Looking at the daily chart, it looks like it will continue to be strong even short term and is likely to follow the path of the grey arrows rather than the blue arrows — unless gold falls apart.

http://stockcharts.com/h-sc/ui?s=RGC.V&p=D&yr=1&mn=0&dy=13&id=p10997141071&a=490413293

Spanky: At bottoms the fundaments are always bad. At tops the fundaments are wonderful.

The more people that call for lower gold, the higher the chance it will go up. Markets do whatever they need to do to hurt the largest number of investors. All you need to know is sentiment to make money and sentiment on the metals is highly negative.

Therefore we have seen the bottom.

Bob, $gold and the broader commodity complex seem utterly tied to the direction of the yen. This correlation has held up for the last 20 years.

While gold and yen are oversold in the near term, do you really see something on the horizon that will cause the yen to make a secular bottom? I sure don’t. The BoJ has already essentially committed themselves to QE infinity, unlike the Fed.

$Gold peaked against the yen in 2013 and actually looks like it is headed lower vs yen in the near term, even if this ends up just being a consolidation period in the long run. This is a terrible sign for $gold.

Meanwhile the S&P is breaking out to new highs vs commodities this week (breaking the neckline of a year long inverse head and shoulders formation).

Spanky:

The dollar is getting really tired in the tooth, the consensus is the highest of 32 commodities. Yes, it might go higher and the yen lower but markets always surprise. The guy who gets it the most right here is Mathew and i happen to agree with him.

I ignore both fundamentals and TA. Others may use them will but they are tea leaves to me. Sentiment is always right.

Bob, I agree sentiment can be a good indicator in the short run, but did horrible sentiment help the yen between 2012 and 2013? Did horrible sentiment help gold in early 2013?

Again, I acknowledge that nothing moves down in a straight line and there is bound to be at least a sharp short covering rally someday, but the only bull markets I see at the moment are in the USD and the stock market. Look at the monthly charts. They do not look like reversing anytime soon and in fact look like they are ready for bubble like explosions upwards.

Bob M, you have been getting “Bottom’s and Top’s” right for years, are you sure you aren’t a college boy. The other day Al was saying he was 37 years old again, don’t you guys know how to age gracefully? DT

Spanky:

I don’t look at charts at all. And I get it right a lot. You don’t need charts

You’re right Bob M, charts are useless if you are under thirty years and at the beach in Fort Lauderdale Florida. LOL! DT

If things get more turbulent in late Dec, early Jan and there is a sell everything freak out, then I’ll likely load up at that point in time while there is gnashing of teeth and panic selling. The last few years have been very bullish for the metals and miners in Jan/Feb/and early March. We’ll see how things set up in December.

Good Points,Excelsior
It would be a gift to get a buying opportunity like the one we had Dec-Jan.
I hold some core miners and i am still bullish long term ,(TRQ.TO had a nice move)
Thanks

Good spot on the inverse head and shoulders. But overall, this chart looks indecisive to me. The monthly chart looks toppy.

Commodities have gone through a brutal 5+ year bear, general stock markets have gone through one of their longest cyclical bulls ever.

I lean toward headfake.

This is totally under the control of the BoJ and the Fed. Do you really think they are going to allow commodities to rise vs equities at this point in the game???

Hi Spanky. I was simply pointing out that Zinc and Copper and now Lead and Nickel have been on the move, even on days where the Gold/Silver/PGMS, or the Soft Commodities or Livestock or Oil and Gas haven’t been doing as well. I understood the point you were making overall with the CRB index, but there seems to have been some expectations from the markets in the base metals the last few months (with a large part being infrastructure expectations and the electrification sector in Emerging Markets).

As for whether Zinc and Copper have gotten overbought in the short term (very possible), but longer term I think both and a few other Base Metals have more room to rise, but it should be be more gradual. The fundamentals for Zinc are getting better and better with so much supply destruction, mines that are closing or cutting back production, and the smelter interest in more Zinc sources.

This increase in Zinc & Lead prices has also not been properly reflected in the Silver miners that have nice Zinc/Lead kickers. Even if there is a pullback in some of these base metals, the related miners haven’t had the the proper re-rating, so it may start off more muted and will come down to reviewing the quarterly reports of the those companies for signs of better margins and costs.

Spanky, at some point, yes, I do think commodities will rise versus equities.

I recognize the correlation between the yen and gold and commodities. But obviously these are fundamentally different kinds of assets. The yen is in a race to zero value. Commodities and gold are not.

Spanky, in case you didn’t see this the last time I posted it:

http://stockcharts.com/h-sc/ui?s=%24CRB%3A%24SPX&p=W&st=1980-01-01&en=2016-11-14&id=p93108740618&a=484569049

To say it is totally under the control of a couple of central banks…Okay, for some indeterminate amount of time, an economy may be centrally controlled, leading to illogical, unsustainable outcomes. Eventually that fails, and markets reassert themselves. Is this not the lesson of socialism in the 20th century?

So yes, maybe that’s the path we’re on and maybe it could continue who knows how long, with a totalitarian-enough system. But I lean toward seeing a resolution of the question, in favor of commodities vs equities, in 2017.

GH – Great chart and comments. Definitely a lot to mull over on commodities versus equities and an interesting discussion to keep tabs on periodically to see how the trend may change. Thanks!

The commodity rally from 2000-2011 corresponded with a bull market in yen almost exactly. Does it look like yen is about to embark on another bull run?

No, it most definitely doesn’t look to me like the yen is about to go on another bull run.

But neither does it look bullish vs the CRB. It shows up much better on a monthly chart than weekly, so I hope you can see this:

http://stockcharts.com/h-sc/ui?s=%24XJY%3A%24CRB&p=M&st=1980-01-01&en=today&id=p45453126352

And I agree the yen and commodity bulls from 2001-2011 correlated closely. On the other hand, during the 1982 to 1995 yen bull, the CRB index trended sideways to down.

I don’t see anything written in stone about the relationship between yen and commodities.

I could be wrong on the yen. It does resemble late 1998 somewhat. I got the dollar dead wrong a few months back.