Buy made in NZ
PRC :)
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Buy made in NZ
PRC :)
Uraium outlook and other useful insights
http://www.financialsense.com/fsu/ed...2007/0910.html
Great article indeed, thanks Mick
Just shows that the current weakness will stay around a little longer whilst the sub prime problem remains, & then i would expect the price of Uranium will continue to rise in 2008.
Hence the reason im bullish on Uranium, & believe we will hit new highs during 2008 of $US150lb.
Yep thanks Mick, that was a good read. I pasted the link on the AGS thread on HC for folk over there to have a gander at too. It's good to see a rational view of the longer term to remind the panickers why the uranium story hasn't really even got started.
Cheers :-)
COMMODITY INDEXES SURPASS FUNDSby David ShvartsmanCommodity index investment products are helping mainstream investors ride the bull market in commodities. And as Bloomberg reports, this year the indexes have outperformed the leading commodity focused hedge funds.
Finance Trends Matter
November 12, 2007
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Excerpt from, "Calpers beats Pickens as Commodity Indexes Clobber Hedge Funds".
T. Boone Pickens, the billionaire oil trader who predicted crude's rise to $100 a barrel, is lagging behind commodity-index investors for the first time since 2003.
Even California Public Employees' Retirement System, the 75-year-old pension fund that ignored commodities until eight months ago, is beating Pickens. Calpers invested in the Standard & Poor's GSCI Index, up 32 percent this year, while Pickens's BP Capital fund rose 22 percent.
From Dwight Anderson's Ospraie Management LLC to Global Advisors LP, commodities hedge funds failed to anticipate the 58 percent advance in oil and 31 percent gain in gold that powered indexes to their highest levels in two decades. While bullish forecasters at Goldman Sachs Group Inc. and Deutsche Bank AG advised clients to double down on commodities in January, they didn't expect this year's returns.
I have to say, this level of return from the overall commodity indexes was not what I was expecting for this year.
After a four or five year run in the GSCI, I expected a rather muted performance or even the start of an intermediate term correction in the major indices, with the potential for larger gains concentrated in several of the more overlooked individual commodities and commodity sectors.
It turns out Goldman Sachs was right in their 2007 call to "double down on commodities". I was wrong. Congrats to everyone who played it right, including the major pension funds like Calpers, who were highlighted in Bloomberg's recent article.
Whether or not the index players will be able to outperform the leading commodity hedge funds over the longer term is another issue, and it is one that is taken up in Bloomberg's piece.
Still, you have to give it to Jim Rogers and those who predicted the rise of commodity index investing and investors' growing acceptance of these products. They were absolutely right, and the market for these investment products is still growing.
Just last Friday, the Financial Times reported that JP Morgan and BNP Paribas were developing commodity index vehicles that will allow investors to make longer-term bets on commodity prices movements.
It was also noted that S&P had forecast a 20 percent increase in commodities index investment for 2008. Commodity investing has gone mainstream.
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© 2007 David Shvartsman
Editorial Archive
URANIUM WARSby Sol PalhaWe have spoken several times in regards to this issue over the course of the last few years. China has already lead the assault on a covert basis but soon they will move to an overt basis and now India will be forced to join them not because they think they might have to but because they desperately need too. The excerpt below will explain our point quite clearly
Tactical Investor
November 14, 2007
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When I was a boy I used to do what my father wanted. Now I have to do what
my boy wants. My problem is: When am I going to do what I want?Samuel Levenson
Faced with an acute shortage of uranium to run existing power stations, the Nuclear Power Corporation of India Ltd has advanced its maintenance schedule and started shutting down individual power units. Usually, these units are shut down in a staggered manner but this time they have been bunched together so that authorities get time to arrange for uranium supplies.
Over the past few weeks, as many as five units amounting to 1000 MW of the total 4000 MW were shut down on account of upkeep of plants: two units from Tarapur (Maharashtra) and one each from Kaiga (Karnataka), Kalpakkam (Tamil Nadu) and Kakrapar (Gujarat).
Already, most of the plants that were running at 90-95 per cent capacity until last year are now down to 50-70 per cent reflecting the serious uranium crisis facing the country.
Acknowledging that there is a fuel supply "mismatch" due to further delays in the commissioning of the milling system in Jharkhand mines, one of the main sources of domestic fuel supply, authorities are having to innovate on their maintenance schedule. Hoping that the fuel situation may ease a bit in the next month or so, sources said, the NPCIL felt that this period could be used for maintenance which anyhow requires shutting down a reactor for about 20 days. Full Story
Now just imagine a country such as France had to go through the same situation; total chaos would reign as 80% of France's electricity comes from nuclear power plants. We are not stating that France is in any danger we are just trying to illustrate a point here. For that matter imagine the US had to go through the same situation it would still cause chaos as over 20% of our electricity is generated from nuclear power plants. Actually one has to applaud the French for being so astute as to have had the foresight to continue to develop nuclear technology and move away from coal and natural gas; today the French are one of the leaders in Nuclear power plant technology a position once held by the United States.Known Recoverable Resources of UraniumAustraliaTonnes U% of world
1,143,000
24%
Kazakhstan
816,000
17%
Canada
444,000
9%
USA
342,000
7%
South Africa
341,000
7%
Namibia
282,000
6%
Brazil
279,000
6%
Niger
225,000
5%
Russian Fed.
172,000
4%
Uzbekistan
116,000
2%
Ukraine
90,000
2%
Jordan
79,000
2%
India
67,000
1%
China
60,000
1%
Other
287,000
6%
World total
4,743,000
We are at the beginning stages of a massive bidding war in Uranium. China is locking in massive deals in Africa and is now working on ever bigger deals in Kazakhstan which holds the worlds second largest reserves of Uranium after Australia. Note to that China signed a multi billion dollar uranium deal with Australia. China is basically locking up Uranium supplies, which means its taking this uranium out of the market place; this effectively means that there will be even less uranium for the rest of the global world players to go after. Now this development alone is bad enough but the situation worsens; Russia which has more than enough uranium has decided to start stock piling on uranium too. They have done this after declaring that Uranium is now a strategic resource and will only be exported in limited quantities. Once again the following news story will best illustrate our point
"This new agreement will allow the supply of Australian uranium for use in Russia's civil nuclear power industry and provide a framework for broader cooperation on peaceful nuclear-related activities," he said. Both Howard and Putin dismissed concerns that Russia would sell Australian uranium to third countries such as Iran.
"I simply don't understand what people are talking about," Putin said, pointing out that Russia already exports large quantities of enriched uranium for military use, including 30 tonnes a year to the United States. "We are buying uranium from Australia for purely economic reasons," he said Full Story
Purely economic reasons and why not; Putin is a smart man he knows that in the future nations will be desperately begging for this valuable commodity and he also knows that he who controls the keys to the energy market controls the world. One other thing to note here is that Russia supplies the US with over 30 tonnes a year of uranium; Russia could cut these supplies on a moments notice especially now that the relationship between these two former cold war enemies has turned rather frosty as of late.
Bottom line is the Uranium bull is one that is going to be driven by the two most powerful forces in the universe and such a development is very rare and provides the astute investor with a window of opportunity that usually presents itself only once in a persons life time. The two forces are fear and greed; usually one of them is enough to produce massive moves but in the near future both of them will be working in unison instead of against each other. This is one of the main reasons why it’s almost impossible to predict how high uranium prices could eventually trade at. Right now the uranium sector has been beaten down and many individuals have given up on this sector as some stocks have truly taken a massive beating. Remember at TI we view disaster as opportunity waiting to be discovered and thus our advice to all our subscribers is to make sure you hold positions in all the various uranium plays that are listed in our portfolios and hold them through thick and thin or until we advise you to unload them. Those that do so will be handsomely rewarded and those that don’t well in the years to come they will most likely shed tears of blood as they wonder what possessed them to let such a wonderful opportunity pass them by. Do not let this opportunity slip by you.
Futures players with deep pockets could start examining the possibility of going long Uranium futures; do so with the mindset that the next leg up will not begin tomorrow.
Who then is free? The wise man who can govern himself.Horace BC 65-8, Italian Poethttp://www.financialsense.com/images/icons/storyend.gif
© 2007 Sol Palha, Tactical Investor
Bio and Archive
Why Commodities Should Be In Your Stocking This Year....For several years now, commodities have garnered attention because of their prolific appreciation. The price of oil has climbed by over $80/barrel during this first stage of this bull market, gold prices have more than tripled in price, and soybeans, corn, wheat and coal have suddenly become part of the investor's vocabulary. At the same time, however, it seems that while investors are now more familiar with commodities (in the general sense), they are still apprehensive about finally taking the steps to add commodities to their investment portfolios. The reasons vary, but it has a lot to do with the fact that most investors focus on the fact that prices are too high (gold at $800/ounce, for instance). As a result, the average investor feels more comfortable waiting for the next bull market in commodities, rather than being the fool that buys in at the "top".
...and the next year....and the year after that!
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Emanuel Balarie
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Interestingly enough, not only is it not too late to invest in the commodity bull market, but it is also perhaps one of the best times to start investing. In this article, I will not list the fundamentals for why I believe we are still in the first half of this commodity bull market. I have written about this topic on various occasions, and I write about it in detail in my new book, Commodities for Every Portfolio: How You Can Profit from the Long-Term Commodity Boom. I recommend buying this as a Christmas gift for yourself or your skeptic friend! Instead, I will make the case for why I believe this is probably the best time (since the start of this bull market in 2001) to actually allocate a portion of your portfolio to the commodity markets.
The Last Seven Years
I fully realize that most people will initially scoff at my belief that now is a much better (and critical) time to buy commodities. How could I possibly believe that buying gold today( when it is trading at $800/ounce) is better than buying gold seven years ago (when it was trading around $250/ounce)? Or how could I argue that oil at $90/barrel is a better investment than oil at $15/barrel? Indeed, if one were to look simply at the price of commodities, my argument would not make sense. However, if you look at the bigger picture, it becomes clear that investing in the second leg of this bull market is much more important.
Consider, for instance, the potential investments (and their returns) of the previous seven years. There is no question that the commodity markets have tallied significant gains. But so have other investments. For instance, while commodity bulls point the gains they made investing in the energy sector, real estate investors can readily point to the appreciation that they experienced by investing in housing. While gold bugs boast about the massive gains that they accumulated by buying gold at $300/ounce, stock market investors simply point at the fact that Google has moved from just over $100 in 2004 to over $700 today.
Indeed, it is clear that those that have missed the "boat" during this first stage of this bull market have had ample opportunity to ride other crafts to financial gains. In a sense, the financial opportunities of this decade have been ample and widespread. However, this unprecedented and goldilocks scenario is clearly coming to a screeching halt. As a result, investors can no longer afford to ignore the benefits of holding commodities in their portfolio.
The Next Several Years
The economic environment of tomorrow paints a picture that is polar opposite to what has transpired in the previous years. Whereas investors were able to profit from real estate gains (via the real-estate bubble), they are now realizing losses (via the real-estate burst). Whereas investors were able to profit from a rising stock market (due to consumer spending), the housing decline and upcoming recession will inevitably result in a bear market in stocks. And while the skewed and archaic fed data (think: the core CPI) has failed to warn investors about inflationary pressures, the massive printing of money to finance the war in Iraq, Afghanistan, and other government expenditures will undoubtedly lead to inflationary pressures that will erode the wealth of many investors.
In short, the benefits of commodities can serve as a remedy for the problems of tomorrow. While I have always espoused the profitable reasons for investing in commodities, I believe it is now more a question of protecting your wealth. In other words, the intrinsic benefits of holding commodities in your typical stock and bond portfolio far out way the potential gains you might see. Now don't get me wrong. I still believe commodity prices will soar for another decade or so, but if you are concerned about inflation, a bear market in stocks, and the inevitable recession-commodities make sense.
Why Commodities Belong In Your Stocking
So why exactly do commodities still make sense? And why do they belong in your stocking? Well consider the following study conducted by a couple professors and the gifts (or benefits) that commodities provide investors this holiday season.
In 2004, Professor Gary Gorton of University of Pennsylvania and K. Geert Rouwenhorst of Yale School of Management published "Facts and Fantasies about Commodity Futures". In the study, the two professors examined the long-term relationships of these three different asset classes. Their results were groundbreaking on a number of levels. First, the study shattered several ongoing myths about commodity futures. One of these myths was simply that commodities are more volatile than stocks. Looking back over a period of 45 years, the professors found the opposite to be true; the risk premium for stocks was greater than that for commodities.
Gift #1: Commodities provide investors with a hedge against a bear market in stocks.
In addition to debunking several myths about commodities, Gorton and Rouwenhorst concluded that over a prolonged period of time, commodity futures were negatively correlated to stocks and bonds. This, of course, makes perfect sense. Consider for example the effects higher commodity prices have on companies. As the price of commodities rise, companies have to pay more to make those products. In turn, they will have to pass on those costs to the consumer. Since the price of the product is now more expensive, not as many consumers will buy the product. The end result is lower earnings, and lower stock price.
Gift #2: Commodities provide investors with a hedge against rising inflation.
In addition to commodities being negatively correlated to stocks (and thus serving as a hedge against a bear market in stocks), the study as mentioned that commodity futures were positively correlated with inflation. In other words, commodity prices increase with rising inflation and decrease with declining inflation. Again, this makes perfect sense. Throughout the 1980's and early 90's, a period of low inflation, commodity prices were in a decline. Today, commodity prices are increasing in the midst of rising inflation. For instance, as the price of corn, soybeans, and other food products rise in price, you will have now have to pay more for your food products (See Food Inflation Article). While rising inflation erodes the purchasing power of your dollar (and subsequently diminishes your wealth), investing some of your wealth in tangible real assets can counteract the inflationary pressures.
Gift # 3: Commodities provide investors with the opportunity to profit from the greatest generational bull market of our time.
Of course, commodities can still provide investors with the opportunity to profit from the greatest generation bull market of our time. While there might be pullbacks and consolidation along this bull ride, the sheer demand for commodities from China, India, and other emerging economies will continue to push commodity prices higher. Additionally, while many investors continue to focus on how high commodities prices have risen over the last 7 years, they fail to realize that commodity prices were in a bear market for the previous 20 years. And if you look back at the history of commodity bull markets, they have all lasted longer than 15 years.
It is becoming evident that commodities should have a place in an investors' portfolio. It is no longer simply a matter of whether or not you believe that we are in a bull market or a bubble, but it is a matter of properly diversifying your investments. While diversification might not seem as important when most every investment is going up, it becomes increasingly important during times of economic uncertainty. Hopefully this Christmas Santa will bring you some coal….or oil…or gold. Personally, I prefer gold.
Stay tuned for the official launch of www.commoditynewscenter.com in early 2008. With commodity news, pertinent commentary, quotes, and trading tools, CNC is poised to become your home for commodities online. I will also be launching a daily blog and send my subscribers a free report on which commodities to own…and not own…in 2008!
If you are interested in receiving this report... You can sign up for a free newsletter here.
Emanuel Balarie
Chief Executive Officer
JABEZ CAPITAL MANAGEMENT
Chicago Mercantile Exchange
30 South Wacker Drive, Suite 2200
Chicago, IL 60606
Cell:949-697-3626
Tele: 312-466-5561
Fax: 312-466-5601
ENERGY SECTOR TRENDS & DEVELOPMENTS LAST MONTHby Joseph Dancy, LSGI Advisors, Inc.http://www.financialsense.com/fsu/ed...s/1217a.31.jpgWhile we did not see $100 a barrel crude oil in the futures market last month we remain bullish on the energy sector. One of the more interesting charts we happened across last month was from the Oil Drum. It plots global crude oil and natural gas liquid production versus time. (See chart at right)
Adjunct Professor, SMU School of Law
December 17, 2007
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Texas oilman and hedge fund manager T. Boone Pickens for well over a year now has questioned whether global production of crude oil liquids can exceed 86 million barrels per day. Many analysts disputed his analysis, claiming production could be increased well above the 86 million barrel per day level as new supplies were brought online and older fields were upgraded.
While not making a judgment whether Mr. Pickens is correct or not, the chart at right is quite interesting in light of his comments. Keep in mind global demand for crude oil has been increasing about 1.5 million barrels per day per year with global demand for petroleum liquids correlating very closely with economic growth.
Many countries have experienced robust economic growth and are placing their increasing demands for energy on the global marketplace. Developing countries generally have very energy inefficient economies that require much more energy input per unit of growth than in North America. Should demand for crude oil liquids approach or exceed available supplies prices could skyrocket. The global market players most likely would in that situation move toward a hoarding mentality and resource nationalization would become a larger issue for consumers.
http://www.financialsense.com/fsu/ed...s/1217a.32.jpgAnother interesting chart we ran across last month plotted the oil inventory levels of Organization for Economic Cooperation and Development member nations over the last year and a half and the projected levels going forward.
OECD is comprised of thirty member democratic countries that produce two thirds of the world’s goods and services. Its member countries are primarily located in Western and Eastern Europe, but also include the United States, Canada and Mexico.
The forecast, provided by the Energy Information Administration, indicates that while oil stocks have been well above the 5 year average over the last few years those excess stocks are falling rapidly. In the near future OECD stocks are projected to be below the five year average while OECD demand continues to increase.
Excess inventories are helpful in addressing temporary supply interruptions and keeping the associated price fluctuations to a minimum. On a days of forward demand basis OECD inventories are down 5% from year earlier levels and are expected to fall further - which should keep short term oil prices firm.
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http://www.financialsense.com/fsu/ed...s/1217a.36.jpgMeanwhile, in the United States gasoline inventories have fallen below their long term average. This trend has been reflected in strengthening gasoline prices over the last several months. The long term trend in gasoline prices remains upward.
One of the more interesting articles and charts we can cross last month was in a New York Times article on the comparative value of crude oil and natural gas. (See chart at right)
Due to the fact that domestic natural gas inventories have been at or near five year highs for much of the last year natural gas prices have not risen as much as crude oil prices.
The impact of soft natural gas prices on North American drilling and completion activities has been quite evident – and is one reason the drilling day rates have been well below levels many small drilling companies and equipment providers expected.
Even with the large amount of natural gas in North American storage, and even though many long term forecasts project that winter temperatures will be well above normal cutting into demand, we think that over the next 12-18 months natural gas prices will advance from current levels.
On a heating content basis natural gas is now selling at roughly one-half the value of crude oil.
http://www.financialsense.com/fsu/ed...s/1217a.37.jpgLast, a slide from investment banker Matthew Simmons is worth reviewing. While the U.S. economy is much more energy efficient than it was 40 years ago demand for crude oil continues to increase. (See chart at left)
The demand for oil in countries such as China is rocketing upward, a function of the incredible economic growth of that country and also a function of the fact that the Chinese economy is not as energy efficient as those in North America or Europe.
Going forward, with the increasing auto sales and urbanization of that country demand for oil should continue to accelerate – which will place additional strains on the global supply network for decades to come.
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© 2007 Joseph Dancy
Editorial Archive
All green on the screen again tonight for metal prices, including zinc up 2%. $A off its recent highs as well.
Over the last week or so, metal prices have generally been heading higher, despite all the references to the 'R' word being bandied about.
However, the share prices of many miners have moved downwards, ignoring the small but welcome improvements in metal prices, but in sinc with all the talk of recession. PEM and ZFX being two zinc plays being badly mauled.
Will be interesting to see what the next few weeks brings.
It's stocks that are taking a beating at the moment - not commodities. Commodity related stocks are being dragged down by falling stock markets but I doubt whether this positive correlation between general stocks and commodity related stocks will last much longer.
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How Do Commodities and Stocks Perform
During Economic Downturns?
by Mary Rivas, PowerPathtoMoney.com | January 25, 2008
In an article published January 23, 2008 in the Financial Times, George Soros stated that a recession in the U.S. is now more or less inevitable. He noted that China, India and some of the oil-producing countries however are in a very strong countertrend. Soros went on to explain that “the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the U.S. and the rise of China and other countries in the developing world. “
A growing number of economists, money managers and analysts have begun issuing warnings that a recession may be hard to avoid in 2008. On top of that, recent data is indicating an increase in inflation that is being fueled by higher prices for commodities such as oil, wheat and corn.
Given the growing concerns of the future of the economy, I thought it would be extremely helpful to provide readers with some history on how commodities and stocks have performed over various economic cycles.
Performance of Commodities vs. Stocks
To understand how commodities and stocks perform during economic downturns, let’s look at past trends.
In a revolutionary study from the Yale School of Management’s Center for International Finance entitled Facts and Fantasies About Commodity Futures, research revealed very important differences in how commodities and stocks perform over time. The research team analyzed how commodity investments performed compared to stocks and bonds over the last half century.
Below are some key highlights of the research findings over various investment horizons:
While no one can be certain if the looming recession will be global or more or less confined to the developed world, one thing is clear: ignoring commodities in a declining stock market is irrational.
- Stocks and bonds are negatively correlated with inflation. In other words, as inflation increases, stocks and bonds tend to move in the opposite direction. Commodities futures, in contrast, are positively correlated with inflation. When inflation rises, commodity futures tend to rise as well.
- Commodity prices can rise even during economic downturns. Commodities can serve as a hedge against stock market and economic risk.
- Commodities and stocks have a negative correlation. In other words, commodities and stock perform tend to perform oppositely over time. When stocks go down, commodities, over time, tend to move up and vice versa. Thus, a portfolio invested in stocks and commodities, is likely to experience less volatility than a portfolio that is comprised of only stocks.
- From 1959 to 2004, commodities futures produced comparable annual returns to stocks and greatly outperformed bonds.
- Commodities have had less risk than stocks over time. The volatility (i.e., fluctuations in portfolio returns) of the returns of commodities futures over a 43-year period was less than the volatility of the S&P 500 index over the same period.
In a recent interview with Bloomberg (January 7, 2008), Jim Rogers, known by many as the world’s expert on commodities investing, reaffirmed his positive outlook on commodities. He stated that ``All commodities are going to be in much shorter supply for another decade.'' Rogers indicated that in the event of a global recession, agricultural commodities may be the best investment among commodities.
The findings of the Yale study and others have triggered huge changes in the financial industry---many which affect you. Investment companies are increasingly creating new investment vehicles to enable individual investors to participate in commodity investing. Today there are easily accessible ways for you to invest in commodities and to find which investment vehicle is right for you. Anyone can now invest in commodities in low-cost and easy ways that were not available during the last commodity bull market.
Possibly some positive news on the zinc front.
http://www.platts.com/Metals/News/93...ined&undefined
Mick/All,
Was reading this w/end (Saturday's Aust) some hedge funds coming into Aust with the view to possibly shorting commodities. Are they able to do this with same degree of effectiveness as what they've done say to ABC Learning etc. They don't have to come to Aust I suppose to do this, as these are traded on LME
What's your opinion on near term commoditiy prices - some sources are saying big falls expected, others that they'll remain strong. Particularly Nickel
A possible head and shoulders pattern forming on BHP.
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I think any weakness in metal prices will be short lived, 6 months, then showing strength again towards the end of the year. Inventories are still low so I don't expect a big decline in prices.
I suggest you keep an eye on copper. Copper usually leads the way with the metals. It looked as though it had broken out of a long consolidation a couple of weeks ago but has since fallen back a bit
I,v closed out all my metal positions in my commodities account and only have open positions in oil, corn, sugar and live cattle. I'm more bullish on food and energy than metals at this moment
Futures Commentary and Analysis
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$125 Next...
Friday, April 18, 2008
by Mark Pasek of Ira Epstein & Company
As published on InsideFutures.com
ENERGY MARKET NEWSLETTERApril 17, 2008In case you have been living under a rock, or just haven't filled up your SUV in the last 24 hours, Crude Oil traded above our $115 price target, which provided RBOB with the momentum to break through the $2.775 resistance level I detailed out last week.
So what happened?
More bad economic news. Partly. Poor first quarter earnings. Not so much. A feeble attempt by the G7 to balance the currencies. Probably the most likely.
First , the economic news. You and I know the real state of the economy is usually worse than data that is reported to us. You and I don't need understated employment figures to tell us that the job market is drying up. You and I don't need understated CPI and PPI numbers to feel the effects of inflation, we simply fill up our gas tanks and drive to the grocery store. And you and I are smart enough to know that the FED has not solved the problem nor will the problem be ending any time soon. Therefore, you and I know that when the FED expands the M3 money supply and subsequently stops reporting the M3 money supply data, that the resulting inflation will take a very long time to fully materialize in the markets. Since monetary expansion leads to price inflation, let us not be too surprised that Crude Oil is making new highs.
Next, lets deal with first quarter earnings. All is not well. Pay no attention to the Talking Heads reacting to lower earnings as "better than expected;" earnings will continue to suffer as higher energy prices inflate costs. But higher energy costs are only the beginning. Rising food prices are now starting to work their way into the mix. I don't see corporate earnings increasing in the short term. Where would you like to place your investment dollar during a rising inflationary period and stagnant corporate earnings?
And finally, the attempt by the G7 last weekend to bring the currencies into balance was in my opinion, a complete waste of time. There is a very real and significant interest rate differential between the United States and the European Union. Whereas the U.S. Central Bank's policy is to lower interest rates and to inject unprecedented amounts of liquidity into our system, the European central bank's policy is that they will not lower rates and they will actually fight inflation with higher interest rates.
With poor economic data, a not-so-rosy outlook on future corporate earnings, and the FED's current monetary policy I cannot figure out how the US Dollar is even trading in the 70's! There is nothing dollar-positive about anything I mentioned here. The interest rate differential between the US and Euroland, by itself, is enough to sink the Dollar. Keep in mind that there is an unlimited number of Dollars that will be trying to buy a limited number of commodities.
I think we are looking at the beginning of the next short term run-up in commodity prices. (I am also expecting a corresponding retracement/pullback/profit-taking to follow, who cares what you call it.)
EIA Inventories
To view the EIA's Weekly Petroleum Status report, click here: http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt.
Crude Oil
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Crude Oil established a new record high at $115.54 today, after breaking through the $115 level on Wednesday. If Crude Oil holds on to this gain I think the new range will move up to $115 and $125. I also think a break to the upside in all of the commodities will be starting.
Stochastics are embedded as Crude Oil trades to new record prices. I see $125 as the next upper level resistance.
May RBOB
May RBOB has broken though massive resistance at the $2.75-$2.775 level (Light Blue Dashed Line), which will now be a technical support level. It is free and clear, and I regret to inform you that $4.00 per gallon at the pump might be in the very near future.
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RBOB is free and clear of both the 18 and 45 day moving averages and Stochastics are embedded. As I mentioned last week, now that Crude Oil has broken $115 RBOB it is free to make new highs. I will not even speculate on how high this can go. However, look for RBOB to pull back to the $2.77 level on a retracement. $2.77 just happens to be the 18 Day Moving Average (in Red) and what used to be the resistance should now be the support.
Call me to discuss, 800-284-1065 or markp@iepstein.com.
Good Luck and Good Trading,
Decision Time For Gold And The Dollarh2 { color:#008000; } h4 { font-weight:normal; }It’s rather amazing that despite the firm rise in Gold and Silver these past few weeks, the mining stocks aren’t moving at all. Well, that’s not entirely true. The mining stocks do tend to move at times, only in the opposite direction! Needless to say, this is incredibly frustrating to all gold and silver bugs.
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Roy Martens
www.resourcefortunes.com
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Mining stocks appear to be moving in sympathy with the major equities markets. Although we have seen this before, it’s still amazing to see the holders of mining stocks lose faith so easily. Eventually, buyers of quality mining companies at today’s bargain prices will be handsomely rewarded.
All charts are courtesy of Stockcharts.com
GOLD
http://www.gold-eagle.com/editorials...ens070808a.gif
The chart for gold is improving and it looks like we are in for a new jump higher very soon.
Although the presented EW count hasn’t been confirmed yet (we need a rise above the black B), the conditions for a move higher are getting better and better. The 14 and 50 d. MAs are starting to rise, indicating that the LT trend is turning positive again, and as long as Gold remains above them the expectation of a breakout to new highs is valid.
The MACD is telling us that this move higher has legs to stand on, and once Gold takes out the resistance zone around $960, we can expect a strong advance to higher levels.
SILVER
http://www.gold-eagle.com/editorials...ens070808b.gif
Silver seems to be in the process of rounding up a bottoming pattern. This pattern will be completed once Silver breaks above the resistance at $18.60.
The conditions in the charts are getting ready for a big move higher, with the RSI, DMI (Buying Power) and MACD all in perfect shape to support a breakout above the nearby resistance zone. With Silver now just below the resistance level, not much is needed to trigger the rise. The bulls will only have to push Silver a little bit more for things to really start moving.
Above the resistance at $18.60 there are no real resistance levels to hold the price back except the double top made in March around $21.00. Therefore, it is reasonable to expect a similar rise like the one experienced at the beginning of 2008 when the resistance at $16.00 was taken out.
OIL
http://www.gold-eagle.com/editorials...ens070808c.gif
This chart is telling the whole story. Words are hardly necessary!
The strength in Oil is amazing. Every tiny sign of weakness attracts more and more buyers causing the price to rise higher and higher. Although this can’t be sustained forever, for now we must look at the yellow channel to get some clues for the next targets. As long as the channel remains valid, we should just go with the flow.
For now, the target at the higher end of the channel is $150+ and at the lower end, $135. However, keep in mind that these targets are rising daily along with the advancing channel lines.
USD
http://www.gold-eagle.com/editorials...ens070808d.gif
The dollar is at a crucial stage. It has to choose which way it will go very soon.
The support at 72 has to be defended or else the positive sentiment will fade very quickly. Should the dollar manage to take out the magenta line and the MA’s, we will get the prolonged rise that was anticipated last month.
For now, the signals in the chart are mixed. Things can still go either way, so we have to wait and see what the dollar has in store for us. The epic struggle between the dollar bears and bulls is in full force once again.
COPPER
http://www.gold-eagle.com/editorials...ens070808e.gif
Copper put in a very powerful rise this past month, and is now back up at the $400 level. Although the technical conditions are a bit overheated, it looks that this time the resistance could be taken out very quickly. While we may experience a minor correction first, the move higher was so powerful that Copper could simply blast through the resistance this coming week without any sort of breather.
The presented EW count suggests that this is only the first wave 5 higher, meaning that we should expect even more dramatic price increases going forward.
8 July 2008
Roy Martens
Chief Technical Analyst
Resource Fortunes LLC
Email rmartens@resourcefortunes.com
Web http://www.resourcefortunes.com/
The above is an excerpt from the technical analysis portion of the monthly Resource Fortunes Premium Newsletter publication, available in its entirety for subscribers at http://www.resourcefortunes.com/. We currently offer a 30-day trial subscription for $2.99.
a good read on where we are at in the bear market
http://www.gold-eagle.com/gold_diges...ton071808.html
Interesting read, Mick - he doesn't mention (as far as I can see) that calcluating ratios using earnings from the previous bull run is a fraught exercise. Obviously earnings in a booming economy are going to be more than those in ones that are busting. Buying stocks on the basis of what happened last year is obviously wrong headed - I think he is quite correct to infer that the bear market will be with us for some time and that at best indexes like the Dow will be trading sideways for some time. TBH I can't see this thing being over and done with for some years yet.
Obviously, I have an issue with him claiming that commodities will continue a bull run, but I've been over that ground before on here, so won't go back over it again.
A most welcome jump in metals this evening. Wouldn't it be nice if we could string together gains like this for a few days or weeks :rolleyes:.
http://www.kitcometals.com/
Nearly 25% of US fuel production shuts down
http://money.cnn.com/2008/09/12/news...ce=yahoo_quote
Gold, Silver, Oil, Copper, USD:Last Month has been a very good one for the Gold and especially the Silver community, both prices went up nicely. Silver registered its biggest monthly gain since 1987, rising by 27%.
End of the Run or Just the Beginning?
http://www.gold-eagle.com/images/clear.gif
Roy Martens
www.resourcefortunes.com
3 June 2009
http://www.gold-eagle.com/images/clear.gif
It looks like more and more people are beginning to see the light. Although most of the gains are said to be explained by the recent fall of the dollar, this is not entirely the case. Gold is also rising in other currencies, albeit at a more modest pace. Nonetheless it is rising. The inverse relationship between the Dollar and Gold is still an important factor to keep in mind but we have to look at it with a broader perspective.
More and more institutions and Central Banks have increasingly shown interest in adding Gold to their reserves, not only as a safe haven for the falling greenback but also as a hedge against future inflation expectations. This interest will be a driving force behind the future rise of Gold in all currencies and makes it one of the safest investments for the coming decades.
As far as the "poor man's Gold" (Silver) is concerned, last month has shown the enormous potential that investing in Silver presents versus Gold. While Gold rose by almost 10% last month, Silver added 27 percent. Will Silver keep outperforming Gold? I think so, because Silver doesn't only have a correlation with Gold as a safe haven, it is also used as an industrial commodity.
Roy Martens
The outlook for Gold is very promising. The breakout from the flag pattern and the possible reversed Head and Shoulders pattern paint a very rosy picture for the upcoming month.
The "only" hurdle that could spoil this positive outlook is a potential double top around the $1,000 mark. We can expect some resistance at this level because it is the last chance for the bears to launch a significant counter attack, there last line of defense so to speak.
A break to new highs will invite more investors to join the party and will thus trigger a new flow of fresh money to push Gold higher. The technical conditions are all set and ready to go. We are in for an interesting month.
Like Gold, Silver performed very well last month.
The break above the resistance line at $14.50 is a very important move. It signals that a wave 3 (or at least C) is underway with a price target between $17 and $18.
The readings in the chart suggest that this breakout will have some decent follow-through with fresh buy signals in the RSI, DMI (buying power) and the MACD.
The readings from the MACD are an especially good indication that the current weekly trend is very positive. The MACD successfully retested the 0 line and bounced higher, indicating that the long correction from the high at $21 is definitely behind us.
Oil experienced some difficulty breaking through the resistance, now support zone, just below $60. But last week it pushed higher with a 7.5% gain.
The chart is still improving, and if Oil consolidates within the current rise we will witness an important new Long Term buy signal, a positive cross between the 17 and 34 w. MA. The last time this cross occurred (May/June 2007) it signalled the start of a huge rally, from $65 to over $140. If history is any sort of guide, oil could be in for a nice rise.
The conditions in the chart are quite similar to this last positive crossing so let's sit back and see what is in store for us these upcoming months.
Finally the $ chart broke down. As was expected, once the $ fell below the 34 w. MA, the 82 level couldn't act as support and it was all downhill from there. This could just be the beginning of a much bigger fall. Unless the bulls can stop this decline very soon we expect the $ to breach the blue support lines with force.
The chart is turning negative at a rapid pace with sell signals in the RSI, the DMI (Selling power) and the MACD indicators. An upcoming negative crossing of the 17 with the 34 w. MA will add more negative sentiment to the picture. For reference, just look at what happened the last time we got such a crossing in April 2006!!
The positive outlook for Copper remains alive, although it still has some heavy overhanging resistance to take out. The current pattern suggests that a wave 5 is still yet to being. This wave should take Copper to levels above the resistance zone, thus triggering new buy signals.
The technical implications are in favour of such a rise. They are all in perfect positions to support a powerful wave higher.
This bounce in the dollar should be stopped at the 200 day MA at 83-84
http://www.gold-eagle.com/editorials...und060709c.gif
A thought provoking article on why commodity prices are firming.
http://www.thebull.com.au/articles_detail.php?id=3706
Lead hits 90c lb, despite talk of large Chinese stockpiles (on top of the LME ones) and falling sales of 'e bikes' in China.
Important news for those interested in coking coal stocks.
http://www.theaustralian.com.au/busi...-1225837963269
Why It’s Time to Invest in Commodities, and How to Do It
https://archive.fo/q3NXg
Check out @graddhybpc on Twitter, you don't need to join it to view lots of really interesting posts. He's a big commodities bull and has a great track record with long-term trends.
https://www.smh.com.au/business/comp...16-p59oj7.html
"Mining companies are struggling to find workers to fill specialist roles from engineers to train drivers as COVID-19 travel restrictions between states and
a collapse in skilled migration exacerbate the industry’s labour squeeze.
While mining job numbers have swelled by almost 22,000 in the past 12 months, a shortage of specialist workers has forced companies to lower production
targets and now threatens to complicate the sector’s expansion just as the clean-energy revolution drives greater demand for a range of Australian metals.
In Western Australia, the world’s biggest iron ore and lithium-mining region, ongoing coronavirus-related border restrictions have reduced mobility of fly-in,
fly-out staff between states. At the same time, miners are having to compete harder for skilled workers amid a government-backed construction boom on the east coast.
“We expect labour market tightness and competition for skills to increase in 2022.”
Rio Tinto, the nation’s second-largest miner, last year cited “modest delays” in commissioning new greenfield mines and mine-expansion projects due to WA’s tight
labour market as the reason for trimming its full-year target for shipments of iron ore."
https://www.smh.com.au/business/comp...17-p59ozh.html
"Mining giant Rio Tinto has reported a drop in its yearly shipments of iron ore, the nation’s most valuable export, after a labour squeeze in Western Australia and
pandemic-related supply chain disruptions delayed the commissioning of new resources projects last year.
Rio Tinto, the top producer of the key steel-making raw material, told investors on Tuesday it had shipped 84.1 million tonnes of ore from its Pilbara operations
in the December quarter, in line with its target and analysts’ expectations, but 5 per cent lower than the same time in 2020.
The result brings Rio Tinto’s total shipments of iron ore last year to 321.6 million tonne, down 3 per cent from the year before.
Rio Tinto chief executive Jakob Stausholm said operating conditions remained “challenging” including due to prolonged pandemic-related disruptions across its
operations."
Yes and this is why I sold out of the likes of OBM and haven’t been investing much in start up miners in Aus (outside WWI but as located in SA close to major city shouldn’t be as bad )
risks around securing staff and retaining with skills I understand nightmare in Aus esp...
When it comes to producers I’m liking the O&G sector CUE kicking on today should yet again report a great revenue for DEC Qty
Nice bump to coal miners in Oz. Makes me wonder how long it'll go for.
Also, I note that there are noises from other countries in EU for Oz coal. Good times ahead?
https://www.mining.com/web/commoditi...s-super-cycle/
Sobokta believes a fossil fuel resurgence is temporary, and the transition to a lower carbon economy “cannot be stopped,” which will require a projected $50 trillion in the next three decades.
“Anything between $200-$300 billion in investment per year will be required for the mining industry to satisfy demand for the energy transition,” he said, with much of this invested into the mining of copper, nickel, cobalt and other metals.
In an environment of high prices and supply chain pressures, Sobokta expects companies and countries to stockpile strategic raw materials, including oil, copper, cobalt and other metals.
“If you get small supply disruptions, you are going to see big swings in prices,” Sobokta said, adding that he expected to see an impact in the second half of 2022.
Commodities setting up too boom higher
https://twitter.com/MrBreakouts/stat...0zIdug2Fy18hmg
Japan signs highest ever coal supply deal ever!!
https://oilprice.com/Latest-Energy-N...-Ever.amp.html
Been buying into the smashed AHQ of late 11.5c ...high risk ...but with markets trending north + higher coal prices = bounce in the SP I hope
Looks like the company was under-capitalised and unable to fund the equipment and works needed to properly operate its current mines and had some staffing issues ..
Strategic Review
The Company has been unable to successfully ramp up production to previous expectations at its two
operating mines. In addition, the Company has been unable to secure medium term equipment financing at
both Black Warrior and New Elk, which has driven lower than expected performance. In light of the lack of
available financing, the Company is considering different capital initiatives to fund equipment acquisition and
upgrades at both mines.
Legacy coal sales contracts at New Elk, coupled with production constraints, staffing issues and poor logistics
performance in transporting coal to port, have meant that the mine is running at an operating cash flow loss
which has significantly constrained cash flows.
It is currently unclear if Black Warrior or New Elk have the capability to meet, within a material margin,
previously advised target production rates. As such the Board has made the decision to commence a strategic
review. The outcome of the strategic review is expected before the end of August 2022.
After this ann... AHQ dropped from 56c to 18c ...now 11.5c
Personally I think Coal prices will keep high for sometime and AHQ will get through these issues ... HIGH risk HIGH return..
https://www.iea.org/news/global-coal...e-high-in-2022
https://www.bloomberg.com/news/artic...lready-surging
Thanks for the reply JBMurc. Not for the faint hearted then.....as you say high risk, high reward.
Yes its one trade I'm keeping a very close eye on ...latest Analyst report. 32c target.. I think AHQ has many options maybe even selling off a project ..raising capital ..
Good developments And I'd certainly be doubling my position ...
Allegiance Coal Limited (AHQ) - Pending strategic review Production and operating costs continue to lag budgeted figures and AHQ has commenced a Strategic Review, expected to be completed in August. To provide interim funding, AHQ has established a A$5M facility with Regal Funds Management. This facility provides breathing room whilst new mine plans are established.
Pending increased certainty post the review, we have significantly reduced our assumed ramp-up at New Elk. Despite this, value is still apparent, primarily at Black Warrior, and we back the new MD to deliver an achievable plan. Maintain Buy, TP reduced to A$0.32/share (prev. A$1.22/sh).Another quarterly missWhile volumes are trending in the right direction, AHQ delivered another big quarterly miss in Jun.Q’22 (Fig. 1).Critically, we did not see the scale of improved production that was needed.
Pending the outcome of the Strategic Review, we have reduced our ultimate scale to 0.3mtpa (sales) at New Elk and 0.5mtpa (sales) at Black Warrior, with development of Short Creek deferred to FY25 (from FY23).A lost year, multiple issues now impacting AHQMultiple issues are affecting both production and sales, with staffing, underground roof conditions, equipment availability/reliability, and lack of equipment finance all impacting production rates, and staffing issues within the rail provider impacting exports.
With thermal coal now achieving record prices, the company is looking to supply into the highly priced ARA Rotterdam thermal market. US High Vol Met is well suited to thermal coal replacement.As a result, recently appointed Non-Executive Chairman, Paul Vining, has resigned to avoid strategic conflict with Westmoreland where he is Chairman.Pending review outcome, we assume nominal debtCommentary in the quarterly suggests capital expenditure is required at New Elk, on existing continuous miners, and at Black Warrior on additional mining equipment.
Additional funding will be required to replace equipment finance facilities that AHQ has been unsuccessful in obtaining, to sustain planned production rates at Black Warrior.With delayed ramp up, and a concomitant delay in materially lower operating costs, we see additional funding being required; we assume A$5M debt in FY23.Key Dates AheadAugust 2022 - completion of Strategic Review.September 2022 – FY22 Annual Report.
Goldman's Currie Says Commodities Will Surge in 2023
https://www.youtube.com/watch?v=RIG2G--9fV0
I agree and am positioned in what I believe will be continued hot commodities - Graphite,Lithium,Copper,REE ...new tech minerals etc ...and of course the ever expanding demand for energy because of the tech driven economy's ...so Oil,Gas,Coal,U308 etc
yes I feel when people are freezing in their homes and investors are hunting for yields in a high interest rate environment high returns from commodities producers of the likes of O&G Coal etc are going be the go to Vs the low return investment of the solar/windmill crew
The IEA Pathway to a low carbon future
forecasts that the world will be making more steel using coking coal in 2050 than it is today and
that this is unavoidable. The transition to a low carbon future has to be managed thoughtfully
and carefully to avoid shortages of old energy sources until the world has actually transitioned
to new sources. There is no evidence that any country is exercising that care, so the next
decade is likely to see critical shortages of steel and energy driven by under investment in coal,
meaning above expectation prices and super normal profits for companies
Bad days like we see in the resources sector of late I like to watch Rick rule and his common sense
https://www.youtube.com/watch?v=TAnLvDxdA-s&t=2032s
Some interesting deep value being exposed after the recent slide, for those who know where
it is buried ..
Some postive news for consumers. Commodity prices are going to drop further. One of the main reasons for high inflatioin worldwide is historically high commodity prices.
https://www.agupdate.com/farmandranc...e95e412c5.html
https://www.barrons.com/articles/oil...onomy-5b1df0af
Oil Prices Tumble. Worst Case Could Be $40 a Barrel.
Natural Gas
https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
Grain futures prices
https://www.barchart.com/futures/grains
Iron Ore
ps://www.hellenicshippingnews.com/iron-ore-extends-losses-on-concerns-over-china-demand-prospects/
An interesting article on developments in CATL's Electric Batteries -
https://www.abc.net.au/news/science/...ible/102289310
CATL unveils battery that may power electric airplanes and 1000km-range EVs
@Valuegrowth:
The real problem with Toyota as Sandy Munro (EV specialist and critic) is they've missed the boat. Here's a quick chart on what Covid did to these auto makers:
https://i.imgur.com/dwyKj51.jpg
BTW, that Toyota YouTube video did not answer the basic question why Toyota is struggling to make EVs so as an excuse, they say "EV'S Not The Answer" as a cop out to losing their market share. Don't believe Toyota is losing their customers? Here's a news release last week:
https://jalopnik.com/toyota-owners-t...nds-1850386992Quote:
The latest report from used car retailer CarMax says that search volume for EVs has doubled in the last year, spurred on by higher gas prices throughout the country. More car shoppers are now seeing these searches through to the purchase of a used EV, trading in their ICE-equipped cars in the process. And according to CarMax, Toyotas are the “most traded in brand for EVs,” which is telling for the Japanese automaker that has been more reluctant than most to transition to fully-electric cars.
I don't know about you but I sure wouldn't want to be a Toyota shareholder. Not when you have a decarbonisation plan set by the Paris Accord with commitments from all the major OECD nations.
We can clearly see sell-off in commodities and commodity stocks world wide.
https://www.reuters.com/world/americ...gh-2023-05-30/
https://www.cgiar.org/news-events/ne...now-bloomberg/
"From copper to wheat to natural gas, the cost of some of the world’s most important products is crashing, bringing long-awaited relief for consumers that were stung by last year’s soaring prices,” reportsBloomberg."
I don't think these low commodities will last much longer ... reality is we aren't seeing anywhere near the investment from miners to even keep at present demands let alone the massive increase predicted ... the smart investors will be positioning for that fact with 1Yr+ outlook
Yes of course the insane apartment blocks in the 90+ Chinese cities will slow down ... but so it did in the USA decades ago and yet they still have the highest consumption of resources per person ....
Material consumption footprint per capita in high-income countries is 60% higher than in upper-middle-income countries and more than 13 times the level of low-income countries.,....
CHINA is moving to a much higher income country as is INDIA ...AFRICA etc ...
I’d never heard of hydrogen (or helium) mining until I read this article on CNN.
https://edition.cnn.com/2023/10/29/c...ate/index.html
One of the companies mentioned, Gold Hydrogen on the ASX has just come out of a trading halt and jumped a wee bit. guessing based on the exposure they received.
Interesting area, anyone know of other companies doing similar?
Demand for commodities appears weak.I began re-balancing my portfolio gradually to benefit from falling commodity prices when commodity sector was hot.
"Potentially life-changing greenfields exploration still drawing investors hungry for the next big one"
https://www.livewiremarkets.com/wire...RISING%20STARS
Copper pretty much at all time highs.
Bit of catch up imo due to the forecast supply deficit.
I think it's the start of many other commodities stretching. Silver is only about half all time highs.
Gold I'm picking $3k plus once US interest rates are in decline.