Category: INO.com Contributors

"Dr. Copper" Prescribes Gold

Posted on by Aibek Burabayev

The idea behind "Dr. Copper" is that copper is a reliable barometer of economic growth, as the demand for copper tends to rise when the global economy is expanding and fall when it's contracting.

Last December, I shared my bearish outlook for copper futures titled “Fed Fears Inflation, Copper Fears Hawkish Fed”. It was based on the long term map of downward move with a current pullback playing as a junction between large 2 legs down.

The majority of readers expressed a mildly bullish stance, with the belief that the price of $3 for copper futures should hold.

The second largest group had an ultra-bearish outlook, targeting a price of $1.25 during a potential Great Recession.

Let us see in the weekly chart below the updated map.

Copper Futures Weekly

Source: TradingView

The copper futures price stalled at the same level after an earlier attempt to push below the red trendline support failed. Continue reading ""Dr. Copper" Prescribes Gold" →

Oil & Gas Stocks Are Here To Stay

Posted on by Matt Thalman

During his State of the Union address, President Joe Biden noted that the U.S. will still need oil and gas for at least another decade. This comes as the President has pushed for a significant transition in our country to renewable energy.

President Biden has fought against the oil and gas companies since the beginning of his tenure. He has told Americans that we need to reduce our reliance on oil and gas and move towards renewable energy as soon as possible.

The President has pushed for legislation to make renewable energy more affordable. All this while telling oil and gas companies that they need to invest more to grow supply but not offer them the same concessions.

More so, the Biden administration has tried to reduce the number of oil and gas leases the federal government can sell. Thus making it more difficult to increase supply. Some government policies are also making the industry smaller since new and smaller companies are getting squeezed out due to regulations.

I think most people would agree that burning oil and gas is not ideal for the environment and more so that we need to reduce our reliance on foreign oil and gas producers such as Russia (which we primarily have done since the start of the war with Ukraine) and those countries in the middle east that are not so friendly to the U.S.

However, it will be more than even the decade President Biden admitted to in the State of the Union address until we are indeed off the oil and gas addiction our country currently has.

For example, even the most aggressive state legislation coming out of California and New York doesn't ban the sale of internal combustion engines until 2035, more than a decade from now. While electric vehicle sales rapidly increase in the U.S., they are growing from a super low starting point.

The reality is that the government is making it more difficult for oil and gas companies to expand supply either with laws, not selling leases, or banning gasoline vehicles in the future, making long-term investments less appealing. This inadvertently pushes oil and gas prices higher and makes these companies more profitable.

And remember, this is all during a time when the President, a Democrat, is not 'pro' oil and gas. Take a moment to imagine how well the industry could be doing if the President and Congress were both 'pro' or even indifferent about the oil and gas industry.

So with that being said, let's look at a few exchange-traded funds that you can buy today to possibly play the boom the oil and gas industry may be setting up for over the next few decades. Continue reading "Oil & Gas Stocks Are Here To Stay" →

2 Gold Stocks To Add To Your Watchlist

Posted on by Taylor Dart

2023 has been a great year for investors thus far, with several asset classes enjoying double-digit year-to-date percentage gains, including the Nasdaq 100 Index (QQQ).

While it may be lagging short-term after a strong November and December, the strongest performance has come from the Gold Miners Index (GDX), which outperformed the Nasdaq 100 by more than 3500 basis points in 2022, and is up 46% off its Q3 2022 lows.

Following this strong rally in the GDX and a surge in optimism among investors, some consolidation or a deeper pullback would not be surprising.

However, it’s worth building a watchlist of undervalued now to prepare for sharp pullbacks, assuming these stocks retreat into a low-risk buy zone.

In this update, we’ll look at two gold names still trading at deep discounts to fair value and highlight their low-risk buy zones:

Argonaut Gold (ARNGF)

Argonaut Gold (ARNGF) is a gold producer with a market cap of $430 million and was a name I highlighted in November as one to keep a very close eye on, and I stated the following:

To summarize, this pullback in the stock has provided a fire sale, and I don’t recall the last time I saw sentiment this bad for a producer in years.

Since that update, the stock has soared by more than 60% and is one of the top-performing gold producers by a wide margin.

This is partially attributed to the strong recovery in the gold price that has placed a relentless bid on gold miners but also due to several positive developments.

The major one worth discussing is the appointment of a new Chief Executive Officer, Richard Young, who is well known for transforming Teranga Gold from a junior producer into a $2.0 billion miner before its eventual takeover in late 2020. Continue reading "2 Gold Stocks To Add To Your Watchlist" →

Jobs Report Dropped A Bombshell On The Markets

Posted on by Aibek Burabayev

The non-farm payrolls report released last Friday dropped a bombshell on the market, revealing the US economy added 517K jobs in January 2023, surpassing expectations of 185K and the highest since July 2022.

Growth was seen in leisure and hospitality, professional and business services, health care, government, retail trade, construction, transportation and warehousing, and manufacturing. Despite tech layoffs and potential economic slowdown, the labor market remains tight, with November and December job numbers revised higher.

This was a real shocker that caused huge, unexpected waves of volatility in the markets. Let’s have a look at 1-day futures performance last Friday in the diagram below. It looks like a red sea with a small island covered in green grass.

1 Day Futures Performance

Chart courtesy: finviz.com

Gasoline, silver and platinum were the ultimate losers that day with massive losses of -5.3%, -5.2% and -5.1% respectively. Gold futures lost huge -2.8% as well. Palladium futures price plummeted -1.8%. Among metals, Copper futures were the most resilient at -1.5%. Continue reading "Jobs Report Dropped A Bombshell On The Markets" →

AI - Do You Have It in Your Portfolio?

Posted on by Matt Thalman

In late January, the world of artificial intelligence went mainstream when popular online media company BuzzFeed announced it was planning to use artificial intelligence software called API to help it generate content.

OpenAI, the company that created API, also made the more popular ChatGPT, released in November of 2022.

API and ChatGPT have been used to write emails and create quizzes and listicles. It has even been used to write reports on popular books and other essay-style assignments for high school and college students.

While we have all heard about the potential of artificial intelligence for years, BuzzFeed taking the plunge and using it to create content is a big deal.

For most of us, this is the first time we can say we are seeing the technology firsthand (well, at least that will be true when we see our first AI-created quiz or article).

Up until now, AI has to most people, just been a pie-in-the-sky idea that we weren't sure how it was going to affect our lives. Or how we would interact with AI technology on a day-to-day basis.

BuzzFeed using AI, makes it real now.

And now that it is real and not just a research project some technology company in California is spending money on, maybe now is a good time to put some real money into it.

Unfortunately, OpenAI, the creator of these AI chatboxes, is not publicly traded. But, a number of other companies are developing similar technology and are publicly traded.

However, since we are still very much in the infancy stages of AI technology, my suggestion is not to try and cherry-pick the AI winners today but bet on the idea that AI as a technology will prevail. The way to do that is with Exchange Traded Funds.

Exchange Traded Funds that buy companies developing artificial intelligence and robots will expose you to the whole industry but reduce your single stock risk. Let's take a look at a few ETFs that are focused on AI, and then you can decide which one is right for you. Continue reading "AI - Do You Have It in Your Portfolio?" →