Category: INO.com Contributors

Gold ETFs Setting New Highs

Posted on by Matt Thalman

During the final days of July, Gold hit new all-time highs just below $2,000. The record run higher for the precious yellow metal, and for most of the precious metals, it has been in large part caused by the worldwide pandemic. As investors become nervous about the future, many find safe harbor in gold and other hard asset metals.

The bull market will likely continue as long as the pandemic and world economies struggle to gain traction. But, if we see a vaccine that really protects against Covid-19, the price of gold will likely begin to fall as investors move back away from safe investments and back into equities, bonds, and other higher-risk – higher growth investments. When the rally ends, well, that’s, of course, the trillion-dollar question and one that I can’t help with. However, I can point you in the right direction of what to invest in regardless of which way you think the price of gold is headed.

The big dog in the gold Exchange Traded Fund world is the SPDR Gold Trust (GLD). GLD has over $77 billion in assets under management and has been in existence since 2004. The fund charges a 0.4% expense ratio and has an average daily dollar amount volume of just over $1.76 billion, meaning it typically has liquidity. GLD tracks the spot price using gold bars held in vaults in London. This is an excellent option for anyone who wants the protection of gold but doesn’t want the hassle of buying actual gold bars. Continue reading "Gold ETFs Setting New Highs" →

Let's Move Forward, Not Back

Posted on by George Yacik

Since the beginning of the coronavirus crisis, the Federal Reserve has probably done more to try to ease the financial pain of businesses, consumers, and institutions than just about any other organization on earth with their monetary policy. It’s lowered interest rates, purchased trillions of dollars of assets – some of which, like corporate bonds, it’s never bought before – eased bank capital requirements, and increased existing or created new lending programs to help Americans weather the storm and get back on their feet.

Now the president of the Minneapolis Fed and a current voting member of the Fed’s monetary policy committee is calling on people to suffer a few more weeks in quarantine in order to get the virus under control and the economy back on an upward trajectory – as if it weren’t on that already.

“If we were to lock down really hard, I know I hate to even suggest it. People will be frustrated by it,” Neel Kashkari told CBS’s Face the Nation program. “But if we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it's happening in the Northeast right now. That’s the only way we’re really going to have a real robust economic recovery.”

“Now, if we don't do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we're going to see many, many more business bankruptcies, small businesses, big businesses, and that's going to take a lot of time to recover from to rebuild those businesses and then to bring workers back in and re-engage them in the workforce. That's going to be a much slower recovery for all of us.”

If we take his advice and do another “hard lockdown” for six weeks or a month, how many more businesses will fail, and how many more people will be laid off or lose their jobs permanently in the meantime? Continue reading "Let's Move Forward, Not Back" →

Dollar Index, Gold And Silver Updates

Posted on by Aibek Burabayev

The market moves in zigzags and not in a straight line as it takes a break from time to time to accumulate enough power to continue with the trend. In my post last week, I mentioned the US dollar index (DXY) as one of the drivers of the precious metals rally. This time I would like to share the daily chart of it below as I spotted a reversal signal there, which could affect precious metals.

Dollar Index

The DXY price was rejected right at the contact point with the downside of the red downtrend channel. The price tried that support twice on the 31st of July and the 6th of August but failed to break below. This, again and again, demonstrates the power of simple trend channels.

The other move was very sharp to the downside within two equal zigzags pushing the price from 100.9 to 92.5. The DXY was oversold, and now it could enter the retracement stage to let traders book some profit covering shorts, and contrarian traders might enter longs here playing on the trendline rejection. The price could touch the opposite side of the trend channel around 96 as this could be not a minor, but a large corrective structure as we saw such last time only this April. Continue reading "Dollar Index, Gold And Silver Updates" →

Will The Futures Market Join The Party?

Posted on by Mike Seery

Silver Futures

Silver futures in the September contract settled last Friday in New York at 24.21 while currently trading at 28.50 up over $4 for the trading week hitting a 7-year high as the entire precious metal sector has exploded to the upside. Gold prices hit all-time highs this week helping support silver as prices traded as high as 29.91 in today's session, and if you have been following my previous blogs, you understand that I thought the $30 level could be touched.

I have been recommending a bullish position over the last month from around the 18.61 level, and if you took that trade, continue to place the stop loss under the 2 week low standing at 22.46 as an exit strategy. However, I did have several clients take profits around the $29 level as it all depends on your trading account size and risk tolerance at this time as the volatility is crazy. I think we will start to consolidate over the next couple of weeks, but I still think we are in a bullish secular trend that will last for several years. All the stimulus packages are finally coming to fruition helping push up asset classes, and I do believe the rest of the commodity markets will start to join the party.

Silver prices are trading far above their 20 and 100-day moving average as the trend clearly as to the upside as prices are in extreme overbought conditions, and if you are not involved in this trade, I would sit on the sidelines as the risk/reward is not in your favor.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Platinum Futures

Platinum futures in the October contract ended the week on a sour note down $43 at 970 an ounce after settling last Friday in New York at 918 up over $50 for the trading week as prices hit a fresh contract low in today's trade. Continue reading "Will The Futures Market Join The Party?" →

U.S. Crude Oil Production Collapsed In May

Posted on by Robert Boslego

The Energy Information Administration reported that May crude oil production collapsed by 1.989 million barrels per day (mmbd), averaging 10.001 mmbd. That compares to the EIA’s weekly estimates (interpolated) of 11.419 mmbd, a figure that was 1.418 mmbd higher.

Crude Oil Production

Reductions were largest in Texas (764,000), North Dakota (353,000) and the Gulf of Mexico (300,000) and New Mexico (168,000). Given the huge reduction in May, production dropped by 2.112 mmb/d over the past 12 months. This number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply fell by an additional 680,000 b/d from a year ago.

Crude Oil Production
Continue reading "U.S. Crude Oil Production Collapsed In May" →