by Adrian Ash on October 23, 2009
The little-known state of the gold market as prices close at a new weekly high…
YOU WON’T read it in your Sunday paper, nor elsewhere online this weekend. But this autumn’s gold rush has, in truth, been no such thing at all.
No one’s actually buying gold right now. Not the physical metal (and not the exchange-traded trusts either)…not at anything like the rate they were buying a year or six months ago. Instead, this rush differs in kind from the surge of autumn ‘07 or the panic of late ‘08. Because it’s a rush solely in leverage.
Hedge funds and prop desks have been buying gold futures and options with virtually free finance. Hence the surge in stocks, bonds and commodities too, of course. Because anything traded on margin looks a safe bet when finance costs you 1% or less per year. And especially when your major funding currency – the long mighty but now tired and emotional Dollar – is universally condemned to fall further.
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by Gabriel Andre on September 3, 2009
In parallel with the stock markets, the commodities rally has reached its peak as the CRB Index posted a recent high at 269.18 points during the first fortnight of August. Actually the commodities benchmark has already retraced slightly as its current price is 249.63. That’s 7.3% lower than the high of August.
On the weekly chart, we see that despite the rebound generated in last March, only a small part of the huge decline occurred last year has been retraced…
An unimpressive rebound
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by Gabriel Andre on July 28, 2009
Sugar is one of the commodities currently booming. The chart is clear as the recent rate of rise is impressive and that the price objective for the bulls seems to be evident.
Sugar prices have bounced by 56% since the beginning of the year, jumping from $11.80 to $18.43 (per pound, on the New York Board of Trade).
The current bullish move is actually the combination of three consecutive waves followed by consolidation periods. On the chart, those waves are symbolized by the green segments whereas the consolidation phases occurred in the blue squares. It has been a regular but powerful rise and it is likely now that the traders involved in this move will want to push it higher.
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by Gabriel Andre on July 2, 2009
As many other commodities, wheat prices have peaked in June. A bit earlier actually: at 677 US cents a bushel on June 1st, while stock indices and the CRB index posted a high on June11 or 12.
Over the long term, we can identify several technical patterns on the weekly chart. The current one is an uncertainty triangle built by the green ascending support line and by the red descending resistance line. Those two lines are the lower and upper limits of the trading range since last October. This trading range has been narrowing for the last 9 months. The price action found some support around 475 cents in last December (point A), but some new support higher, around 500 cents, a few months later (point B).
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by Gabriel Andre on June 23, 2009
Last month, in our previous update on the CRB Index, we were mentioning that the rebound generated in late February/early March would have the 265 and 305 points as main targets (Money Morning of May 27).
The first target has actually been reached two weeks ago, and as expected a corrective move has been following. The rebound has driven the price from the low of 200.34 points (point B on the chart, posted on March 2) to the recent high of 266.17 (point C, posted on June 12). That was a 33% jump in 3 months and a half that failed to break above the first significant resistance line.
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