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Breaking out to the upside on some (finally) yen strength.


A lot of things different this year than last, not the last being the crude oil death spiral. But fwiw, gold was the tip last year that some serious money was going to come back to the commodity sector for the new year and the sharpest CRB rally in history proceeded.


'Course gold is different here , too. In '13 it had been the worst performing asset and suffered from extreme liquidation into year end before some folks reloaded. This time it is set to finish the year near flat.


I guess it is far from inconceivable that a sharp crude correction could come at any time, etc., etc. although I don't see a replay of last year's fierce commodity run as highly likely.


As I've said, all things being equal I'd expect grains to be among the least to benefit as they'll be swimming against some rebalancing having been the best performing subgroup in the last quarter.


Doesn't mean a tide wouldn't help them, though.


Anyway, a correction in the dollar bull/commodity bear seems quite possible here.

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Re: gold

Interesting action since. After the surprising pop above the consolidation on Tues they sqaushed it back on Wed- not at all surprised the boyz would be protecting year end bonuses. Down hard again this AM on more dollar strength then back up on weak data. We'll see.


USD and particularly USD/Yen is the key to all the carry trades. Currency moves are long in the making- dollar really "should" have started higher earler- and long in the running once they get going. I think the dollar run is far from over but sentiment is reaching historic extremes and a setback seems likely to me.


Could also be that oil just keep dribbling into the drain pan and takes everything with it.


Again, don't see the grains as the largest beneficiary as they were already bucking the trend.


Interesting here as to whether the surprising bounce in grains since OCt can be sustained with farmer holding. The structure of things is different than it used to be- fewer farmers with a stronger financial position and more bins. I guess I can see the possibility that buters may end up a bit disappointed with first of the year movement.


But given  more or less trend yields globally then stocks are set to continue to build. Or there is a serious threat to production, somewhere, sometime. Otherwise all we've got is a privatized LDP system to buffer the effects.



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Honored Advisor

Re: gold

Great comments Noxie.


Alot of those new bins are owned by folks that haven't stored much over the years. Are they smart enough to sell the carry and fix the basis on basis strength and avoid getting hammered on the other end? Some are....some not so much.


The new system could make for low prices in June or July during a panic dump.


Silver is a far safer investment than gold just because the retracement has been picture perfect at 75% of the range. Just a great TIME to invest in something that is not paper and is not making new highs. We aren't momentum investors, rather we are contrarian's so Silver clearly has to be on the agenda for 2015/2016.

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