A view on commodities
- Thread starter DSM
- Start date
Copper on Weekly and daily chart is down. But in the daily charts seems like it is bouncing off from lows. We can only take positions basis intraday charts....
Re. co-realation between Base and Precious metals, the rule of the thumb says : When there is economic expansion and the business confidence is high, commodities (base metals) as well as stocks and indices will tend to do well. Hence investment (liquidity) will pour into these sectors. As a result there will be less preference to invest in precious metals. Also to be noted is the fact that when the economy is doing well, inflation will tend to be high resulting in higher interest rates, which again will discourage investors to pay (higher) interest and invest in precious metals. So in essence, the co-relationship is inverse.... but the world (global marketplace) we live in is more complex. Sovereign funds accumulating or selling gold, war like and black swan like events tend to favour holding of gold as a relative 'safe asset' In essence, the above is the rationale.... however, for practical purposes, these assets cannot be traded that way.
Re. co-realation between Base and Precious metals, the rule of the thumb says : When there is economic expansion and the business confidence is high, commodities (base metals) as well as stocks and indices will tend to do well. Hence investment (liquidity) will pour into these sectors. As a result there will be less preference to invest in precious metals. Also to be noted is the fact that when the economy is doing well, inflation will tend to be high resulting in higher interest rates, which again will discourage investors to pay (higher) interest and invest in precious metals. So in essence, the co-relationship is inverse.... but the world (global marketplace) we live in is more complex. Sovereign funds accumulating or selling gold, war like and black swan like events tend to favour holding of gold as a relative 'safe asset' In essence, the above is the rationale.... however, for practical purposes, these assets cannot be traded that way.
http://www.investing.com/analysis/glencore’s-interests-line-up-with-long-term-zinc-growth-267799
Glencore’s Interests Line Up With Long-Term Zinc Growth
“The firm’s comments when making the announcements are interesting.”
“The main reason for the reduction is to preserve the value of Glencore’s reserves in the ground at a time of low zinc and lead prices, which do not correctly value the scarce nature of our resources,” the company said in a statement.
Of course, another way of saying that is “we are losing money producing from these mines at this price and as part of our efforts to cut £30 billion of debt, we are shuttering any production that is not showing a positive return.”
Of course, they could have said that, but the actual wording illustrates the view of a management structure that both operates and owns the firm. All of Glencore’s senior management are also significant shareholders who have repeatedly shown they can take the long view in a way that conventional mining companies’ investors do not or cannot.
Are we going to see a rally in prices? Once the initial reaction has passed, London Metal Exchange zinc jumped some 12% on the news, it is likely to fall back as the market waits to see what impact a reduction in mine output really has.
Some point to massive off-market inventory as a dampener on the party. Glencore, itself, is credited in some quarters as being the seller of some 228,225 mt of metal that suddenly turned up in New Orleans last month. In the medium term, though, it will be supportive, particularly if it encourages a few others to join Glencore and at least temporarily shutter production during 2016. -By MetalMiner
http://www.investing.com/analysis/glencore’s-interests-line-up-with-long-term-zinc-growth-267799
There is this thought in the back of my mind – Did Glencore spread the news on purpose
Glencore’s Interests Line Up With Long-Term Zinc Growth
“The firm’s comments when making the announcements are interesting.”
“The main reason for the reduction is to preserve the value of Glencore’s reserves in the ground at a time of low zinc and lead prices, which do not correctly value the scarce nature of our resources,” the company said in a statement.
Of course, another way of saying that is “we are losing money producing from these mines at this price and as part of our efforts to cut £30 billion of debt, we are shuttering any production that is not showing a positive return.”
Of course, they could have said that, but the actual wording illustrates the view of a management structure that both operates and owns the firm. All of Glencore’s senior management are also significant shareholders who have repeatedly shown they can take the long view in a way that conventional mining companies’ investors do not or cannot.
Are we going to see a rally in prices? Once the initial reaction has passed, London Metal Exchange zinc jumped some 12% on the news, it is likely to fall back as the market waits to see what impact a reduction in mine output really has.
Some point to massive off-market inventory as a dampener on the party. Glencore, itself, is credited in some quarters as being the seller of some 228,225 mt of metal that suddenly turned up in New Orleans last month. In the medium term, though, it will be supportive, particularly if it encourages a few others to join Glencore and at least temporarily shutter production during 2016. -By MetalMiner
http://www.investing.com/analysis/glencore’s-interests-line-up-with-long-term-zinc-growth-267799
There is this thought in the back of my mind – Did Glencore spread the news on purpose
Source- http://www.marketwatch.com/story/ap...lion-barrel-jump-in-crude-supplies-2015-10-14
“The American Petroleum Institute late Wednesday reported that crude supplies jumped by 9.3 million barrels for the week ended Oct. 9, according to sources. Analysts polled by Platts expected supplies to be up 1.8 million barrels. November crude CLX5, -0.13% was at $46.15 a barrel in electronic trading, down from the contract’s settlement of $46.64 on the New York Mercantile Exchange. The more closely watched Energy Information Administration report is due Thursday. Supply data are released a day later than usual this week because of Monday's holiday.”
Not sure of the relevance of the above data on intraday price movements of crude oil . Posting this message ,for those who could be interested in knowing the data ,released a day before the release of crude inventory data ‘
“The American Petroleum Institute late Wednesday reported that crude supplies jumped by 9.3 million barrels for the week ended Oct. 9, according to sources. Analysts polled by Platts expected supplies to be up 1.8 million barrels. November crude CLX5, -0.13% was at $46.15 a barrel in electronic trading, down from the contract’s settlement of $46.64 on the New York Mercantile Exchange. The more closely watched Energy Information Administration report is due Thursday. Supply data are released a day later than usual this week because of Monday's holiday.”
Not sure of the relevance of the above data on intraday price movements of crude oil . Posting this message ,for those who could be interested in knowing the data ,released a day before the release of crude inventory data ‘
Hi TR,
Rightly pointed out - NG has been hammered badly, irrespective of the pin bar spike on the weekly chart. Technically, NG is in a clear downtrend.... I checked up some fundamental reviews before commenting, but the analyst will leave one more confused than ever - as it is not clear if he is making a bear case or having a bullish outlook. :lol::lol::lol:
NG, as we all know makes moves based on weather foriecast. Dec. is soon approaching, however, the forecast is for milder winter due to El Nino effect. So this is a big negative. The other is that NG inventory above the 5 year average, with little storage space. The only silver lining seems to be that the NG producers have cut back on output.... again not the most positive news, as it is due to low prices and lower demand.
This is what the report on Investing dot com says : US nat gas prices have crashed on three micro factors :
http://in.investing.com/analysis/nat-gas:-bofaml-lowers-year-end-target-to-$3.00-mmbtu-3437
US nat gas prices are breaking down. Front-month futures are trading at $2.29/MMBtu, the third lowest in a decade, while long-dated prices have also come off sharply. We can point to three short-term negative dynamics. (1) the US market suffers from excessive inventories, (2) end-user demand is soft due to sluggish industrial growth and mild weather, (3) production, although flat-lining lately, remains high.
So considering the above, let's look at the charts :
My 2C.
Rightly pointed out - NG has been hammered badly, irrespective of the pin bar spike on the weekly chart. Technically, NG is in a clear downtrend.... I checked up some fundamental reviews before commenting, but the analyst will leave one more confused than ever - as it is not clear if he is making a bear case or having a bullish outlook. :lol::lol::lol:
NG, as we all know makes moves based on weather foriecast. Dec. is soon approaching, however, the forecast is for milder winter due to El Nino effect. So this is a big negative. The other is that NG inventory above the 5 year average, with little storage space. The only silver lining seems to be that the NG producers have cut back on output.... again not the most positive news, as it is due to low prices and lower demand.
This is what the report on Investing dot com says : US nat gas prices have crashed on three micro factors :
http://in.investing.com/analysis/nat-gas:-bofaml-lowers-year-end-target-to-$3.00-mmbtu-3437
US nat gas prices are breaking down. Front-month futures are trading at $2.29/MMBtu, the third lowest in a decade, while long-dated prices have also come off sharply. We can point to three short-term negative dynamics. (1) the US market suffers from excessive inventories, (2) end-user demand is soft due to sluggish industrial growth and mild weather, (3) production, although flat-lining lately, remains high.
So considering the above, let's look at the charts :
My 2C.
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