Daily Close | Forex, Metals, Oil, Agriculture August 18, 2020



It also covers the commodities market daily focusing on in-depth technical developments in GOLD, CRUDE OIL, SILVER, CORN & WHEAT.


Source: Bloomberg The dollar is back at its lowest since May 2008… What if the pound outruns the euro as the US dollar breaks down? The value of the dollar against the euro declined by almost 11 percent over the past five months. Over the past decade the company has typically grown sales some 10% a year until it is now breaking the billion dollar revenue mark. The interesting thing during this time period was that the value of the US dollar went in exactly the opposite direction.
there is a lot of positive sentiment embedded in the price of the euro, not so much in the pound. On August 18, 2020, it took almost $1.1950 to acquire one euro. On January 6, it took slightly more than $1.1200 to purchase one euro. less GBPUSD has resumed its long term uptrend with more strength expected. On the whole, GBPUSD faces further upside threats long term.


This theory holds when the correlation between VIX and gold remains positive, so that when the VIX index rises so will the gold prices. For gold investors, they understand that this is a time bomb, and they know that gold will always prevail. As long as the VIX score remains in a high level, the statistics has told us that gold prices will increase eventually. I have already explained that gold prices will keep increasing, and it is just a matter of time before it records a new high.
Moreover, the 50-day moving average and the Fibonacci retracement 0.382 ($1,840) acted as the main layer of support level for gold prices to bounce back. Certainly, the recent movement in the price of gold, taking the price to new historic highs, is evidence of this behavior. This policy will fuel strong support for gold prices to increase, as the value of currencies debased. When we turned bullish on silver back in March at a price of around USD13 we called for a doubling in prices over the next 12 months.
This has made VIX a powerful predicative tool for gold prices. If you are a buy and hold investor, I believe this correction has made an attractive offer to you, for now you can buy gold way below its value. So, will the vaccines be the catalyst for a reversal of gold prices? I have already explained that, in the long-run, gold will always prevail, and non-backed fiat currencies will ultimately become worthless at some point in time. Source: Bloomberg, Author’s calculations Silver’s rise has far outpaced that of the broad commodity complex, with the metal hitting new multi-year highs relative to continuous commodity index.
Source: Author via Trading View Whether you are a long-term gold investor or speculator, it is important to note one true fact: trend is your friend. Furthermore, we see the Tuesday morning newspapers filled with headlines relating to the movement Warren Buffett has made into the gold space. What’s interesting to us is not that we think he has any special powers to predict the gold price.
Not only gold price has been pushed into unprecedented territories, but it is also now experiencing extreme volatility. That’s great news for gold and silver! He bought a company that he expects to be geared to the gold price. Yes, we know that he did not buy gold metal.


This raises the very real prospect that U.S. gasoline demand will experience a second period of severe demand disruption before 2020 is finished. Its ability to undergo complete price recovery is being constrained by continued weak gasoline demand. These low utilization rates will reduce the U.S. supply of gasoline, resulting in equilibrium for the prices of gasoline and UGA. Although natural gas prices continue to march higher with September contracts hitting an intraday high of $2.465/MMBtu, natural gas producers have not followed suit.
Many epidemiologists have been predicting since last spring the need for repeated waves of lockdown orders that would create a “double-dip” demand dynamic for gasoline.
In fact, our latest update shows that the US natural gas storage situation has worsened largely due to falling cooling demand and rising production. U.S. gasoline demand collapsed in late March as lockdown orders were implemented across most of the country, leading to the widespread closing of schools and places of work. Investors have piled into (UGA) following the collapse of gasoline prices in late Q1, causing its total assets under management to quadruple in a few short months (see figure).
The U.S. has unfortunately failed to gain even temporary control of the COVID-19 pandemic, making it likely that 2020 gasoline demand peaked back in March. On that note, upcoming Markit PMI data set for release this Friday, August 21 could weigh materially on market sentiment and thus the direction of crude oil price action. That said, crude oil looks like it could be making an attempt at its next leg higher with prices perched around the $43.00-handle and month-to-date highs.
Crude oil price action has lacked direction as of late with the commodity trading largely sideways over the last two months. Demand destruction in the oil industry will likely persist in the short term.Cost cuts helped preserve EBITDA margins. Positive FCF could also grow CLB’s cash pile over time.CLB spiked off its lows due to the improvement in oil prices. The Consumer Price Index rose 0.6% for a second month in a row, driven by autos, gasoline, clothing and airfares, but the year-over-year rate remains a tepid 1%.
Deepwater projects are likely unprofitable at current oil prices, which could stymie Reservoir Description revenue going forward. The decline in business activity has led to demand destruction in several industries, including oil. U.S. gasoline demand has historically followed a clear seasonal trend. The spike in the shares coincided with the rise in oil prices, yet the company still faces headwinds from the pandemic.
One could argue that the LNG price ramp globally justifies Henry Hub to catch-up, but we would argue that it’s for Q4 pricing, not today’s prices that will benefit.

United States

Investment analyst working within one of the Big 4 Wall Street banks covering a wide range of stocks from consumer and retail to healthcare sectors. Even so, commodity prices have not performed as robustly as the US stock market in recent months, one reason being the slow pace of the global economic recovery. They’re spread across the US, Puerto Rico, Canada, Australia, and the UK, while management anticipates to open 20 new locations monthly for each month until the end of 2020.
However, even if the pandemic were to end immediately, and everyone was vaccinated the next day, the US still got a big bill to settle.
The Nasdaq’s march to new highs on an almost daily basis could give shares a lift to over $200 next. On March 18, 2020, the index hit its near-term low as the US economic recession began and the spread of the effects of the pandemic widened. The Trump campaign is also using Biden’s apparent decline in a new ad: What happened to Joe Biden? Source: Bloomberg Nothing to see here, move along… On the day, Nasdaq dramatically outperformed as Small Caps lagged (the un-rotation rotation is over)… And as stocks rebounded…
It proves that PAX is gaining trust in the most demanding market – the US, where Square (SQ) is the poster child, despite supplying POS to mostly retail merchants. Underlying the margins improvement is one impressive highlight: it’s the expansion of PAX’s use cases in the US. Earlier this month, DeJoy announced ‘sweeping overhaul’ which Democrats have suggested could hinder mail-in voting and benefit President Trump. The first comprehensive set of measures of national income was developed by economist Simon Kuznets who in 1934 told the US Congress the formula was problematic.
So while the US storage situation presents a more troubling outlook for prices, the DGAZ unwinding remains at center stage for frenzied trading. Joe Wallace tells us in the Wall Street Journal that, globally, assets under management in commodity funds jumped by the end of July to $570 billion. After that, concern about overall US government positions rose and the confidence in the US government declined.
In history, the US economy was built on over-spending on wars and public works, and it always had the largest budget deficit. Cut off has been abrupt as it appears the $300 in weekly benefits given out in Trump’s executive order will take time to get sent out. Here, US politicians appear to be pledging their allegiance to Fed photocopier machines and more debt… While leaving the citizens to rot. The former White House physician to Presidents Obama and Trump says ‘something is not right’ with former VP Joe Biden.
PAX grew its revenue by 7.4% YoY, gaining substantial market share in the US (up 35% YoY), Europe (up 17%), and APAC (Asia ex-China, up 47%).


Given Gazprom’s clean energy vision, its involvement in the EU hydrogen strategy publication, as well as potential pilot projects in Europe on turquoise hydrogen, are key positives.