Is $40/barrel for crude back on the table?
Doc and I focus on crude oil today. The technicals have turned negative and the fundamentals continue to show an oversupplied market. This higher trading rage is in threat and looks very possible to break lower in the coming weeks.
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its the 3rd time pd has got to about 800 since 2010, until it heads further up I dont see it being a big deal, looks like a 600-800 trading range to me.
pt has dropped from just ab0ve 1900 to below 100 today, kinda like gold, just not very exciting other than bounces and shorting.
course from below 900 to just about 1900 might have been worth peoples time, but that ended in 2011.
i mighta bought at 100, but I ment 1000.
I am looking at rhodium. Hit $10,000 in 2008, went to around $1,000 then dropped further to under $700, actually under $600 in August 2016 (-94%) and has now rallied to 910+. The platinum : palladium ratio is also unusually low with Pd catching up with Pt to a great extent right now. Pd $80, Pd $966. Interesting how rhodium is many times rarer than platinum but is about the same price. Says something about the silverbugs who think that because only 10x as much silver is mined as gold the Au:Ag price ratio should be 10:1. Nope!
Oil should head to 43 but likely lower after a bounce. XOP is hanging by a thread at $35 and could go much lower to near 30 to 32.
Price of energy is the only positive in the US economy.
Hey Doc, Michigan had they’re chance; sorry. Maybe next year.
They had a lot of fundamental basketball mistakes that they probably wish they could have back.
You mentioned that low oil prices were good for Gold producers – absolutely true since energy is a major mining cost and has an important effect on net price per ounce taken out of the ground. Having said that, when oil was hovering above $100 a barrel, the precious metals equities were getting hammered because their costs were not only high, but the market was fearing and anticipating potentially even higher energy prices. Well here we are today with a decimated oil price that should be having a hugely positive impact on the equities (even with a lower commodity price) and yet – in my estimation – there has been virtually no properly correlated benefit to the mining stocks based on this key fact. So here is the reality : when input costs are soaring then equities suffer, and when key costs collapse the equities do virtually nothing. The market is a joke.
Bob Hoye talks about it and calls it his measurement of the real price of gold, considering a commodity index as a proxy for inflation. However his model doesn’t take into account the wage costs, etc in mining. You could probably model it by taking the current gold price and have a commodity index, the currency in the area where the gold is mined and some sort of CPI inflation index in the formula to give a gold profitability index.
I can’t be bothered. I am sick of doing my inflation modelling now because it’s been a waste of time.
I think CPI is going to have its little mini spike as of now and then decline back to somewhere near 2% by end of year. Not too exciting for inflation expectations for goldbugs – and if Fed raises interest rates again, real rates might rise quite a bit towards the end of 2017 barring an economic accident.
I’m not worried about real interest rates going materially positive for any significant length of time, if at all. Price inflation will lead the Fed’s rate hikes just as it did in the 1970s.
Serious stagflation is on its way and most of the world will be impacted negatively.
There is significant chart resistance for oil at around $62.50 from the mid 2015 rally and there has been no sign of oil going up to test that anytime soon.
Doc’s statement that oil is still in the range from $26 to $55 is potentially bearish! I wonder if he is wondering if there is going to be a retest of the lows?
Silver, I don’t believe oil will get that low again—-possibly 35-40 but not much lower.
Doc kinda disappointed in your forecasts ever changing……. not long ago you were cheerleading oil $60 end of 2017 and possible $70 2018!
Dave; first of all I don’t remember any “cheerleading”—I remember Cory asking me (and this was months ago) how high I thought oil could move up to when it was lower and I said possibly $60 this year. Well, it hit $56 as its’ high. I might add I did not repeat the $60 figure over and over and so I wouldn’t call it cheerleading. I don’t remember the $70 figure for the end of 2018—if I did, we still have about 21 months to go so that possibility is still there.
I might add that Cory asked that on the spur on the moment and I did a quick look at the chart and said we would be lucky to hit the $60 figure. I did repeat that oil was not going significantly higher for a long time—that I was “cheerleading”.
Doc, I hear that I.U. would have to pay UCLA 26 million to break Alford’s contract, so send in your resume.
Thank for the info BB; I know now I have a chance and am probably in the top 3 for consideration.
Good luck Doc. I doubt that Knight would go back for any amount of money, so your chances are good, although my source may be wrong about Alford’s contract even though he does have a Ph.D. from I.U. in economics in ’73.
Thanks for sharing your thoughts on gold. Regards
Real Madrid Tröja
You guys don’t watch PT, Pd, do you!