Big Picture Update on Commodities & Precious Metals

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Note: I’d like to thank Slope readers and especially Slope’s distinguished proprietor for the opportunity to post for you tales of Amigos, Horsemen, mania, greed, arrogance, stupidity, fear, terror and all the macro nerd stuff within my view of markets. Happy New Year SoH –Gary

Some monthly charts of interest in the commodity sector, including precious metals.

CRB Index dwells below key resistance. A break of 200 would target around 250 in 2018.

crb

CRB/SPX Ratio shows the utter devastation of the Goldilocks era of Central Bank inflation with no apparent consequences. This is not likely to last.

crb/spx

WTI Crude Oil sits below resistance at 62-63, with a target of 75.

wtic

NatGas is a basket case non-starter. The first step would be to break the red dashed line. After that, lots of overhead.

natgas

Industrial Metals have been a favored area for a would-be inflation phase in 2018. The chart explains why.

gyx

Copper broke through resistance and turned it green through multiple tests of the 2.90 area. It measures to approximately 3.80/lb.

copper

GKX could bounce with the sector but there is no technical sign that it is preparing to do so. Our long-held support (buy) target is 240 +/- for Agri.

gkx

Uranium Participation, which holds u3o8, bounced on supply cut news but is at massive long-term resistance.

u.to

Palladium approaches all time highs. Is this a 4th Horseman? The other 3 Amigos are also riding. You may recall that in early 2013 we cross referenced a bullish Palladium/Gold ratio with bullish fundamental signs in the Semi Equipment sector to project a firming economy. Voila… and now we wait for all the happy stuff to finish up.

pall

Platinum has been in lock down since the last commodity cycle blew out in 2011. This precious commodity could be a good play for 2018.

plat

Gold stopped at the resistance that should have stopped it (that would be the gateway to a confirmed bull phase) and has inched back down the wedge. Ho hum… gold is fine.

gold

Silver is fine too, in that it has not gone anywhere yet and held the trend line (which I expect to remain the case if a firm commodity view plays out in first half 2018).

silver

Gold Miners are and have been in a process. Remember gold bugs, the sector does not distinguish itself as unique until the commodity items above eventually flame out along with the broad markets. So for now, it’s ‘inflation trade’ and this sector is not special. The ongoing consolidation in HUI is interesting though, and this will be the sector in waiting when things fall apart.

hui

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