Here’s the case for base metals outperforming the precious metals
A special editorial for our friends over at Kitco (click here to visit the Kitco website). Chris Temple joins us to discuss the overall commodity complex in terms of which commodities will outperform. If we do see the infrastructure spending to come to light then the base metals and stocks should get a consistent buy.
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” I Did It My Way!” A beautiful song by Frank Sinatra that describes Donald Trump’s Win.
https://www.youtube.com/watch?v=egY8rUpxqcE
Thanks Charles!
The Baltic Dry Index is fairly flat and then out of nowhere look at DRYS today!
Nothing is making sense today!
There are some people that appear to think Trump is going to act quickly……even before inauguration?
Great points Mr Temple.
This chart doesn’t show today’s action yet but copper is extending it’s relentless move higher and is now about 2.55:
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=W&yr=2&mn=9&dy=22&id=p64767660520&a=453756421
It wasn’t long ago that I seemed to have almost no company on the bull side of copper.
Check out that volume:
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&yr=1&mn=5&dy=0&id=p65284536999&a=482431131
It almost looks like someone is trying to cormer the copper market…..there’s too much volume.
Whatever it is, such high volume breakouts and relentless moves into such overbought readings are bullish. This is how bull markets begin.
The weekly RSI is the highest it’s been in 5.66 years.
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=W&yr=6&mn=3&dy=22&id=p23675819700
Many must have been caught off guard based on all the forecasts for $1 to $1.50 that I’ve come across in the last several months.
Hi Matthew
Always appreciate your thoughts from down under!
I recall the discussion on Copper around the 2ish level
The move is very strong!
I am surprised by the currently poor action in the overall PM market.
Lets see what the next week brings!
Id appreciate any thoughts on PRU.TO that has held up well!
Cheers
Chris
Hi Chris, I don’t have anything smart to say about it fundamentally but the path of least resistance is down on the daily chart and up when looking at the weekly chart.
I think it will easily fall 15% before it finds support.
Daily:
http://stockcharts.com/h-sc/ui?s=PRU.TO&p=D&yr=1&mn=0&dy=13&id=p87070411465
The weekly chart says that such a dip should be bought:
http://stockcharts.com/h-sc/ui?s=PRU.TO&p=W&yr=5&mn=3&dy=0&id=p81983236990&a=456067336
And what about Live Cattle?
Live cattle futures volume was huge yesterday at over 95,000 contracts.
I wouldn’t doubt that the October low will turn out to be THE low, but It’s too early to say for sure (for me, anyway).
http://stockcharts.com/h-sc/ui?s=%24BCOMLC&p=W&yr=3&mn=3&dy=22&id=p52290050810
You can click on both charts this evening to see today’s moves.
I was pondering copper a few months ago, what I follow has moved up about 40% since then.
Does seem to be upward pressure, with Trump talking infrastructure spending, seeing what I follow down from about 2.50 to 10 cents.
Looks like it could be time to buy what nobody wants before they do.
Well, according to Bob,Rogers,Faber etc.
Meanwhile in North Dakota we see more Obama obstruction against oil….
(written by the democratic main stream biased media)
BISMARCK, N.D. (AP) — The U.S. Army Corps of Engineers says it’s trying to defuse tensions between Dakota Access pipeline protesters and law enforcement in North Dakota, but the pipeline’s developer isn’t cooperating.
The Corps asked Texas-based Energy Transfer Partners Wednesday to stop work in the area where protests against the $3.8 billion pipeline have resulted in more than 400 arrests.
The Corps’ similar plea last week was rebuffed. ETP this week said crews were mobilizing equipment in preparation for tunneling under Lake Oahe.
The 1,200-mile pipeline from North Dakota to Illinois is complete except for under that Missouri River reservoir, which has been delayed while the Corps reviews its permitting.
Company spokeswoman Vicki Granado said in an email that work won’t be done until the company gets permission to be on Corps property.
Gold is finally diverging significantly from T-bonds and that is very bullish for the whole gold sector. The process could take awhile but patience will be well rewarded.
http://stockcharts.com/h-sc/ui?s=%24USB&p=D&yr=1&mn=0&dy=13&id=p04120379955&a=483075717
Now that makes sense!
The following is a weekly chart so the Friday close is what matters, but we now have a big bearish engulfing candle (after filling a big gap) that is breaking the neckline of a large H&S pattern in T-bonds priced in gold. Notice that the Bollinger bands are very narrow and that the candle is below the lower one.
This screams “sell bonds and buy gold!”
http://stockcharts.com/h-sc/ui?s=%24USB%3A%24GOLD&p=W&yr=5&mn=11&dy=13&id=p93164017914&a=464882778
Chris, what do you think of CBI and FCX in the near term and the long term and are they due for a pull back before rising again?
Just wrote about one of them in my most recent issue. Generally, I do not give stock-specific recommendations on here; those are for members.
It will be the Wild West again shortly as the Donald rolls back all those regulations and let’s the banks run free.
This is what you call a rejigger – shake up the bones.
Those on the right side will do fabulous, those on the wrong side, too bad.
The DOW Gold ration is basically 15 to 1
I expect that to go much higher as the Donald and the boys rearrange the furniture in the White House.
WASHINGTON (AP) — The Obama administration took action Thursday to boost the development of solar and wind energy on public lands.
A final rule announced by the Interior Department would create a new leasing program on public lands and encourage development in areas where it would have fewer effects on the environment.
The rule came a little more than two months before President-elect Donald Trump takes office, and a new Republican administration could reconsider it.
The Interior Department said the rule would help develop cleaner domestic energy.
“We are facilitating responsible renewable energy development in the right places, creating jobs and cutting carbon pollution for the benefit of all Americans,” said Interior Secretary Sally Jewell.
President Barack Obama has called on the Interior Department to approve renewable energy projects that generate 20,000 megawatts of power on public land by 2020. The department said the rule’s competitive leasing provisions will apply to 700,000 acres of public lands in Arizona, California, Colorado, Nevada, New Mexico, and Utah.
Wyoming Study: Fracking Likely Not Behind Well Water Problem
Associated Press – 11/10/2016
CHEYENNE, Wyo. (AP) — A final report on foul-tasting well water in a rural Wyoming community has found that hydraulic fracturing probably didn’t cause the problem.
The U.S. Environmental Protection Agency touched off a national backlash in 2011 when it said fracking likely was behind the groundwater problem in Pavillion.
The controversy came as the process boosted oil and gas production and drove down costs for transportation and heating.
The EPA never finalized its Pavillion report and instead handed the investigation over to Wyoming.
After a two-year study, Wyoming officials said Thursday that bacteria might have tainted the wells in the Pavillion area.
CEM.V looks great and is up almost 16% this week:
http://stockcharts.com/h-sc/ui?s=CEM.V&p=W&yr=4&mn=2&dy=0&id=p69109184655&a=463644140
We have a bullish divergence between silver and gold. Take a look at each, relative to the 30 week MA:
GLD:
http://stockcharts.com/h-sc/ui?s=GLD&p=W&yr=3&mn=3&dy=22&id=p42533394736
Things look even better when we look at silver priced in gold. This stealthy bullishness makes perfect sense considering how well my tiny caps have performed versus GDX and GDXJ the last several days (and the whole year, for that matter).
SLV:GLD:
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=W&yr=3&mn=11&dy=27&id=p17972417324&a=450264034
Silver has a play o lay because people heard we will fix our Infrastructure from the Donald, old news.
When they clamp down silver gets crushed.
Nope, Trump has nothing to do with it. Silver’s been spanking gold since February. It always outperforms gold in a bull market.
It’s the 1980s again, be long stocks and enjoy it!
Nope. Interest rates were falling throughout the eighties. Now, they will be rising.
Wrong again Matthew
Gold goes down in a rising rate environment
Gold goes up in a rising rate environment
In other words rates don’t matter.
You obviously refuse to let the price be your guide.
Look at the price action right now
Don’t you think people know rates are rising?
This is not your little secret
The truth of the matter is stocks are going to do fantastic and people are repositioning their entire portfolios to get ahead of this.
It’s so obvious only a died in the wool gold bug like yourself can’t see it
James, do some fricken homework for a change. Gold and interest rates went up together through the 1970’s gold bull because real rates were negative. THAT is the kind of environment we are entering now but with the bonus that there is extraordinary and unpayable debt this time.
You’ll see.
What you will find is that stocks and bonds now offer the same yield and stocks will be the place to be in a rising rate environment.
Bonds have been slaughtered the last two days. What did gold do?
Rest my case
TLT is down 13%+ YTD versus gold (6% since Monday’s open) and SPY is still down 10% vs gold year to date.
You’re easily distracted by short term noise.
Well, I was waiting for FCX to go back down into the 8 buck region – was hoping it would have come with a Trump victory. But the opposite has happened.
I am now considering whether I chase or whether I wait for some kind of pull-back to 12 or perhaps 11ish.
Also had CBI on my target list and was hoping for low 20s. Drat. Again, weighing up chasing or waiting for perhaps the gaps up to be filled.
Not distracted at all by short term noise.
Why don’t you listen to Rick, who, you defend so much?
He said the Trump win was a paradigm shift.
Paradigm shifts aren’t short term noise.
You can’t have it both ways
I defend Rick’s hidden pivot method (and his honesty) but strongly disagree with him when it comes to many of his personal opinions and that is one of them.
I have not been one of the many calling for a stock market crash and, in fact, I commented here 3.5 years ago that the Dow could see 19,500. It was 13,000 or so at the time and Al and Jeff Deist were arguing that it was a bubble.
Stanley Drunkenmiller dumped all his gold and Carl Icahn bought a billion $s worth of stock the night of the election.
I guess these two billionaires are distracted by short term noise or aren’t as plugged in as you are regarding interest rates.
Seems to me gold goes up with uncertainty.
With Putin and Trump being nice, things dont look as scary.
“EXPLODING Gold and Silver Prices is the LAST Thing They Want to See.”
Sprott’s John Embry Joins Us to Deliver a William Wallacesque Message:
We could take them out OVERNIGHT if everybody bought physical…
This sounds reminiscent of Max Keisers $500 silver if you want it.
Matthew, it always seems like the nut bags gravitate towards you, you expose them and defend you’re thinking, that makes them mad. You are for sure a lightning rod. LOL! DT
Dick Tracy, I guess you are a Hillary supporter and democrat.
After all you seem to be using their playbook.
If you disagree with Matthew you are a bit bag.
Sounds familiar..if you were a Trump supporter you were a deplorable.
You are a Matthew Zombie.
James, you are hilarious! DT
For any one interested Rick Rule on bnn tomorrow at 1:00
Great interview today with Mr T and Cory on the infrastructure spending and how the new administration may affect both Base Metals and Precious Metals. Thanks guys.
In light of infrastructure building……..Here is my list of construction firms I’m watching:
ORN Orion Group Holdings Inc
MTZ Mastec Inc
TPC Tutor Perini Corp
PRIM Primoris Services Cp
STRL Sterling Construction
GVA Granite Construction Inc
DY Dycom Industries
EME Emcor Group
GLDD Great Lakes Drg Dock
CBI Chicago Bridge & Iron Company N.V.