak Uptrend

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

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.3	27.7	10.8
– Percent of Open Interest Shorts:	15.1	70.3	5.4
– Net Position:	162,975	-186,537	23,562
– Gross Longs:	229,308	121,419	47,402
– Gross Shorts:	66,333	307,956	23,840
– Long to Short Ratio:	3.5 to 1	0.4 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.8	51.9	39.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-14.5	13.9	-7.9

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week resulted in a net position of 20,058 contracts in the data reported through Tuesday. This was a weekly lowering of -3,678 contracts from the previous week which had a total of 23,736 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 50.0 percent and the small traders (not shown in chart) are Bullish with a score of 56.3 percent.

Price Trend-Following Model: Weak Uptrend

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

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	34.4	30.1	18.5
– Percent of Open Interest Shorts:	21.3	53.8	7.9
– Net Position:	20,058	-36,210	16,152
– Gross Longs:	52,547	45,941	28,208
– Gross Shorts:	32,489	82,151	12,056
– Long to Short Ratio:	1.6 to 1	0.6 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.9	50.0	56.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.6	12.1	13.0

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week resulted in a net position of 1,888 contracts in the data reported through Tuesday. This was a weekly rise of 14,794 contracts from the previous week which had a total of -12,906 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 32.5 percent. The commercials are Bullish with a score of 68.3 percent and the small traders (not shown in chart) are Bearish with a score of 31.8 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.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.7	42.4	8.2
– Percent of Open Interest Shorts:	30.7	44.4	7.2
– Net Position:	1,888	-4,003	2,115
– Gross Longs:	64,740	86,761	16,759
– Gross Shorts:	62,852	90,764	14,644
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.5	68.3	31.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	23.1	-19.7	-19.0

Platinum Futures:

The Platinum Futures large speculator standing this week resulted in a net position of 19,472 contracts in the data reported through Tuesday. This was a weekly reduction of -2,500 contracts from the previous week which had a total of 21,972 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 60.5 percent. The commercials are Bearish with a score of 41.7 percent and the small traders (not shown in chart) are Bearish with a score of 42.8 percent.

Price Trend-Following Model: Weak Uptrend

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

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	49.1	28.3	12.9
– Percent of Open Interest Shorts:	21.0	64.4	4.8
– Net Position:	19,472	-25,052	5,580
– Gross Longs:	34,059	19,682	8,936
– Gross Shorts:	14,587	44,734	3,356
– Long to Short Ratio:	2.3 to 1	0.4 to 1	2.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	60.5	41.7	42.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.9	15.4	15.7

Palladium Futures:

The Palladium Futures large speculator standing this week resulted in a net position of -6,635 contracts in the data reported through Tuesday. This was a weekly gain of 501 contracts from the previous week which had a total of -7,136 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 4.6 percent. The commercials are Bullish-Extreme with a score of 96.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 6.9 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.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.5	67.2	9.6
– Percent of Open Interest Shorts:	74.4	8.6	14.3
– Net Position:	-6,635	7,214	-579
– Gross Longs:	2,525	8,268	1,182
– Gross Shorts:	9,160	1,054	1,761
– Long to Short Ratio:	0.3 to 1	7.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.6	96.4	6.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.1	10.3	-15.7

Steel Futures Futures:

The Steel Futures large speculator standing this week resulted in a net position of -1,855 contracts in the data reported through Tuesday. This was a weekly advance of 175 contracts from the previous week which had a total of -2,030 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 67.8 percent. The commercials are Bearish with a score of 32.0 percent and the small traders (not shown in chart) are Bearish with a score of 38.9 percent.

Price Trend-Following Model: Weak Uptrend

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

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.8	78.0	1.0
– Percent of Open Interest Shorts:	21.5	71.8	0.4
– Net Position:	-1,855	1,710	145
– Gross Longs:	4,085	21,522	264
– Gross Shorts:	5,940	19,812	119
– Long to Short Ratio:	0.7 to 1	1.1 to 1	2.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	67.8	32.0	38.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.9	-6.4	22.1

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.

14 Jun

Golden Schizophrenia

Source: Michael Ballanger (6/12/23)

Michael Ballanger of GGM Advisory Inc. shares his opinion on the current state of the gold market as the U.S. federal debt rises.

Schizophrenia: “the abnormal interpretation of reality.”

If this was June of 2003, and I were to tell you that in the next twenty years, U.S. Federal debt would rise from US$6.19 billion to US$31.35 trillion, you would probably assume that gold would be somewhat higher.

If this were June 2003, and I were to tell you that the Federal Reserve Board would manufacture a balance sheet explosion from US$744 billion to US$8.4 trillion, you would be correct in assuming that the prices for gold and silver would be substantially higher than US$1,981 per ounce.

In June of 2003, the price of gold was around US$350/ounce, still approximately US$500/ounce below the 1980 peak but just beginning an uptrend that would take it to the current price of US$1,980/ounce, representing a 566% increase over the twenty year period of fiscal and monetary insanity.

However, the national debt has increased by 4,715% while the Fed balance sheet has increased by 1,144% within the same time period.

Now, nowhere in the cards is it written that the U.S. national debt should be positively correlated with the price of gold, nor can the same assumption be made for the Fed balance sheet.

In fact, outside of the 1970s, there has been no time in recent history that gold was positively correlated to the published rate of inflation, and no better example exists than the period of 2020 to 2023 when inflation rates rose 236% while at the same time, gold rose a paltry 29.6 % despite massive central bank accumulation.

If I told you in June of 2003 that within twenty years, there would be two banking crises, a global economic shutdown due to a viral outbreak, and an invasion of Ukraine by Russia, you would certainly put the price of gold at a minimum of tenfold its price at the time as US$3,500/ounce would still be ridiculously low relative to the price increases in food, medicine, real estate, and other notable items.

I propose that gold, were it a human, suffers from a severe case of schizophrenia where its pricing structure is an “abnormal interpretation of reality.”

In the case of gold, it separates itself from all other assets in that it cannot be stored electronically, and it has no other counterparty laying claim to it. Also, given its historic role as a store of value, a protector of sorts against monetary and fiscal shenanigans that serve to cheapen the value of our savings which in turn are the reward for our labor, how is it that prices for everything that humans consume can experience astronomical increases in price while the 5,000-year-old haven does not follow suit?

Gold bullion is the kryptonite of the central bank “Supermen” that use money to control the citizenry. As Mayer Anselm Rothschild said back in 1790, “Permit me to issue and control the money of a nation, and I care not who makes its laws.”

Perhaps this explains the perversity of gold’s inability to interpret reality “normally” as it languishes in mediocrity.

Gold at Critical Crossroads

Here in June of 2023, gold appears to be at critical crossroads. I have been a gold bull for most of the post-Millennium period, having fully expected the arrival of a debt crisis as the catalyst for a re-pricing of the only asset that serves as collateral currently for central banks the world over. It is collateral that remains pitifully underpriced relative to the mountains of debt, the bulk of which has been issued in the past fifteen years (since the 2008 GFC).

However, on a near-term basis, the U.S. dollar-denominated price of gold is a matter of National Security for those that recognize the downside risk to the end of dollar hegemony. With that in mind, one must factor in the interventions when one is trading gold so as the chart shown above would dictate, there have been two major runs at the old highs at US$2,089 in 2023, and both times they were soundly repelled.

It now looks as though it is a fruitless to attempt to “call” the breakout to new highs in gold. I am therefore standing aside until the forces of true price discovery are able to overcome the interventionalists and take it through and above US$2,100/ounce with certainty.

Not even the second and third largest bank failures in U.S. history — First Republic and Silicon Valley — were enough to vault gold to new highs, and this I find staggeringly bizarre.

Nevertheless, gold sits at US$1,981 basis August and needs to reclaim the mighty US$2,000/ounce level in order to repair the damage wrought by the recent bombing to US$1,939.

I fully expected that gold would see new highs in the first half of 2023, and thus far, I have once again been vanquished by legions of NY Fed desk traders, programmed algobots operating on platforms designed by the dollar protectors, and the always dependable bullion banks that continue to spoof their way to insane trading enrichment, setting aside a sinking fund of realized profits for future and totally anticipated fines from the Justice Department and the SEC.

From the trader’s perspective, it now looks as though it is a fruitless and completely maddening exercise to attempt to “call” the breakout to new highs in gold. I am therefore standing aside until the forces of true price discovery are able to overcome the interventionalists and take it through and above US$2,100/ounce with certainty. Until then, the chop-chop one hears is the sound of the bulls’ P&Ls being decimated by bullion bank artistry at which they are supremely adept.

AI

There have been only two times in my long life that I have attempted to short a technology bubble, and both times I had my head handed to me on a platter, but not before ample servings of crow were stuffed down my throat by snot-nosed kiddies “riding the wave.”

The first time was in late 1999 when I decided that America Online was overvalued; I got sledgehammered in the put options abattoir. The second time was in 2019 when I thought the idea of an electric car running on two-hour power intervals was ridiculously overrated, so I bought a whack load of Tesla puts as it was rising, only to watch it continue to rise right on up until Feb/2020 when the rumor of a pandemic coming out of China sent it reeling lower.

Alas, by then, the Tesla put options were sawdust resting on the floor of broken dreams as the Tesla-vites and their Millennial know-it-alls wagged their fingers disdainfully, trying their best to hold back shrieks of laughter at “that old guy that doesn’t get it.”

Vancouver promoters are once again mobilizing their marketing armies to “get the word out” that Foofoo Mining Corp. is now “FULLY ENGAGES IN ARTIFICIAL INTELLIGENCE” and is working on a deal with Microsoft t find lithium and cobalt on Mars.

Well, that “old guy that doesn’t get it” is ignoring the arrival of sexagenarian memory loss and is going to once again take a royal run at the short side of a market driven largely by ten stocks all leading an entire exchange of “wannabe’s” to incorporate “AI” into their business models.

In the past month, dozens of junior mining companies, many of which switched from silver to lithium in 2022, have now told the world that they are using AI to find lithium AND silver, and furthermore, they are using it to provide life insurance for dachshunds in case they need hip replacements in their later years.

The predictability of this migration to AI is reminiscent of the one that took place in 2018 when all the junior mining explorco’s sitting at five cents with twenty bucks in working capital ( but a really “cool” website) all made the switch to “crypto” in order to catch the wave of Millennial Madness sweeping across the international trading floors.

Vancouver promoters are once again mobilizing their marketing armies to “get the word out” that Foofoo Mining Corp. is now “FULLY ENGAGES IN ARTIFICIAL INTELLIGENCE” and is working on a deal with Microsoft t find lithium and cobalt on Mars.

The QQQ’s are the ETF created to capture the NASDAQ magic in one very potent bottle, and as you can see, it is an ETF that is up 33.39% YTD coming off a three-week period in “overbought” status where the RSI got up into the low 80’s before heading south.

The MACD indicator is dangerously close to a full bearish crossover that, when combined with prices now stretched to the top of the Bollinger Bands, gives me a very warm and fuzzy feeling that a NASDAQ correction might be very close.

The CNN Fear-Greed Index, which was flashing “Extreme Fear” last October, has for the first time reached the “Extreme Greed” zone largely fueled by NASDAQ exuberance, much of which is irrational.

I fully recognize that I could be “early,” which translates into “I could be wrong,” which means that I will be three-for-three in failed attempts to second-guess the tech market, and the only thing worse than achieving this “Trifecta” of trading incompetence is the wagging of Millennial fingers in my wizened face.

Fingers crossed and rabbit’s feet engaged. . .

Junior Miners

If there is one sector that has become the poster child for a generation of Babyboomers, it is the junior resource space. I was talking to a young gentleman in his late twenties that has been in investment banking since he successfully passed his CFA designation five years ago after graduating summa cum laude (“with great distinction”) from a prestigious American university.

The conversation shifted from “central bank pivoting” to the junior resource space, and I was astonished to learn that the number of funds that specialize in junior resource companies has declined something like 75% in the last fifteen years.

Conversely, the pool of capital that was once the playground of adventurous youth has dwindled away as the number of “Special Situations/Technology” funds has increased tenfold over the same period. The kiddies are sick and tired of the old guys telling that old story about making it big in Diamondfields or Arequipa or DiaMet or even more recently, Great Bear Resources circa 2018, which seems for many like just yesterday but for this new generation of traders, five years is a lifetime.

Just as gold bullion has seen investors and traders ignore all of the inputs in the last twenty years that would and should have driven gold to US$3,500/ounce, junior miners have to be ignored despite compelling results and impressive resource growth, typically the catalysts for higher prices.

There have been some wins in the junior resource space, and while most of it was in lithium, even the hard-rock pegmatite deals are coming under pressure with the correction in the lithium price late last year. The kiddies love to tell their stories about sinking stimmy cheques into Gamestop at US$20 before riding it to US$400 per share in weeks.

They loved silver back in 2021 when a number of the high-profile silver promoters conned them into the #silversqueeze travesty, but their first foray into the metals ran into a bullion bank haymaker, and that sent the kiddies scurrying back into the darkness and have yet to return.

This young banker could talk more eloquently about lithium than most miners can, but at the end of the day, it is all about the flow of money rather than the “cost of production,” “preliminary economic analysis,” or “prefeasibility study.” If the stock is expected to go up, it must first have the blessing of a select few internet “influencers” that promote these juniors by way of podcasts or tweets, or private chatrooms. The expression “safety in numbers” is not to be confused with “misery loves company” because if there is one thing the youngsters have proven, especially to older aficionados of junior resource plays like me, it is that they can really move paper.

This thought is not a great deal removed from the title of this missive because it is the inability to interpret reality that has me staring at companies like Getchell Gold Corp. (GTCH:CSE; GGLDF:OTCQB) whose 2,059,000 ounces of gold in Nevada and 43101-compliant is valued at an incredible US$9.60 per ounce.

The sellers do not care about the “value-per-ounce,” nor do the prospective buyers because since the stock is not found on any of the “accepted websites” or featured in any of the “authorized podcasts,” it is not a stock that qualifies in the hearts and minds of the millions upon millions of Millennial and Gen-X traders that have a totally different set of investment rules.

That all changes when the underlying drivers that lead to a change in perception percolate down to the influencers who then bestow their blessings upon the deal, whatever that might be and whatever the reason. Just as gold bullion has seen investors and traders ignore all of the inputs in the last twenty years that would and should have driven gold to US$3,500/ounce, junior miners have to be ignored despite compelling results and impressive resource growth, typically the catalysts for higher prices. The juniors will change when it becomes commonplace for the kiddies to actually make money trading them, which means visibility and volumes have to increase.

No more grey-haired old men giving out key chains and calendars for business cards and referral leads as in a chapter of the classic Glengarry Glen Ross, a must-watch for the aspiring stock promoter in any era. . .

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 Getchell Gold Corp.,
Michael Ballanger: I, or members of my immediate household or family, own securities of: Getchell Gold 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.

Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Metals Opinions

12 Jun

Trade Of The Week: XAUUSD Gearing Up For Breakout?

By ForexTime

Don’t be fooled by Gold’s current state of calm.

This could be an explosively volatile week for the precious metal due to key economic reports and high-risk events.

Over the past few weeks, gold has found itself trapped within a range with support at $1938 and resistance at $1983. A major breakout could be around the corner and here are reasons why….

Key US inflation data

On Tuesday, 13th June the latest US CPI report will be released.

US inflation is expected to have slowed again in May after slightly easing in April. Markets forecast the MoM print to rise 0.2% after the 0.4% increase in April while the annual headline reading is seen falling to 4.1% from 4.9%. When keeping in mind that CPI hit 9.1% in June 2022, the drop in inflation has been a welcome development, driven by falling energy and commodity prices.

However, much attention will be on the Core CPI reading which excludes volatile food and energy prices. Core inflation is expected to remain unchanged at 0.4% MoM while the annual reading is seen cooling to 5.2% from 5.5% in April.

Fresh signs of cooling inflationary pressures may reinforce expectations around the Federal Reserve ending its hiking campaign. This development could inject gold bulls with renewed confidence ahead of the Fed decision on Wednesday.
If US inflation continues to run hot, rising more than market forecasts this could drag gold prices lower as bets rise over the Fed keeping interest rates higher for longer.

Federal Reserve rate decision

All eyes will be on the Federal Reserve interest rate decision on Wednesday, 14th June.

Markets widely expect the Fed to leave interest rates unchanged with traders currently pricing in a 23% probability of a 25bps hike on Wednesday, according to Fed fund futures. Nevertheless, the unexpected rate hikes from the Bank of Canada (BoC) and Reserve Bank of Australia (RBA) have created some element of uncertainty over what to expect from the Fed. Investors are likely to closely scrutinize the updated dot plots, Fed Chair Jerome Powell’s press conference for fresh clues on the central bank’s next move.

If the Fed moves ahead with a hawkish hold and signals one more rate hike in July, this could weaken gold prices – especially if the dollar rises along with Treasury yields.
An unexpected rate hike may deal with a heavy blow toward zero-yielding gold, potentially sending prices tumbling to levels not seen since mid-March 2023 around $1900.

Gold in breakout mode?

After swinging within a range since mid-May 2023, gold could be ready to break out.

A strong daily close and breakout above $1983 may inspire an incline toward the $2000 psychological level and $2018, respectively. Should prices breach the $1938 support, where the 100-day SMA resides – this could open a path back toward $1900. Ultimately, how gold concludes this week will be heavily influenced by the US inflation data and Fed decision.

Article by ForexTime

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Metals Opinions

11 Jun

COT Metals Charts: Weekly Speculator Changes 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 June 6th 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 & Gold

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

Leading the gains for the metals was Copper (9,746 contracts) with Gold (6,325 contracts), Steel (2,593 contracts), Platinum (1,207 contracts) and Silver (351 contracts) also showing positive weeks.

The market with declines in speculator bets for the week was Palladium with a total change of -552 contracts on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Jun-06-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	436,301	7	175,641	54	-198,187	47	22,546	36
Silver	137,871	23	21,475	49	-34,065	53	12,590	36
Copper	229,756	66	-25,956	8	24,610	92	1,346	27
Palladium	11,541	76	-6,602	5	7,192	97	-590	6
Platinum	67,537	65	24,613	72	-28,747	34	4,134	24

Strength Scores led by Platinum & Steel

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 Platinum (72 percent) and Steel (65 percent) lead the metals markets this week.

On the downside, Palladium (5 percent) and Copper (8 percent) come in at the lowest strength level currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (54.4 percent) vs Gold previous week (51.6 percent)
Silver (48.9 percent) vs Silver previous week (48.4 percent)
Copper (8.4 percent) vs Copper previous week (0.0 percent)
Platinum (72.4 percent) vs Platinum previous week (69.6 percent)
Palladium (4.6 percent) vs Palladium previous week (9.7 percent)
Steel (65.3 percent) vs Palladium previous week (57.8 percent)

Steel tops the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Steel (8 percent) leads the past six weeks trends for metals. Platinum (-12 percent) is the next highest positive mover in the latest trends data.

Silver (-13 percent) and Platinum (-12 percent) lead the downside trend scores currently.

Move Statistics:
Gold (-4.2 percent) vs Gold previous week (-9.1 percent)
Silver (-13.0 percent) vs Silver previous week (-7.8 percent)
Copper (-7.7 percent) vs Copper previous week (-38.6 percent)
Platinum (-11.5 percent) vs Platinum previous week (-2.1 percent)
Palladium (-6.7 percent) vs Palladium previous week (-3.8 percent)
Steel (8.3 percent) vs Steel previous week (-1.5 percent)