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Copper Update: "Black Gold" Is Too Wild

Aibek Burabayev - INO.com Contributor - Metals

Last time I shared with you a clear signal from Crude oil to short Copper for a good dip down. Oil has dropped as foreseen from the $47.7 level. That's down a good $8 (17%) and it dragged Copper down along the way. This confirms Copper's tight relationship with Crude oil. Copper plummeted for a nice gain from a short position which has reached .35 (15% smaller than from Oil short) on Friday's low ($2.03). My original targets haven’t been met in both instruments ($ 37.7 Oil and $1.9 Copper), and that is why I would like to discuss my concerns with you.

Again we will start with the leading instrument in my regular cross-instrument analysis. [Read more...]

Copper Update: Crashing Crude Oil Lures Down Melting Copper

Aibek Burabayev - INO.com Contributor - Metals

In my previous Copper update in September, I proposed readers to cover shorts in Copper ($2.32 level) and to watch Crude Oil for further clues as the “black gold” rocketed for a worrisome $10 in 3 days while Copper was quietly sleeping, unaware in its sideways “bed”. Indeed, the metal started to elevate with a two-day gap following Crude Oil, confirming that the signal was valid, and Copper reached $2.5.

Crude Oil Daily Chart: Bears Have Attacked and Bulls At Halfway

Crude Oil Daily Chart
Chart courtesy of TradingView.com

Let’s start from the leading instrument’s chart above. Last time, I assumed that Crude oil should have reverse down ahead of the downtrend touching a point at $53 and it reversed earlier than I expected – just below $51. This was due to huge selling pressure in the market. [Read more...]

Year To Date Dynamics: Metals Versus Top Assets

Aibek Burabayev - INO.com Contributor - Metals

Today I prepared for you the year-to-date comparative dynamics of the metals versus the top financial instruments including the Dollar Index, crude oil and the S&P 500 index.

Gold Comparison Chart
Chart courtesy of TradingView.com

As seen in the above graph, half of the instruments started the year on an upbeat tune, lead by Silver and followed by Gold, Platinum and the Dollar Index. The other half started with a nose-diving fall, especially crude oil followed by Copper, Palladium and the S&P 500 bringing up the rear. [Read more...]

Copper Update: Crude Oil Signals To Cover Shorts

Aibek Burabayev - INO.com Contributor - Metals

Last month, I published a post about the correlation of the World GDP and Copper prices. I also covered the close correlation of Crude Oil and Copper prices.

Chart 1 Crude Oil weekly: Sharp rebound

NYMEX Crude Oil
Chart courtesy of TradingView.com

As seen in the above weekly chart, Crude Oil bulls attacked the market without a declaration of war and caught sellers unaware. The price quickly grew more than $10 in just three days.

This severe price action on the weekly chart has formed a so-called Bullish Engulfing pattern. That's when the small red bearish candlestick is followed by a large green bullish candlestick that completely eclipses (engulfs) the previous week's candlestick. It means that bulls have taken control of the market and the price has gone lower (or is at the end of the decline). [Read more...]

Copper Points At Weaker Economy?

Aibek Burabayev - INO.com Contributor - Metals

Reddish Metal Disagrees With GDP Readings

World GDP abd Copper Price Growth Dynamics
Chart: Aibek Burabayev; Data: World Bank, CME group

Copper is a core element of our everyday life and it will only grow to be even more important in our digital life as we strive for comfort. The diagram above shows it without saying a word.

The 10-year dynamics of the GDP and Copper growth had the same trajectory, at least until 2014 when the ratios diverged. In 2005-2007 the metal had fallen ahead of the GDP with a steeper curve in 2007 and then both indicators met in the collapse of 2008-2009. And then, amazingly, the ratios proceeded to keep together on the graph showing ideal matching from the bottom to the top in 2010. [Read more...]

Buy Gold For Euros, Sell Copper For Dollars

Aibek Burabayev - INO.com Contributor - Metals

Gold/EUR Is A Buy

Chart courtesy of Tradingview.com

In my January post, I gave the recommendation to buy Gold versus the EUR at 1022 EUR, with a target for inverse Head and Shoulders pattern at 1208 EUR. As seen in the above monthly Gold/EUR chart, the target hasn't been reached so far, but the maximum advance of 138 EUR (14% between 1160 and 1022 EUR) was significant. Today I will update you on that idea with a new pattern that I found on the chart.

For 10 years, the Gold/EUR has been in a long-running uptrend (highlighted in green). The price had been elevating all the way up from 2005 charting clear zigzags and peaked only in 2012 at 1384 EUR level. Then we saw almost a 40% sharp fall from 1384 down to 856 EUR minimum. At the end of 2013, Gold touched the downside of the trend and one month later, at the start of 2014, the market rebounded from the support and found resistance at the magic 1000 EUR level where the price bounced off into a sideways consolidation between 900 and 1000 EUR. [Read more...]

Chen Lin's Secret to Finding the Next Goldcorp

The Gold Report: You've written that the China-led Asian Infrastructure Investment Bank (AIIB) could lead to a boom in commodities. We recently saw that South Korea is joining a number of European countries and signing on, despite U.S. reservations. Do you see this as a threat to U.S. fiscal dominance?

Chen Lin: I think this is a first step for China. The country has a huge reserve, $4 trillion, much more than it needs on the balance sheet to stabilize its currency. The rest is wasted, collecting no interest. China made some huge mistakes in the past through poor acquisition decisions because of faulty lending standards. This is a sign that it has learned from its mistakes and wants to make the most of the trillions it has to loan out right now. The bank will operate close to international standards, and because it has many nations involved already, defaulting loans will include less risk.

"Pretium Resources Inc. is a very high-grade, low-cost, exciting story."

This is a test. If it is successful, it can expand to Africa, South America, even Europe and North America. China has trillions of dollars sitting, doing nothing. It wants to find a way to lend money it can almost guarantee to get back and then put the money to use in the form of development. China has a huge infrastructure network capacity, requiring steel and cement. This creates jobs, which is good for the economy. That was the thinking behind the announcement.

If the AIIB is successful, it will be a big boon for base metals, energy, platinum and palladium sectors. It may even boost silver demand and prices because of its industrial use. I don't think it will have too much impact on gold, though.

TGR: Does that include copper? It has been below $3 per pound ($3/lb) all year. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/VljXJx6RlrQ/16601

Short Copper, Pray For Gold, Watch Ratio

Aibek Burabayev - INO.com Contributor - Metals

Dear INO.com Readers,

Today, I'm reviewing three metals based on short-term analysis.

Copper Is A Good Sell

Daily Copper Candlestick Chart

In my January post, I recommended selling copper above $2.75 and I hope you enjoyed a nice profit. For those of you who didn’t take that chance, below is my new one for you.

In December, copper entered a small steeper downtrend (highlighted in red) as the falling price accelerated. After breaking below the descending triangle’s base at $3.02 on the monthly charts, this red metal hit a multi-year low at $2.42, unseen from 2009, losing an impressive 20% in just 2 months. The price met the downside of the channel and quickly bounced off for a $0.20 gain and I will show why you should consider it a dead cat bounce. [Read more...]

Gold's Grinding Message

Precious metals boosters will see gold's nominal price break upward and probably get excited.  They will marshal the troops for what could one day turn out to be a full fledged tout, as if the 40% decline of the last 2.5 years had never happened.


But it is gold’s ratios to positively correlated assets that tells the interesting story.  Vs. Crude Oil, the story could be shaping up to be a positive one for the gold mining industry, which is counter cyclical and obviously energy and fuel intensive. [Read more...]

Whack-a-Mole (Japanese Nikkei is the Latest Bubble)

Alan Greenspan gave them the playbook (Credit & Debt Manipulation 101) and now Ben Bernanke and global inflators everywhere have taken the ball and run with it in new, innovative and levered up ways.  Actually it’s a game of Whack-a-Mole and they play it well, these inflating moles.  The minute you think you’re going to drop the hammer on one of their heads, he’s gone and another one pops up elsewhere.

So how can we follow all the data points that hands-on, manipulative policy has introduced and forecast conclusions with accuracy?  The answer is that it is difficult in the short-term, but in the long-term we are all dead anyway, so we might as well use some inflationary bubbles of the past as a road map to what may be ahead.

There are currently several bubbles (and one anti-bubble*) in play over varying time frames.  These bubbles are the direct result of policy actions.  Last weekend we reviewed the bubble in Japan’s Nikkei in relation to its policy-induced crashing of the Yen and then last week wouldn’t you know that the Yen caught a bid and the Nikkei suffered an incredibly bearish day? [Read more...]

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