Category Archives: Commodities

by | January 27, 2014 · 2:37 pm

American shale revolution

Asian markets slid today and Europe is trading down too, but U.S seems to open up today. This week will be very interesting. I think many investors are nervous now, as day traders love this volatile markets. It was a nice move for day traders on friday.

Not a good week for stocks last week. S&P had its worst week since 2012. Dow fell 318 points alone on friday. Will this sell off continue? A lot of earnings report are coming out this month. Janet Yellen is the next Fed chairman from february 01, but the next BIG news is the FOMC statement on Wednesday at 10:330am. Pay attention to this.

The U.S montly trade deficit was at its lowest in four years and that is because of the American shale revolution. That`s good news from a new report I was reading this weekend. This is good news for the growth, jobs and for the country.

Libya is in disarray and Iran and Iraq are thumbing their noses at Saudi Arabia by pledging to break OPEC’s 3 million bpd quota. This is bad news for OPEC, and if this is the new trend, this is very good news for America.

People are scared now before the FOMC statement on Wednesday. That`s why we see the sell-off now. What a power they have. Everything they say will move the markets, so what are the news on Wednesday? What about the tapering?

Safe-heaven currencies like Swiss franc and Yen slid today as the dollar surged. If the Fed starts to reduce its monetary stimulus this week, the U.S dollar will continue to rise. That will hit the Emerging markets currencies.

Reports today: New Home Sales at 10:00am.

oil-shale

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication

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by | January 24, 2014 · 2:45 pm

Gold is up

CEO Jamie Sokalsky in Barrick Gold (ABX) expects the reserves and productions will fall after the biggest annual price decline in gold since 1981. They will recalculate its reserves at a gold price of $1,100 an ounce and that is down from $1,500 an ounce a year ago. That is resulting in a decrease in its reserve base.

Gold production will be lower this year because of assets sales, while they are focusing on more profitable mines. They have closed its Pierina mine in Peru and in addition they have reduced the output from the Cortez gold mine in the U.S.A. They also expect the Aldivar copper mine in Chile to produce less in 2014.

Sokalsky expects a write down on its Pascua-Lama project and they are looking for other asset-value reductions. Barrick Gold is the biggest whale among the gold stocks, but along with the declining gold price we have seen, Barrick`s Market Cap has plummeted 50%.

Barrick`s management has been effective and not wasted their time during the declining gold prices. They have used the time wisely, sold assets, reduced the debt, conserved cash, implemented accounting impairments, and still cutting costs. They are moving in the right direction with a lower cost structure.

This story is not unique, as it is the same story for Newmont (NEM), and Goldcorp (GG). As the gold prices has plummeted we have been witnessed to a massive write-down. Barrick Gold is down -43,3% (1 YR), but are up 9,5% so far in 2014. Is the bottom behind us?

Newmont is down -43,8% (1 YR), but are up 9,3% in 2014. Goldcorp is down only -35,5% (1 YR), up 11% this year. The Junior Gold miners ETF (GDXJ) is up 19,5% this year (-53,8% 1 YR), while Market Vectors Gold Miners (GDX) is up 12,3% (-46,8% 1 YR).

Endeavour Silver Corp (EXK) has skyrocket this year, trading at $24,50. Up 24% in 2014. Silver Standard Resources Inc (SSRI) is up 20,1% so far this year. Silvercrest Miners (SVLC) is up 19%, Santacruz Silver Mining Ltd (SZSMF) is down 1,1%, while Taho Resources Inc (TAHO) is up 6,2% in 2014. Silver seems to be a better investment so far.

No major reports today.

gold_price_wobbles_as_liquidation_intensifies

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication

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by | January 13, 2014 · 2:26 pm

Earnings reports this week

Gold is up 3,63% so far this year and the precious metal is trading at $1248,5 at the moment. That is a nice bounce off of the $1200 level. It is not so good for the Dow, which is down 33 points after the bad news on friday. The job growth surprised everyone as Nonfarm payrolls rose only 74,000 in December. Some people are shocked. The S&P 500 ended up 11 points. U.S equities finished the week mixed on the news.

Raw-material prices was down 3,2% this year and this is the worst start to a year since 2007. China is the biggest user of everything, from cotton to pork to zinc and the producer prices declined in December for a 22nd straight month, and this is the longest decline since the Asian financial crises in the 1990`s.

Much has been done of the sharp fall in the unemployment rate to 6,7% and this keeps the Fed on course to start the tapering at this months January meeting, which is January 28-29.

The labour participation rate is at a 35 year low, at 62,8%. It is not a positive thing that so many people have stopped looking for work. Are they really gonna start tapering now?

Hedge funds are cutting their bullish commodity wagers now on signs of slowing economic growth in China and surplus supply.

This year started bad with the major indices trading down the first trading days of the year. This bad starts followed by bad news with only 74000 (non-farm) jobs created in December.

The markets is not as strong as we had thought it might be, and we need some good news now to kick-start the markets again. If not we could lose key support lines. A lot of information is coming out this week.

Very important news is coming from retail sales, housing data, the Fed Beige Book, and consumer sentiment. Earnings reports is on the way too. Bank of America (BAC), Goldman Sachs (GS), J.P. Morgan Chase (JPM), as well as general electric (GE), Wells Fargo (WFC) and Intel (INTC) are some of the large amount of earnings data that will be important to the market this week.

We need a solid week to hold onto technical support.

News today: Federal Budget Balance at 2:00pm (forecast 44,3B – previous -135,2B).

SPX 13.01.2014

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | January 10, 2014 · 2:20 pm

U.S. nonfarm payrolls data

Yesterday we saw another mixed trading session, and today market participants will wait for the job report at 08:30 ET. The U.S stock index futures is up before the data that shows us that American employers last year added the most workers since 2005.

It is probably added 197,000 jobs in December, which means 2,27 million jobs in 2013 and that will be the strongest year in 8 years. The unemployment rate remain at a five-year low, landing on 7% in December last year. A strong report job data today could make the Fed to reduce its bond-buying stimulus and start the day it starts hiking rates.

The Fed will have a new meeting at Jan 28 – 29. In December they announced that they will reduce its monthly bond-buying program with $10 billion. The reason why they pay $75 billion instead of $85 billion is the recovery in the labor market. The QE program they started has helped the S&P 500 to reach a new high from a 12-year low in 2009.

Market makers will look at earnings numbers now. Many retailers will probably deliver good fourth quarter reports, but what about the banks? Next week we will see reports from Bank of America, Goldman Sachs Group and JP Morgan Chase & Co. That will be interesting numbers.

A slow start in the stock market so far in 2014 have boosted gold prices. Gold ended a 12-year bull run and lost 28% of its value last year. Economic data has showed us that the U.S economy is gaining steam. If the number today exceeds investors expectations, gold will probably go to $1200 or below.

Important news today: Non-Farm Employment Change & Unemployment Rate at 8:30am.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | January 9, 2014 · 2:24 pm

Factores that moves the gold price

Gold has always been revered as a symbol of wealth and prosperity. Gold reminds us of the Egyptian Pharaohs and the voyage of Columbus to the New World. Gold has also been used as currency and as a way to prop up the fiat money.

The U.S put the dollar on the gold and silver standard in 1792, and that is one of the most important moves to gold and silver-backed currency.

President Richard Nixon removed the gold standard in 1971 (179 years later). As you can understand; it had a huge impact of the gold-price around the globe. In 1980, the gold price went from $35 an ounce to a record high of $850 an ounce. That is above $2000 an ounce adjusted for inflation. On March 19, 2008, gold price hit a high of $1,022,40.

You can buy gold on these Gold Exchanges:

The futures contract for gold is traded at the

New York Mercantile Exchange (NYMEX) through its Commodity Exchange (COMEX) division via open outcry.

It is also traded electronically through the Chicago Board of Trade (eCBOT),

India’s National Commodity and Derivatives Exchange (NCDEX),

Dubai Gold and Commodities Exchange (DGCX),

Multi Commodity Exchange (MCX) and

Tokyo Commodity Exchange (TOCOM).

The gold supply will not be able to meet the demand in less than 45 years. Worldwide gold production will continue to underperform against worldwide demand.

The World Gold Council estimates that the total gold mined annually is about 2,500 metric tonnes. 3,500 metric tonnes of gold is used in the jewelry, investment and commercial industry. It is difficult to determine where the last 1,000-ton gold shortfall will come from.

It is widespread commercial use of gold as a coating on electrical connectors. They use it on video cables, audio, to computers, component cables and connectors.

India is the biggest consumer og gold worldwide, with an annual consumption estimated at 700 tons a year. India`s estimated gold demand at US$30 billion by 2015.

IMF (The International Monetary Fund) and WAG (Washington Agreement on Gold, have a very strict requirements in gold sales: less than 400 tons per year. The members can`t use gold to back or replace their currency.

The gold prices has been volatile with extreme pricing and the most extreme of any commodity on the market. Gold has cyclically come into and out of favor as an investment.

The demand for gold for use as electrical conductivity will historically continue a long time to come.

The big question is whether the gold will continue as a viable inflationary hedge? It remains to be seen…….

News today: Unemployment Claims at 8:30am, 30 Year Bond Auction at 1:01pm.

gold_price_wobbles_as_liquidation_intensifies

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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