Gold moving higher is telling us a different story from the oil and copper rebound

July 7, 2020

Joel Elconin is with me today for a look at markets and metals. We start with the comments from Chinese media that was very market supportive/bullish. This was benefiting the market through most of today.

We then move to the metals sector. Gold continues it breakout while oil and copper have rebounded very strongly from the March lows. These assets are telling two very different stories when it comes to the expected economic rebound.

Click here to visit the Benzinga website and listen to the recording of Joel’s Pre-Market Prep Show.

    Jul 07, 2020 07:47 PM
    Jul 07, 2020 07:54 PM

    Rick Rule on Royalty Companies:

    Jul 07, 2020 07:58 PM
    Jul 08, 2020 08:28 AM
    Jul 08, 2020 08:55 AM

    Well……..Gold looking good again this morning….WED……early morning….$1804….

    Jul 08, 2020 08:56 AM


    Jul 08, 2020 08:07 AM

    Extremely important that everyone listen to Brady on Palisade. He makes some excellent points as to why there could be one major downturn before PMs really take off this fall. Now, seems like everyone else is on the same side of the boat.
    Would love to hear some comments from Matthew and Ex. Luck to all.

      Jul 08, 2020 08:37 PM

      Brady made it easy for me to agree with him by defining the short term as the next 2-3 months. He is right about the overbought charts and right to single-out the very overbought monthly chart but he should have also taken a look at the quarterly and yearly charts. They are also overbought but much less so and their indicators, especially the quarterly, very much support the potential for much more upside well before his 2-3 months are over.

      Having said that, I have to point out that the risk of a surprise pullback is high even in what I call short term (days to weeks). Today’s action sure helped to reduce that risk but now we need follow-through tomorrow and a strong weekly close.

      I recently said that silver looks much better than gold and that remains the case, which is a good thing. Gold is going to get support from silver and even the miners for a change. In fact, gold is in crash mode versus the miners and gold priced in XAU has plunged below the 600 week EMA for the first time in 13 years…

      To be clear, I agree that a big pullback is coming but it will probably start from 1950 or 2000 and possibly significantly higher if there’s a perfect short-covering storm. As mentioned recently, we already have action that we haven’t seen since gold went straight up in the late 1970’s.

      In any event, gold is high enough right now that the miners should start to outperform it dramatically and more consistently as long as it doesn’t crash. Today was probably a good example of what to expect as GDX went up about 5.5 times as much as gold on a percentage basis.

        Jul 09, 2020 09:14 PM

        Thanks Matthew for taking the time to provide your thoughts……..much appreciated.

    Jul 08, 2020 08:24 AM

    Ditto Jerry

    Gold on the move. $1820-$1840 target hit 😃

    I will soon post again new targets.. we may sit in this range for sometime. Move into $1830-$1840 should come by Friday.

    Good luck to all!

    Jul 08, 2020 08:36 AM

    I disagree with the assertion that gold and copper are sending conflicting signals but it’s a common mistake to think that copper should do well when the stock market. Although the two tend to move in the same direction in the short term, they do not share larger uptrends and downtrends. Look closely at the following chart and you’ll see what I mean:

    The fact is, copper/commodities in general are highly correlated with gold, not the stock market when it comes to the larger trends (spanning years). Copper peaked in early 2011 before either gold or silver and performed very similarly in the years since. It (and commodities in general) declined significantly while the stock market went up significantly. So, when copper breaks out, it confirms gold in the same way that silver confirms gold and indicates that we are in for an inflationary bull market in the entire commodities complex (including the monetary metals, of course).

    Jul 08, 2020 08:37 AM

    Just wanted to add one more thing regarding my above post! In real time as I always tell everyone in here, $1829.65 that was hit in futures “may” have been a short term top which would mean I hope the short term traders trimmed a bit at this highs. If this is the case we have hit a short term high and correction will proceed for multiple days in choppy fashion. However I think we go up into Friday or tomorrow and hit the $1840 or slightly under or over and than correct for multi day. This move in miners and fold has been fantastic.

    Jul 08, 2020 08:43 AM

    What is Bonzo buying today? Just bought more NUGLF@.097 and am ready to buy more if it drops. Maybe I should ‘ve bought more safe royalty companies as Rick Rule advised, but I decided to swing for the fences as Doc always urges us to do.

    Jul 08, 2020 08:16 PM

    Price was strong today…….held up well………..jmo…..