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"

Is Stillwater Mining Company (NYSE:SWC) A Smart Takeover?

Aibek Burabayev - INO.com Contributor - Metals


Back in September, I wrote that the Stillwater Mining’s stock price was under pressure amid a weakening Platinum. The metal’s price action signaled that another drop below $1000 was in the cards. Indeed the metal price has lost “one digit” sinking to a low of $890 last month from the $1030 level when I wrote the post.

Stillwater Mining Company (NYSE:SWC) followed the metal’s drop and fell from $12.43 to $11.19 last October, but then it started to rocket higher and hit the 2-year maximum at the $17.50 level last December despite the new low in the platinum price. The clear answer to this contradiction in the metal and stock price behavior came on the 9th of December, 2016. That day, “The Last Mohican” of pure American platinum-group metals (PGM) producers announced that it would be acquired by a South African company for $2.2 billion in a deal that requires U.S. government approval. The purchase price was set at $18 per share and this explains the robust growth of the stock price on the market. Continue reading "Is Stillwater Mining Company (NYSE:SWC) A Smart Takeover?"

Precious Metals In 2016: The Dark Horse Won The Prize

Aibek Burabayev - INO.com Contributor - Metals


This interesting year is coming to an end and in this post I would like to offer you a summary of precious metals’ dynamics in 2016.

Chart 1. Metals in 2016: Boom And Bust

Precious Metals 2016
Chart courtesy of tradingview.com

This year metal trading was quite exciting. The chart shows that we have gone through a full Boom and Bust cycle and the top of the cycle amazingly coincides with the middle of a year, when metals showed a maximum gain (except Palladium) within the 25-50% range. Ideal distribution within a single year! Continue reading "Precious Metals In 2016: The Dark Horse Won The Prize"

Stillwater Is Under Pressure As Platinum Can Lose One Digit

Aibek Burabayev - INO.com Contributor - Metals


Chart 1. Platinum Monthly: Roller-Coaster

Platinum Monthly Chart
Chart courtesy of tradingview.com

Platinum booked an almost 50% gain from the bottom at $811 level in January 2016 to the top at $1194 level last month as falling crude oil spurred the demand for cars especially with large engines which in its turn lifted the demand for catalysts. As you can see, there is always a winner if there is a loser.

Those magical days for the metal are gone the same peak month in August, and the price painfully lost $150 from the top as the price was rejected by the upper side of the red multi-year downtrend. This month we can see that the market was trying to climb back to the upside as the candle has a long upper wick but failed to grasp the gains and slid down to the black vertical support. The price has started to drill it already, and it’s highly probable that we can witness the break this month. The break and close below $1020 would confirm the break. The next stop could be only at the June’s low at the $952 mark where the metal would lose one digit and will only have a 3-digit price. Continue reading "Stillwater Is Under Pressure As Platinum Can Lose One Digit"