Category Archives: Commodities

by | March 19, 2014 · 1:09 pm

FOMC Press Conference

Asian stocks fell today as investors are waiting for the Federal Reserve`s policy statement. The FOMC (Federal Open Market Committee) will end a two-day policy meeting today, after data yesterday indicated the U.S home-building industry is stabilizing.

Investors are still very cautious and The Fed will probably water down their forward guidance and keep U.S interest rate low for at least another 18 months. The FOMC will further scale back its bond-buying at the meeting.

They will probably reduce purchases for the third time by $10 billion to a $55 billion monthly rate. Gold had the longest slump since mid December 2013. What is going on with the precious metal? Are the first stage in the gold bull over?

Gold has declined before the meeting and are now trading at $ 1345,10. Nobody knows what Janet Yellen will say today, but it is expected that the gold will bottom out today before the meeting and then go up again.

Traders will probably sell on rumors of Fed tapering and will cover shorts and buy after the announcement. Gold broke out of its first stage, and now have a sharp pullback to previous resistance. Gold is volatile so it is expected.

Now, it will be interesting to follow the bond market. It seems like it is on the way to break out to the upside. If TLT ETF who tracks the value of the 20-year treasury bond breaks out, the rates will drop. So, how will that be if the Fed buy fewer bonds?

Right after the Fed meeting, I will follow the gold price, stock market, bond market and the interest rate. Janet Yellen can move the market, but it depends on what the news is? I look forward to the FOMC meeting today.

Reports today:

02:00 AM ET FOMC Economic Projections
002:00 AM ET FOMC Statement
02:00 AM ET Federal Funds Rate
02:30 AM ET FOMC Press Conference

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 | March 18, 2014 · 2:02 pm

Gold strategy

Gold is a safe heaven in times of inflation because it retains its value much better than currency-backed assets, which may climb in price, but drop in value. Gold has been a popular investment for investors for centuries. The experts say you should spend 10% of your assets in gold.

Gold

It`s easy to buy stocks, but investing in gold is something different. There are a number of different ways to invest in the underlying movements of the precious metal. If you invest in the wrong type of gold investment you can end up with an underperforming asset, even if the price of gold is moving fast in your favor.

 

Some people will try to tell you the story that empires were built on gold and how the fiat currency of the U.S will plunge and be worthless. The fact is that gold need to be treated in the same way. So, be careful and try to invest in the right option available for investing in gold.

 

You can buy physical gold, derivates contracts, gold mining stocks or exchange traded funds. Which one is the best to put the money in? Don`t invest in gold with the idea it always go up. It doesn`t. It goes up and down like any other investment products.

 

You can buy physical gold and safe-keep it in you own house. This is the most traditionally way of investing in gold. But it is also the most inefficient way to own gold. You can buy coins or bars from an online dealer.

 

Unfortunately, you have to pay sales tax on their purchase and more inefficiencies come up when you go to sell the gold you have since the IRS consider gold bullion and coins «collectables» which are subject to a higher maximum tax rate of 28%.

 

If you plan to store all your gold in your own home there may ba another problem. The risk is high when it comes to theft, fire and natural disasters. Another plan is to put the bold in a box at the bank, but that will cost a fee and you will not be able to access your gold if you want to sell it short.

 

Investing in gold futures or options makes you leverage a lager amount of the precious metal. You can profit on the price move depending on whether you are bullish og bearish in the market. The downside is that this strategy is very volatile. It`s up to you: you can turn a small amount of money into big profit or you can lose everything you have very quickly.

 

Another risky business is investing in mining gold stocks. Pick the right junior or major stock. Junior companies are small companies which is very speculative hoping to find a big score. Major miners are more established.

 

As the price of gold goes up, the margins of the companies go up as well. This can be reflected in their stock prices, but like other stocks, if the mining company have a poor management tbe price of shares will suffer even if the gold price moves higher.

 

ETF (Exchange Traded Funds) is probably the smartest way of investing in gold. The most popular gold ETF is SPDR Gold trust (GLD). One share is about 1/10 of an ounce of the spot price of gold.

 

Another ETF is the Market Vectors Gold Miners ETF (GDX) which tracks the major miners and the other one with the symbol GDXJ which tracks the junior miners. GLD tracks the movement of gold and have low expenses.

 

It is liquid and you can sell it whenever the stock market is open. Investing in GLD eliminates the storage issues and lower your risk. This investment is better than putting all your eggs in one basket. GDX and GDXJ will not always track the price of gold as GLD by being proxy for the mining industry as a whole. GDX and GDXJ spread the risk across multiple companies in the gold mining industry.

 

Reports today:

 

08:30 AM ET Building Permits
08:30 AM ET Core CPI m/m
08:30 AM ET CPI m/m
08:30 AM ET Housing Starts
09:00 AM ET TIC Long-Term Purchases

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 | March 17, 2014 · 2:13 pm

Crimea vote

It`s all up and green in Europe today. We see a cautious rally after Crimea vote. The opening in U.S today will be mixed, but it can change later on today. Obama spoke to Putin after the vote, and Putin pointed that the vote is legal.

Moscow city

(picture: Mosow city)

The U.S and EU warn Russia against moving to annex Crimea, and today mull sanctions. Gold is declining to $1378,60. I think this is some profit-taking pressure from recent gains that saw prices hit a six-month high overnight.

 

The vote in Crimea should not be a big surprise. The Russian parliament said it would move fast to annex the Crimean region. Any escalation of tensions in Ukraine would quickly put risk-aversion back into the markets.

 

Now, we should look for the possible sanctions against Russia. If the U.S and EU slap Russia`s hands with diplomatic and economic sanctions, we will see the Russian stock market in a big drop. We saw the stock market in Russia plummeted earlier with a drop of -20% in on single day.

 

That was more expensive than the Olympic Games in Sotsji. Not good for a company that went bankrupt in 1998. The economy is the eight largest economy in the world. They have an abundance of natural resources, including timber, precious metals, and particularly fossil fuels (oil, natural gas and coal) that can be developed without the constraint of OPEC production quotas and other rules.

 

Russia in not a OPEC member. Russia`s oil and gas production have been not only a primary source of Russia`s economic growth but also a geostrategic lever in the country`s relationship with Europe and Asia.

 

Russia has undergone significant changes since their collapse in 1998. They have moved from a centrally planned economy to a more market-based and globally integrated economy. The economy is more privatized in many sectors now.

 

Russia`s capital, Moscow, had the highest number of billionaires of any city in the world, and the Russian government predicts growth rates for future years at 2,5% of GDP. Putin and his friends are often criticized for their «loan-for-shares» scheme that turned over major state-owned firms to politically connected «oligarchs» has left equity ownership highly concentrated.

 

It`s a big country and it all collapsed and went bankrupt in 1998. As we all know, U.S is also a big country, with a lot of problems. Do people around the world really know how serious the problems in the U.S is? I hope so, because everyone should be prepared and protect themselves.

 

Reports today:

 

08:30 AM ET Empire State Manufacturing Index
09:15 AM ET Capacity Utilization Rate
09:15 AM ET Industrial Production m/m
10:00 AM ET NAHB Housing Market Index

 

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 | March 14, 2014 · 12:50 pm

Gold bull

A big drop for Nikkei today. Down -3,3% and 6,2% for the week. Futures contracts expires and there are some Ukraine ans slowing China growth fear. U.S indices sled yesterday too. All the European markets are also down today.

Gold

Is this the beginning of the end? Yes, but I don`t think the market will crash now. We are in a stage three-phase which have started now. We see markets are going up but at the same time we see fewer stocks participating in the bull market.

 

This is what happens in a bull market when it comes to an end. The final leg can go on for months, so it is not expected to see the bear to attack yet. This is the reason why I am not buying U.S stocks now. It`s late in the party.

 

But if I`m righ, I have recognised a new party that have just begun. It hit the bottom at the end last year, and now we see it above 250, which is a good sign. 50 MA have not crossed the 200 MA yet, so we have to be cautious.

 

What I am talking about is the gold bugs. I like what I see, but I am very sceptical at the same time, or let`s say still less bearish. I follow this market every day and I know that most of the people in this business are not so positive and that bother me a bit.

 

Reports today:

 

08:30 AM ET PPI m/m
08:30 AM ET Core PPI m/m
09:55 AM ET Prelim UoM Consumer Sentiment
09:55 AM ET Prelim UoM Inflation Expectations

 

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 | March 12, 2014 · 2:11 pm

China fears

Japan`s Nikkei fell -2,6% today, as investors locked in some profits as caution over Chinese demand continued to hurt commodity stocks. Nikkei ended at 14,830,39 points. It`s all down in Europe too. Gold is up +1,22%.

Gold

Shanghai copper fell by its 5% daily limit and London copper hit a 44-month low. Investors eyes are on mining stocks now because the world’s top user of copper (China) could unlock copper from financing deals and unleash more selling.

Credit Agricole said in a note that it looks bad, and that copper prices continue to be hit by China growth worries. Ukraine tensions have intensified with diplomatic efforts yielding no success and that makes investors nervous.

The U.S markets will open up in a negative territory today, putting the S&P 500 on track for a third day of declines. All this because of the China fear. Not all the investors are selling stocks. Some of them are always looking for bulls.

Take a look at Oxigene Inc (OXGN:O) today. That stock surged 145% before the opening bell, trading at $5,93. They have declared a contract with shareholders to purchase an aggregate of almost $12 million of units at a price of $2,05.

The share faced its lowest price of $2,09 during the latest trading session. The trading volume with the big jump is 8,54 million shares, compared with the average of 586,076 shares. The company`s market cap is $27,75 billion with 11,47 million shares outstanding.

Reports today:

 

10:30 AM ET Crude Oil Inventories
01:01 AM ET 10-y Bond Auction

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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