Metals

Archive for Metals – Page 36

Platinum Speculators raise their bullish bets to 38-week high

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 November 29th 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 Platinum

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

Leading the gains for the precious metals markets was Platinum (1,769 contracts) with Silver (717 contracts) also showing a positive week.

The metals markets leading the declines in speculator bets this week were Gold (-6,110 contracts) with Copper (-1,120 contracts) and Palladium (-523 contracts) also registering lower bets on the week.

Highlighting the COT metals data this week is the continued bullishness of Platinum positions. The large speculator standing in Platinum futures rose this week by +1,769 contracts. Speculator bets have now gained in eight out of the past nine weeks with a total rise of +24,098 contracts over that period. This has pushed the overall speculator’s bullish level for Platinum to its highest level in the past thirty-eight weeks, dating back to March 8th when the net position totaled +25,833 contracts.

Platinum futures prices have also been on the rise since hitting a September low near the $800.00 level. Platinum futures closed out this week right around the $1,026.60 level for an approximate gain by 28 percent since the September 1st low.

Data Snapshot of Commodity Market Traders | Columns Legend

Nov-29-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,412,121	1	239,739	8	-262,654	93	22,915	37
Gold	433,661	1	110,003	19	-119,233	82	9,230	3
Silver	121,258	0	17,483	33	-28,997	68	11,514	26
Copper	146,760	0	1,984	38	-3,362	64	1,378	33
Palladium	7,537	8	-1,631	14	1,687	84	-56	38
Platinum	66,468	33	24,259	42	-28,762	60	4,503	28
Natural Gas	985,010	7	-163,429	30	136,191	74	27,238	45
Brent	155,500	15	-32,087	57	29,424	42	2,663	45
Heating Oil	266,829	23	30,733	88	-48,255	20	17,522	59
Soybeans	634,754	13	87,208	40	-61,551	68	-25,657	28
Corn	1,226,410	0	270,242	65	-231,169	39	-39,073	21
Coffee	196,365	9	-14,636	2	13,695	99	941	12
Sugar	876,309	34	179,035	56	-222,607	39	43,572	62
Wheat	310,667	10	-33,305	0	37,024	100	-3,719	91

Strength Scores led by Platinum & Copper

Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Platinum (41.7 percent) and Copper (37.9 percent) lead the metals category at the moment. Silver (33.4 percent) comes in as the next highest metals market in strength scores.

On the downside, Palladium (14.2 percent) and Gold (19.2 percent) are at the lowest strength levels currently and are both in extreme bearish levels.

Strength Statistics:
Gold (19.2 percent) vs Gold previous week (21.2 percent)
Silver (33.4 percent) vs Silver previous week (32.6 percent)
Copper (37.9 percent) vs Copper previous week (38.8 percent)
Platinum (41.7 percent) vs Platinum previous week (39.3 percent)
Palladium (14.2 percent) vs Palladium previous week (17.3 percent)

Platinum tops Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Platinum (21.2 percent) leads the past six weeks trends for metals this week. Silver (17.9 percent), Copper (17.7 percent) and Gold (11.0 percent) are also positive movers in the latest trends data.

Palladium (-2.5 percent) leads the downside trend scores currently.

Move Statistics:
Gold (11.0 percent) vs Gold previous week (7.2 percent)
Silver (17.9 percent) vs Silver previous week (10.3 percent)
Copper (17.7 percent) vs Copper previous week (15.1 percent)
Platinum (21.2 percent) vs Platinum previous week (22.3 percent)
Palladium (-2.5 percent) vs Palladium previous week (-2.1 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week equaled a net position of 110,003 contracts in the data reported through Tuesday. This was a weekly decrease of -6,110 contracts from the previous week which had a total of 116,113 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 19.2 percent. The commercials are Bullish-Extreme with a score of 82.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.0 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	48.2	30.9	7.8
– Percent of Open Interest Shorts:	22.9	58.4	5.7
– Net Position:	110,003	-119,233	9,230
– Gross Longs:	209,161	134,184	33,946
– Gross Shorts:	99,158	253,417	24,716
– Long to Short Ratio:	2.1 to 1	0.5 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	19.2	82.3	3.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.0	-9.0	-9.7

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week equaled a net position of 17,483 contracts in the data reported through Tuesday. This was a weekly boost of 717 contracts from the previous week which had a total of 16,766 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 33.4 percent. The commercials are Bullish with a score of 67.8 percent and the small traders (not shown in chart) are Bearish with a score of 26.0 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.9	38.2	18.3
– Percent of Open Interest Shorts:	25.5	62.1	8.8
– Net Position:	17,483	-28,997	11,514
– Gross Longs:	48,441	46,270	22,150
– Gross Shorts:	30,958	75,267	10,636
– Long to Short Ratio:	1.6 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	33.4	67.8	26.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	17.9	-18.8	17.8

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week equaled a net position of 1,984 contracts in the data reported through Tuesday. This was a weekly reduction of -1,120 contracts from the previous week which had a total of 3,104 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 37.9 percent. The commercials are Bullish with a score of 64.4 percent and the small traders (not shown in chart) are Bearish with a score of 33.3 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	35.0	43.1	9.2
– Percent of Open Interest Shorts:	33.7	45.4	8.3
– Net Position:	1,984	-3,362	1,378
– Gross Longs:	51,433	63,196	13,549
– Gross Shorts:	49,449	66,558	12,171
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.9	64.4	33.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	17.7	-17.9	4.5

Platinum Futures:

The Platinum Futures large speculator standing this week equaled a net position of 24,259 contracts in the data reported through Tuesday. This was a weekly lift of 1,769 contracts from the previous week which had a total of 22,490 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 41.7 percent. The commercials are Bullish with a score of 59.8 percent and the small traders (not shown in chart) are Bearish with a score of 28.5 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.1	29.8	11.1
– Percent of Open Interest Shorts:	16.6	73.1	4.4
– Net Position:	24,259	-28,762	4,503
– Gross Longs:	35,268	19,824	7,400
– Gross Shorts:	11,009	48,586	2,897
– Long to Short Ratio:	3.2 to 1	0.4 to 1	2.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	41.7	59.8	28.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	21.2	-21.6	18.2

Palladium Futures:

The Palladium Futures large speculator standing this week equaled a net position of -1,631 contracts in the data reported through Tuesday. This was a weekly lowering of -523 contracts from the previous week which had a total of -1,108 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 14.2 percent. The commercials are Bullish-Extreme with a score of 83.7 percent and the small traders (not shown in chart) are Bearish with a score of 38.3 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.4	52.4	14.1
– Percent of Open Interest Shorts:	52.0	30.0	14.8
– Net Position:	-1,631	1,687	-56
– Gross Longs:	2,289	3,951	1,061
– Gross Shorts:	3,920	2,264	1,117
– Long to Short Ratio:	0.6 to 1	1.7 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	14.2	83.7	38.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.5	1.4	10.8

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.

29 Nov

Graphene is a proven supermaterial, but manufacturing the versatile form of carbon at usable scales remains a challenge

By Kevin Wyss, Rice University

“Future chips may be 10 times faster, all thanks to graphene”; “Graphene may be used in COVID-19 detection”; and “Graphene allows batteries to charge 5x faster” – those are just a handful of recent dramatic headlines lauding the possibilities of graphene. Graphene is an incredibly light, strong and durable material made of a single layer of carbon atoms. With these properties, it is no wonder researchers have been studying ways that graphene could advance material science and technology for decades.

I never know what to expect when I tell people I study graphene – some have never heard of it, while others have seen some version of these headlines and inevitably ask, “So what’s the holdup?”

Graphene is a fascinating material, just as the sensational headlines suggest, but it is only just starting be used in real-world applications. The problem lies not in graphene’s properties, but in the fact that it is still incredibly difficult and expensive to manufacture at commercial scales.

A black and white image of a crystalline layer on a surface. — Pure graphene is a uniform, single-atom-thick crystal of carbon arranged in a hexagonal pattern, as seen in this electron microscope image.
M.H. Gass/Wikimedia Commons, CC BY

What is graphene?

Graphene is most simply defined as a single layer of carbon atoms bonded together in a hexagonal, sheetlike structure. You can think of pure graphene as a one-layer-thick sheet of carbon tissue paper that happens to be the strongest material on Earth.

Graphene usually comes in the form of a powder made of small, individual sheets that are roughly the diameter of a grain of sand. An individual sheet of graphene is 200 times stronger than an equally thin piece of steel. Graphene is also extremely conductive, holds together at up to 1,300 degrees Fahrenheit (700 C), can withstand acids and is flexible and very lightweight.

Because of these properties, graphene could be extremely useful. The material can be used to create flexible electronics and to purify or desalinate water. And adding just 0.03 ounces (1 gram) of graphene to 11.5 pounds (5 kilograms) of cement increases the strength of the cement by 35%.

As of late 2022, Ford Motor Co., with which I worked as part of my doctoral research, is one of the the only companies to use graphene at industrial scales. Starting in 2018, Ford began making plastic for its vehicles that was 0.5% graphene – increasing the plastic’s strength by 20%.

Graphene has many incredible physical properties that arise from its one-atom-thick carbon structure.
AlexanderAlUS/Wikimedia Commons , CC BY-SA

How to make a supermaterial

Graphene is produced in two principal ways that can be described as either a top-down or bottom-up process.

The world’s first sheet of graphene was created in 2004 out of graphite. Graphite, commonly known as pencil lead, is composed of millions of graphene sheets stacked on top of one another. Top-down synthesis, also known as graphene exfoliation, works by peeling off the thinnest possible layers of carbon from graphite. Some of the earliest graphene sheets were made by using cellophane tape to peel off layers of carbon from a larger piece of graphite.

The problem is that the molecular forces holding graphene sheets together in graphite are very strong, and it’s hard to pull sheets apart. Because of this, graphene produced using top-down methods is often many layers thick, has holes or deformations, and can contain impurities. Factories can produce a few tons of mechanically or chemically exfoliated graphene per year, and for many applications – like mixing it into plastic – the lower-quality graphene works well.

A thin, folded, rough-edged piece of graphene. — Graphene flakes made from top-down methods are usually more than one atom thick and have impurities like folds and tears, as seen in this image.
Дагесян Саркис Арменакович/Wikimedia Commons, CC BY-SA

Top-down, exfoliated graphene is far from perfect, and some applications do need that pristine single sheet of carbon.

Bottom-up synthesis builds the carbon sheets one atom at a time over a few hours. This process – called vapor deposition – allows researchers to produce high-quality graphene that is one atom thick and up to 30 inches across. This yields graphene with the best possible mechanical and electrical properties. The problem is that with a bottom-up synthesis, it can take hours to make even 0.00001 gram – not nearly fast enough for any large scale uses like in flexible touch-screen electronics or solar panels, for example.

So what’s the holdup?

Current production methods of graphene, both top-down and bottom-up, are expensive as well as energy and resource intensive, and simply produce too little product, too slowly.

Some companies do manufacture graphene and sell it for US$60,000 to $200,000 per ton. There are a limited number of uses that make sense at these high costs.

While small amounts of top-down or bottom-up graphene can satisfy the needs of researchers, for companies even just the process of prototyping a new material, application or manufacturing process requires many pounds of graphene powder or hundreds of graphene sheets and a lot of time and effort. It took significant investment and more than four years of study, development and optimization before graphene hit the production line at Ford.

Current production can barely cover experimentation, much less widespread use.

Improving manufacturing

For a material that has been around since only 2004, a lot of progress has been made in scaling up the production and implementation of graphene.

There are hints that graphene is starting to break through at a commercial level. There are a huge number of graphene-related startups looking at a wide range of uses ranging from energy storage to composites to nerve stimulation. Major companies – such as Tesla, LG and chemical giant BASF – are also investigating how graphene could be used, in rechargeable batteries, flexible or wearable electronics and next-generation materials.

Graphene is ripe for a breakthrough that will bring down the cost and increase the scale of production, and this is an area of intense academic research. One new technique discovered in 2020, called flash joule heating, is especially promising. Researchers have shown that passing large amounts of electricity through any carbon source reorganizes the carbon-carbon bonds into a graphene structure. Using this process, it is possible to make many pounds of high-quality graphene for a relatively low cost out of any carbon-containing material like coal or even trash. A company called Universal Matter Inc. is already commercializing the process.

Once the cost of graphene comes down, the commercial applications will follow. The appetite for graphene is huge, but it is going to take some time before this material lives up to its potential.

About the Author:

Kevin Wyss, PhD Student in Chemistry, Rice University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Metals Opinions

29 Nov

We’re at the Home Stretch

Source: Michael Ballanger (11/28/22)

– With only 33 days left in the fiscal year 2022, expert Michael Ballanger reviews where he believes the markets are heading.

With little over thirty-six days left in the fiscal year 2022, it is critical that investors remember that bear markets do not last forever. Alas, neither do bull markets. And while the Jim Cramer’s of the world want to remind you that “there is always a bull market somewhere,” the reality is that there are also bear markets out there all of the time as well.

Home Stretch of 2022

As I enter the “home stretch” for calendar 2022, I can only recall one time in the past forty years that markets had a serious decline in December, and that was in 2018. Mind you, a Christmas Eve emergency meeting between Fed Chairman Powell and Treasury Secretary Mnuchin quickly remedied the Grinch-like behavior resulting in a Santa Claus rally that carried right through to new highs by the end of February 2019.

The Fed’s posture in 2018-2019 was accommodative, and their love affair with the asymmetrical wealth effect of rising equity prices was free of the impairment brought on by a 9% inflation rate so “conditions” in December 2018 were starkly distant from the conditions I face in 2022 (and beyond).

The Fed will “re-allocate” aggressively between now and year-end, and that combined with the historically high short interest should (operative word) propel stocks to higher levels by New Year’s Day.

As the portfolio manager horses gallop their way down the final few furlongs of 2022, they are not nearly as deeply underweight equities as they were in late September (when I turned on a dime and went bullish), but they are still underweight and need to deploy larger than normal cash positions before the auditors record their final holdings for 2022.

You see, they cannot have an abnormally high cash position and still charge 2% management fees without severe client pushback, so they will “re-allocate” aggressively between now and year-end, and that combined with the historically high short interest should (operative word) propel stocks to higher levels by New Year’s Day.

The month of December ranks number three in performance for two of the three major averages (Dow and S&P at number three with NASDAQ as number two), with small-cap issues outperforming the blue-chips starting around mid-month due largely to the cessation of tax-loss selling and rebalancing. There were some shaky weeks, such as in 2008 and in 1987, but since 1950, stocks have enjoyed fifty-three winning Decembers versus eighteen losers for a 74.6%-win ratio.

With that in mind, my positioning should be bullish stocks, and has been since late September, begging the question, “What could go wrong?”.

What Could Go Wrong?

The troublesome idiosyncrasy of the current profile for equities lies in the behavior of the sub-groups — as in Dow Jones Industrials — which have very few tech stocks and which are massively outperforming the S&P and the NASDAQ with the health care stocks taking on leadership roles.

That is exactly how one positions portfolios if one looks for more bear market action in 2023, which means that the defensive sectors get pumped while the heroes of the last bull get dumped.

My point is this: I think there are going to be a great many of the players exiting the markets before year-end for fear that the “Q1 Crash” narrative plays out, so when matched up against the “performance chasers,” it may just be that the net effect is a flat December and that the bulk of the gains actually was made in the first two months of Q4.

That in itself is where my contrarian nature starts to rebel because every single market pundit that I hear or read is positive for the seasonality trade but negative due to expected earnings markdowns in Q1/2023.

I cannot figure out whether it is a reverberating echo — a feedback loop — that keeps circling back to the accepted narrative or whether it represents the “collective wisdom” of market participants and one that I should actually heed rather than dismiss as “adolescent idolatry” because the kiddies that run the billion-dollar funds love to hide in the anonymity of consensus investing while old geezers like me absolutely revel in isolationism. (BTW, neither is optimum behavior.)

Make no mistake; swimming against the tide is not always the easiest nor the smartest strategy, with tech stocks and crypto being generational favorites amongst the younger crowd but toxic waste for those that are older.

As timing is everything in the world in which we trade, there was a time to listen to the kiddies, and there was a time to send them into a corner wearing dunce caps so as to cast judgment on the investment acumen on a generational basis has devolved into a name-calling mug’s game and one which I prefer to avoid.

My point is this: I think there are going to be a great many of the players exiting the markets before year-end for fear that the “Q1 Crash” narrative plays out, so when matched up against the “performance chasers,” it may just be that the net effect is a flat December and that the bulk of the gains actually was made in the first two months of Q4.

The Junior Sector

I only speak of the broad equity markets because against the backdrop of a hostile Fed and decelerating global growth, it is hard to imagine people suddenly going stark bullish on commodities, led as always by gold and silver, which is precisely what is required to light a fire under the junior resource sector, a space where I, unfortunately (due to a gambling addiction) have a large portion of my investable capital.

As I have written on countless occasions, if I woke up tomorrow from a twenty-two-year coma and scanned all news headlines related to geopolitical, fiscal, and monetary events over that time period, I would have expected gold to be priced at US$30,000 an ounce with silver at US$600. I would also have the Canadian dollar trading at US$0.10 while its citizens combat a 75% inflation rate.

However, through the machinations of the Federal Reserve and the U.S. Treasury, the legions of desk traders under contract to the National Security Services have been assigned to maintain U.S. dollar hegemony, sparing no expense and taking no prisoners.

To be sure, they have done a superb job while their bosses have been able to print astonishing amounts of phony money through unbridled DEBT creation and, until 2022, enjoyed a disinflationary, Goldilocks Nirvana where literally everything moved into “bubble” territory — except of course — the two metals that over the past five-thousand years represented safe haven, sound money status, gold, and silver.

Gold put in a triple-bottom in Q4 at between US$1,618 and US$1,622, after which it responded to the collapse in the U.S. dollar index from 114.76 to 105.26 within a three-week period in November.

After testing the highs of the rebound near US$1,792, it is now working off the mid-month overbought condition by pulling back to test the 100-DMA around US$1,720, then closing out the week at US$1,754.

The MACD indicator is threatening to flip into a bearish crossover, but it did that very briefly back in October without derailing the advance, so I am placing minimal emphasis on the MACD unless we break the 100-DMA with RSI reversing back into a downtrend; neither of which I see as being “in-the-cards.”

As for the juniors, could there be a more pitiable sector in which to throw away your savings than in the junior gold miner space?

Since the 2008 Great Financial Bailout, there have been two serious rallies in the miners — the first off the major bottom in gold prices in late 2015 and lasting until August 2016 and the second being of the Fed-induced major bottom in “everything” after the Covid Crash of March 2020, with that advance, also ending in August.

Other than that, the junior gold space (GDXJ:US), shown above when priced against the gold price, is trading at levels it last saw in Q1/2016 when gold was under US$1,200. There are dozens of other studies depicting the extreme levels of undervaluation for both senior and junior gold equities but nowhere is it more shocking than in the juniors.

Gambling Versus Speculation

My area of specialization (and passion) has always been the explorers and developers, where the terms “gambling” and “speculation” are often misplaced. This was explained to me a great many years ago after being unfairly accused of being a fan of the “ponies.”

Having grown up in the town of Malton, I used to sell newspapers (including The Daily Racing Forum (“DRF”) at Woodbine at 6:00 am to owners, breeders, and trainers, all of whom showed up coffees-in-hands to give me my US$0.25 gratuity for keeping their papers warm.

One time, I was reading the DRF when a lady in a Saint John Ambulance nurse’s outfit scolded me for being a “sinner” because, in her words, “gambling” was the “devil’s playground.”

Overhearing this exchange, one of the trainers (who turned out to be two-time Queen’s Plate winner Jerry Lavigne) walked over and pointed to the DRF in my lap and said, “Kid, don’t listen to that old biddy. As long as you’re following the numbers in that rag (the DRF) and watching the heats, you are not “gamblin’. You’re handicappin’, which is another word for speculatin’ .“

Junior mining companies, including the explorers, if researched properly, are not to be considered “gambling” because of the immense reporting requirements levied upon the management teams.

Years later, I read the now-famous words of a famous Wall Street speculator that said this: “Gambling” is a venture without calculation; “speculation” is a venture with calculation.”

Walking up to the ticket window at Woodbine and placing a bet on Malarctic Nag because you like the color of the jockey’s tights would not be classified as “handicapping” nor “speculating” because there was no calculation. It was a random selection based on no prior history of performance. If, by contrast, you watched how it ran beautifully in the slop and it was raining that day, those tender hooves would not be affected thanks to the moisture, and it would be a reasonable speculation because there was calculation involved in that decision.

Junior mining companies, including the explorers, if researched properly, are not to be considered “gambling” because of the immense reporting requirements levied upon the management teams. In prior times, due diligence involved buying the penny mining “expert” a drink at the local watering hole for his next “hot tip” and then loading up because you had it “on good information” that they were about to make a discovery.

That, my friends, is gambling. Poring over page after page of geochemical and geophysical surveys, many of which are found on sedar.com and date back fifteen years while under different ownership, after speaking with contacts that have decades of experience in a particular region or with a particular type of geology and then putting the data into a cause-effect format is actually a very sophisticated yet rudimentary form of calculation. It is like looking at the Daily Racing Form at the “heats.”

Like everything else in life, if you put in the hours, you usually have success, and in the world of junior exploration and development, you can have all of the inputs called correctly, and you can assemble all of the data properly, but if the two goddesses of the junior mining universe — Mother Nature and Lady Luck — refuse to bless you, then you are either waiting a long time (at best) or kissing your money goodbye (at worst).

As we hurtle down the home stretch of what has been a very difficult year, the bulls are calling for 4,400 whilst the bears see 3,000, and with both now screaming their cases with decibel levels resembling a 747 at takeoff, it might be a good idea to minimize expectations moving into 2023

The investing world has finally entered an era of non-interference by central bankers and sovereign treasury departments, not so much out of choice but more out of necessity, because they know that accelerating inflation rates around the globe are forcing civil unrest.

Knowing that the elitists that control 90% of the world’s wealth only thrive when they have an obedient populace chasing the clearly-crafted dream of untold riches, status, and social media popularity and recognition.

When the lure of such achievement is finally and summarily dismissed by a generational metamorphosis of expectations, it becomes the personal nightmare of the privileged classes because the tools they have used since 1910’s Jekyll Island event (resulting in the creation of the Federal Reserve in 1913) have been rendered obsolete in 2022 by the arrival of a 9% inflation monster and a bear market in stocks.

For the return of Mother Nature’s blessing to the junior miners, the new and very much younger generation of speculators must be repelled by technology and crypto and enticed by physical ownership of hard assets. Once physical gold and silver become accepted by the Millennial and Gen-X crowd, then the offshoots, such as the junior producers, developers, and explorers, will rise like the Phoenix and take their rightful places at the head of the Table of Outsized Returns.

With my portfolio suffering from the apathy surrounding some very well-positioned (and well-financed) junior mining companies, I have allocated some 15% to the double-leveraged SPY ETF trading under the symbol of UPR:US where purchases in late-September/early October have me ahead 20.75%, hanging on to that gain for dear life in order to either add to my metals or re-allocate to the volatility trade (UVXY:US) which is down from its yearly high of US$26.22 to the unfathomable level of US$7.66 before closing the week at US$7.75.

As we hurtle down the home stretch of what has been a very difficult year, the bulls are calling for 4,400 whilst the bears see 3,000, and with both now screaming their cases with decibel levels resembling a 747 at takeoff, it might be a good idea to minimize expectations moving into 2023 because the truly contrarian viewpoint is to expect nothing but sideways action until mid-January.

Would that it could be so . . .

Michael Ballanger Disclaimer:

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.

Disclosures:
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Metals Opinions

28 Nov

Trade of the week: Gold Waits For Fresh Fundamental Spark

By ForexTime

Gold kicked off the week on a positive note as unrest in China over Covid restrictions strained global sentiment. A growing sense of anticipation ahead of the US jobs report along with other top-tier data this week added to the overall caution, leaving investors on edge. With a softer dollar adding to the mix, bulls were injected with enough confidence to challenge levels not seen since November 18.

Nevertheless, the precious metal remains in a wide range on the daily charts with support at $1735 and resistance at $1785. Over the past few weeks, gold has bounced within this range as bulls and bears engaged in a fierce tug of war.

However, with the fundamentals slowly tilting in favour of gold bulls – a solid breakout could be around the corner. Gold needs a fresh fundamental spark to get its gears moving and this could come in the form of speeches from Fed officials, geopolitical risks, or high-quality US economic data.

Before we thoroughly discuss what to expect from gold over the next few days, it is worth keeping in mind that gold is up roughly 8% this month. November will be the first positive month for the precious metal since March 2022! Looking at the technicals, bulls are certainly in the vicinity on the daily and weekly timeframe but things still look choppy on the monthly charts. If the developments and data over the next few days support gold bulls, this could set the tone for December.

The low down…

It has been a volatile year for gold.

After surging and peaking in March following Russia’s invasion of Ukraine, the precious metal found itself on a slippery decline as the Fed aggressively raised rates to tame inflation. Although gold is down roughly 4% year-to-date, this inflates to almost 15% when measured from the March 2022 high.

Could the precious metal be experiencing a change of fortune after being beaten black and blue for most of this year? Given how the Fed is expected to slow its pace of interest rate increases in the face of cooling inflation, this may lead to a weaker dollar and falling Treasury yields. This combination is nothing but good news for zero-yielding gold which will most likely shine in a low-interest rate environment.

The week ahead…

This could be a big week for gold due to the protests in China, speeches from Fed officials including Jerome Powell, and key US economic reports.

Bulls have already made a move on Monday thanks to geopolitical tensions and this momentum could roll over into the next trading session. It may be worth keeping an eye on speeches by New York Fed President John Williams, and St. Louis Fed President James Bullard. There is a lot going on mid-week with Fed Chair Jerome Powell under the spotlight. He is expected to reinforce expectations over the central bank slowing its pace of interest rate increases from December. Such a development may lead to a weaker dollar and falling Treasury yields – resulting in a boost for gold prices. Investors will also be presented with the Fed Beige Book report and US 3Q GDP second estimate which could result in some additional dollar volatility, spilling over to gold.

Thursday sees the release of the US weekly initial jobless claims and most importantly PCE deflator. Much attention will be directed toward the PCE Core Deflator which is the Fed’s preferred measure of inflation. Any signs of cooling inflation will most likely fortify expectations around the Fed adopting a less aggressive approach toward rates.

It’s all about the US jobs report on Friday which could be the real market shaker. Markets expect the US economy to have created roughly 200,000 jobs in October while the jobless rate is expected to remain unchanged. A report that meets or prints below expectations may justify a change in the pace of the Fed’s policy tightening – ultimately supporting gold.

Time for gold to re-test $1800 and beyond?

On the daily timeframe, gold prices are trading above the 50 and 100 SMA but below the 200 SMA. As identified earlier, support can be found at around $1735 and resistance at $1780. A solid breakout above $1780 could open the doors towards $1800, $1840, and $1858. Alternatively, a move back below $1735 could signal a selloff towards $1700, $1680, and $1665.

Article by ForexTime

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

Metals Opinions

20 Nov

COT Metals Speculators boost their Gold bullish bets to 13-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 November 15th 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 Gold

The COT precious metals speculator bets were higher this week as all five of the metals markets we cover had higher positioning this week.

Leading the gains for the precious metals markets was Gold (43,931 contracts) with Copper (6,908 contracts), Silver (4,604 contracts), Platinum (3,095 contracts) and Palladium (1,338 contracts) also showing a positive week.

Highlighting the COT metals data this week is the rebound of the Gold speculator bets. The large speculator position for Gold jumped by over +40,000 contracts this week following a gain by over +17,000 contracts. This week’s rise marked the highest weekly gain in 143-weeks and the renewed speculator sentiment has pushed the overall Gold net position back above the +100,000 contract level for the first time since early September. The Gold speculator net standing is now at the highest level since August 16th when the net contracts was +141,164 contracts.

Gold prices have had a bit of an upswing since November 4th as well as the futures price has risen from the (Nov. 4th) opening level of $1,631.00 to close out this week at the $1,754.40 threshold. Gold, also this week, touched its highest level since the middle of August just below $1,792.00 before retreating lower.

Data Snapshot of Commodity Market Traders | Columns Legend

Nov-15-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,469,437	3	278,267	18	-307,395	81	29,128	48
Gold	495,171	17	126,269	25	-134,308	78	8,039	0
Silver	141,623	14	17,607	34	-29,424	67	11,817	27
Copper	168,962	9	9,821	44	-13,583	56	3,762	47
Palladium	8,793	14	-1,072	17	1,231	81	-159	32
Platinum	63,391	27	22,544	39	-27,037	62	4,493	28
Natural Gas	978,425	6	-152,114	33	120,830	69	31,284	54
Brent	139,080	4	-25,194	69	20,782	28	4,412	69
Heating Oil	275,254	26	25,660	80	-46,933	21	21,273	72
Soybeans	616,094	9	76,804	37	-49,046	72	-27,758	24
Corn	1,421,555	22	252,908	62	-211,862	42	-41,046	19
Coffee	191,743	6	-14,154	0	11,840	100	2,314	32
Sugar	832,522	26	156,194	59	-201,779	39	45,585	64
Wheat	350,091	27	-22,481	0	29,310	100	-6,829	75

Copper & Platinum lead Strength Scores

Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) showed that Copper (44.1 percent) and Platinum (39.4 percent) lead the metals category. Silver (33.5 percent) comes in as the next highest metals market in strength scores.

On the downside, Palladium (17.5 percent) is at the lowest strength level currently and is in a bearish extreme position with a score under 20 percent.

Strength Statistics:
Gold (24.6 percent) vs Gold previous week (10.0 percent)
Silver (33.5 percent) vs Silver previous week (28.4 percent)
Copper (44.1 percent) vs Copper previous week (38.6 percent)
Platinum (39.4 percent) vs Platinum previous week (35.2 percent)
Palladium (17.5 percent) vs Palladium previous week (9.7 percent)

Platinum tops the Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Platinum (25.9 percent) leads the past six weeks trends for metals this week. Copper (22.3 percent), Gold (12.6 percent) and Silver (9.8 percent) fill out the other positive movers in the latest trends data.

Palladium (-2.8 percent) leads the downside trend scores currently.

Move Statistics:
Gold (12.6 percent) vs Gold previous week (10.0 percent)
Silver (9.8 percent) vs Silver previous week (13.5 percent)
Copper (22.3 percent) vs Copper previous week (24.4 percent)
Platinum (25.9 percent) vs Platinum previous week (25.9 percent)
Palladium (-2.8 percent) vs Palladium previous week (-9.3 percent)