Category Archives: Commodities

by | September 19, 2013 · 1:06 pm

Rally in Gold

Once the news about the surpricing «no-tapering» was known, the US dollar dropped sharply and the crude oil moved sharply up. So did the gold market. December Comex gold was last up $32.80 at $1,342.50 an ounce. December Comex silver last traded up $0.706 at $22.48 an ounce.

The FOMC members do not belive that the economy in the US is healthy enough to begin winding down QE, and they are worried about the rise of the interest rates choking off the fledgling economic recovery.

As long as the unemployment rate remaind above 6,5 percent, the FED still want to keep the short-term rates near zero. It`s not because more people are finding jobs in the US, but because fewer people are looking for work we see a decline in the unemployment rate.

With no change in the policy, we saw markets rallied and volatility evaporated. The special thing this time is that the indexes was at the all time high. DJIA, Nasdaq, S&P 500 and NYSE all went up. Futures and VXX fall 4%.

News to follow today:

Unemployment Claims at 8:30pm,

Existing Home Sales at 10:00am,

Philly Fed Manufacturing Index at 10:00am

Take a look at the last candle stick in the gold index below. What a nice rally for day traders!

Rally in Gold

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 | September 18, 2013 · 9:56 am

Beginning of the end of QE?

The FED started its two day monetary meeting yesterday, and today is the day for the big news, the most important news in a long time, and the market consensus is that the FED will begin to rein in its stimulus program. Investors expect the FED to reduce its bond purchases by $10 billion a month. From $85 billion to $75 billion a month.

This tapering is expected and the equity market may not move so much from here. Nor should the goldprices move so much, because so far in september we have seen a huge sell off in the goldprices. The tapering is largely priced in.

In my TA earlier with the headline: «where is the bottom?», I see a higher high, and a higher low. 50% retracement is at 1307. A great support. I will not be surpriced if the goldprices might rise after the FOMC meeting today.

I will pay attention to the FOMC Statement & Fed Funds Rate today at 2:00pm, and FOMC press conference at 2:30pm. Other important things to follow today: Building Permits at 8:30 and Crude Oil Inventories at 10:30.

Ben Bernanke is using the expected tapering as a way to exit his FED Chairmanchip. To reduce the QE he will argue that his money printing program has a positive impact on the market, and the size of the move is symbolic. So, this is the beginning of the end of quantitative easing?

Nope. The debt is too high. That`s why FED is printing money. They use QE to finance the federal budget deficit. The debt is so high and there is not enough buyers in this world to buy all the bonds. If the FED stopped to buy these bonds by QE, the bond market in the US would crash, and the interest rates would go straight up to heaven!

QE will never end.

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 | September 17, 2013 · 1:18 pm

Speculators cut bulllish gold futures

The gold has been falling because the investors do not see any oportunity in «disaster insurance»,

Ben Bernanke said in july this year. What will Ben Bernanke say this week? The gold prices are falling, because investors are not so concerned about the extreme outcomes anymore.

A stronger dollar will diminish gold demand. Once the tapering is known, investors expect a fresh selling wave. In addition, if the inflation keeps low the gold prices will continue its decline and probably below $1000 an unce.

Goldman Sachs target for gold is $1050 for 2014, and gold futures haven`t traded below $1000 since 2009. Credit Suisse expected the gold to decline below $1000 an unce in may this year. The gold prices have been falling over 20 percent this year. The inflation is still low, and so far we have seen an equity rally.

From 2008 to june 2011 gold prices jumped 70 percent! In that period Ben Bernanke pumped more than $2 trillion into the market to buy debt. I think that Ben Bernanke will never accept deflation, and if they are in need, they will continue to print money. No matter who the Fed chairman is.

Who`s the next Fed chairman? Larry Summers has been a name on the list but is withdrawing as a candidate to the next Federal Reserve Chairman. We will probably see a chairwoman next time after Ben Bernanke. Janet Yellen is the next big name.

Wall street love her, and they wan`t a person that will pump a lot of money into the market when the new crises hits. Janet Yellen is the right one to do that. She will PUMP! No matter what. She is the right person.

Investors will wait for the outcome of the FOMC meeting this week. No tapering will likely usher in «relief» rally for this precious yellow metal.

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 | September 16, 2013 · 1:40 pm

Syria and Ben Bernanke

Finally, the Russian and American deal to damage Assads chemical weapons will give Mr Obama a «time out». But is it so easy? I hope so, but the list of what can go wrong is long, extensive and daunting.

What if Assads regime is hiding the chemical weapons stock? What if the international inspectors will be obstructed? Saddam Hussain played cat and mouse game with the international inspectors in 1991. The questions is: Do Mr Obama have a plan B? This case is not finish yet.

Tomorrow and wednesday, Ben Bernanke will have a very important speech. He sayd this on september 11; «Quantitative easing typically refers to policies that seek to have effects by changing the quantity of bank reserves, a channel which seems relatively weak, at least in the U.S context».

The meeting on 17 – 18 september will tell us whether the economy is strong enough to begin tapering $85 billion in monthly bond purchases. If so, they will use a forward guidance to try to convince the investors so they can keep the interest rates low and bring down the unemployment.

Thinking back in time, there is always something extensive and daunting things that could change the game in the market. Unexpected things can always happen and that is very often things that no other was thinking of. So what is the next big thing that will shock the financial market?

The world`s largest gold-backed exchange-traded fund SPDR Gold trust, had their biggest decline since Aug 1. Their holdings fell 0,66% to 911,12 tonnes on friday. Hedge funds and money managers have turned to a bearish sentiment for the first time in five weeks.

The gold price is 1314,80 right now.

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 | September 14, 2013 · 8:57 pm

Is this the bottom?

Gold and gold mining stocks drops and gold are now at 1325 from 1400 last week. Gold and miningstocks have been in a bearish market for a long time now, and seem to bottomed in june. We can see a higher low in the chart, and we are probably in a consolidation period for the HUI index. We will then see some moves after next weeks FOMC meeting.

Maybe we will see the bottom before the meeting and 280 in the HUI index is a level we must take closer look at. A very important level. If it breaks thru that level, then it`s time to buy in the bull market. But before that we will probably see a higher low.

I watched CNBC and the intervju with their gold specialist Alan Gartman. He got bullish last week, but now he have turned around and says he turned bearish.

Wall Street Journal had a survey and asked market participants about the FOMC meeting. Two-thirds of the people said that they expect FOMC to launch tapering next week.

Bart Melek, vice president and director, head of commodity strategy, rates and foreign exchange research at TD Securities says gold will trend down below $1,200 as 2014 unfolds. Take a look at the HUI index below:

Image

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