Rick opines on precious metals; energy and the conventional markets.
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Yes, I heard Rick eating that lunch…..tasty! Good lunch and learn interview.
Oil storage is apparently almost completely maxed out globally and we see oil rallies like today?
It’s a brutal squeeze on the shorts. Oil is going down……but not before the shorts cry Uncle and capitulate.
Not sure what or why a short squeeze would occur today? Did someone issue a report or something about oil?
Or are the big boys merely making the money up and down by testing longs and shorts?
You don’t need to be a genius – short of some major international crisis such as an incident between the West and China or the West and Russia – with oil storage maxed out and tankers sitting full in harbours how can the price of crude go up?
Because of all the things you just wrote Bob….that’s why there are too many short positions and that’s why they are getting scalped for all they are worth. If its any consolation we have nearly hit the peak on this run in WTI and are about to reverse direction and head back down again.
The people at Rambus Chartology and GoldTAdise are taking a bullish view on the US dollar. So is Clive Maund. They are all basically looking for 120 for starters on the USDX.
I can see that surge in the USD destroying gold, silver and commodities generally. Should not be good for oil either. Not sure what it would mean for conventional US stocks?
Where are we now – about 97 on USDX? 120 is a heck of a climb… especially if it is for starters.
A weak Euro is not the same thing as a strong dollar. So I agree with Stewart Thomson’s outlook IF we do see the USD continue to rise….
“Gold stocks are probably now entering a “Goldilocks” type of situation, because a rate hike that causes a US dollar rally would benefit most of the world’s gold mining operations.
They produce gold in non-US currency, and get paid in US dollars.
A rate hike could also create a rally in both the dollar and gold bullion. That’s because modest rate hikes would add clarity to an unclear situation. Real rates (nominal minus inflation) could decline as Janet takes action, and money could flow out of real estate and into gold.
Bank loan activity would increase sharply with rate hikes, reversing the multi-decade decline in money velocity!
A rise in the bullion price would clearly benefit mining companies. In the current environment, which is the opposite of the 1979 environment, rate hikes are extremely bullish for most gold mining stocks!”
http://www.321gold.com/editorials/thomson_s/thomson_s_110315.html
Thanks for the link Matthew.
Best to you,
LPG
HAHAHAHAHA….. Thomson is absolutely insane by thinking rate hike would cause gold to rise. It will crush gold hard and cartel would use that as opportunity to smash metals.
Goldman the arm of the cartel even said so in this article. bwahahahahahhahahah
Goldman Sachs Says Fed Raising Rates in December to Hit Gold
http://www.bloomberg.com/news/articles/2015-10-22/fed-getting-started-on-rates-will-hurt-bullion-goldman-predicts
Agree Mad Max. Thompson is going to be wrong on this call.
Matt you are really digging hard to give yourself justification for going long. Cmon man.
Gold raises in zero interest rate environment which is why it is in bull market.
Gold and interest rates went up together during the entire bull market of the 1970s. Gold went up about 25 fold in those ten years so I don’t think rising rates slowed it down much.
I do agree that gold would get hit on the first rate hike but it would amount to a brief buying opportunity.
Don’t bank on it. I have serious doubts about gold’s future once a rate hike cycle starts and to be honest, further declines would confirm some of my most bearish projections.
IF the phyz price gets to $810……..will there be any to buy. IF, silver get down to $8 will there be any to buy. ……just a wondering mind in need of knowing…………….the CLAW
Frank, if the phyz price gets to 810 there will be a great many more sellers than buyers and a true capitulation in precious metals and miners will be a fact, not a speculation.
Don’t forget….the most selling happens near bottoms and the most buying near tops. That is your tip-off that we CANNOT be entering a new bull market yet. Just look how much speculative buying is happening on each successive rise in gold.
Does that indicate to you metals bulls are exhausted or that a true capitulation has happened? ……. Of course not. The same guys who lost their shirts all the way down from 1900 dollars are still trying to buy back in and recover past losses on the theory that a new gold-bull will make it all better.
Those guys are deluded. The market will make them sell first before another cycle begins. And that is a fact just as it is with the collapse in every other asset class that cannot renew itself until losses are assigned to the speculators and slow learners.
Remaining bearish on oil will not make you much money unless you had shorted when oil was near 100. My account is up big time over October to now with a 25% rally on a heavy position and now new rally started last Friday.
I would take some profits if I were you because WTI looks like it is about to head back down. That is just my opinion of course but lets not put too many eggs in one basket. Nothing goes in a straight line and the daily chart is not even close to bullish crude oil yet.
And here we are 24 hours later. (I must be on a roll this week). My call was timed to perfection…..WTI and Brent both got taken to the woodshed. Down roughly 4% each intraday and having key recent broken supports will continue to trend down for awhile longer. Hope you took some profits Paul.
Today’s LPG interview was really good, Al.
Rick is eating his lunch! And eating goldbug longs for lunch.