Gold & Silver: The Calm Before The Storm

Aibek Burabayev - INO.com Contributor - Metals


In September I warned you about the possible weakness in both gold and silver after a good rally as strong reverse signals appeared on the chart. That warning alert paid well as the metals dropped heavily – gold lost more than 7%, and silver fell more than 10%. I hope it helped those of you who had market exposure that time.

There are updated charts below with further price action forecast, which is based on pattern recognition and market staging approach. I hope my detailed graphs with annotations will help you understand market behavior, training your eyes to recognize patterns and determine market stages with me.

Chart 1. Gold Daily: The Baby Bird Could Fall Out Of The Nest

Gold Chart
Chart courtesy of tradingview.com

In the previous gold chart I put two zigzags to show you possible paths for further price action, the red zigzag was the main option, it showed the downside move with a small consolidation inside. In reality, the drop has been even sharper with just a minor correction within. Continue reading "Gold & Silver: The Calm Before The Storm"

Copper Update: 1-Year After The Election Of Donald Trump

Aibek Burabayev - INO.com Contributor - Metals


American Dream

One year has passed since President Donald Trump was elected to office. That month I wrote a post about copper’s ultimate monthly performance compared to other commodities thanks to the new president’s promises of huge infrastructure rebuilding.

Below is a 1-year performance chart of copper to see how the metal has been doing since Election Day.

Chart 1. 1-Year (from November 8th, 2016) Copper Performance

Cooper Performance One Year
Chart courtesy of tradingview.com

Cooper gained a hefty 25% for the period with a peak of around 33% that it hit last month. In the post-election months copper exploded to the upside, but then the euphoria in the market was changed with profit taking erasing earlier gains. Continue reading "Copper Update: 1-Year After The Election Of Donald Trump"

The Modern Gold Rush: These Three Stocks Could Benefit

Aibek Burabayev - INO.com Contributor - Metals


History repeats again and again as human beings don’t change; they only change on the surface. There is a good lesson learned from the Gold Rush in the 19th century – there were some lucky diggers, who made a fortune, at the same time many merchants who were selling equipment and jeans became rich. But many adventurers left broke.

These days we have the Crypto-Mining Gold Rush led by Bitcoin with a market share of more than 60% and market capitalization over $124 billion. This coin is worth as much as the Hungarian GDP and exceeded the market cap of NVIDIA Corporation (NASDAQ:NVDA) – one of those “merchants” selling “shovels” to modern “diggers” aka miners.

Today, as long ago, the competition gives an advantage to cooperated mining pools with the most advanced equipment, lowest electricity, and labor costs. That’s why there is no surprise that the top mining pools are located in China (70% of the Bitcoin hashrate).

There are two main types of suppliers to the crypto mining industry: electricity suppliers (up to 70% of all mining costs) and equipment suppliers. The massive demand for mining equipment attracts nimble middlemen, for instance, they resell the ASICs (application-specific integrated circuits, microchips) for 2x-3x of the original price tag, making relatively risk-free money on modern “diggers” that risk a lot. Continue reading "The Modern Gold Rush: These Three Stocks Could Benefit"

HUI Is Testing Support, XAU Is Yet To Try

Aibek Burabayev - INO.com Contributor - Metals


Much to my dismay, I’ve never covered these hot indices in my posts. I detected some interesting chart patterns as well as significant price actions and thought if it might be interesting to cover and discuss.

These indices have a long trading history as well as great companies that are tracked by each index. The NYSE Arca Gold BUGS Index (HUI) and Philadelphia Gold and Silver Index (XAU) are the two most watched gold indices on the market. The main difference between them is that the HUI Index’s components are only gold producers (17 companies) whereas the XAU Index includes both gold and silver miners (30 names). Below is the table of listings for comparison.

Table 1. Current Composition of Indices

XAU and HUI Index Listings

I highlighted the matching companies in green so you can easily see the difference between the indices. It is evident that the HUI index almost entirely sits in the XAU index (15 out of 17 names are in), the latter in its turn covers broader the precious metals market. Let us see in the charts below their dynamics and possible price action. Continue reading "HUI Is Testing Support, XAU Is Yet To Try"

Palladium Finally Beats Platinum

Aibek Burabayev - INO.com Contributor - Metals


Chart 1. Platinum Vs. Palladium: Crossed Swords

Platinum Vs. Palladium
Chart courtesy of tradingview.com

Sixteen years ago was the last time that platinum was cheaper than palladium in 2001 (black vertical line). By then palladium had spent a year in the dominant position over platinum, and at that time the price of both metals had been fluctuating around $600 level. Since then platinum has returned to its usual upper position to palladium, and the gap was growing exponentially in favor of platinum until it reached the peak with the $1600 of supremacy in 2008. After that, the gap began to narrow and last month it entirely evaporated as a global shift in the automotive industry showed a growing demand for gasoline and hybrid cars (palladium related) amid slowing demand for diesel cars (platinum related).

The Volkswagen emissions scandal started on the 18th of September 2015 (orange vertical line), when the United States Environmental Protection Agency (EPA) issued a notice of violation. I dedicated a post in 2015 to that significant event. The price of both metals continued higher right after that news as the reaction time to such a report always has a gap in such a giant industry. Continue reading "Palladium Finally Beats Platinum"