Daily Close | Forex, Metals, Oil, Agriculture August 21, 2020



It would result in a stronger value for the dollar vs. the euro, and other currencies, in the dollar basket. Precious metals prices saw weakness on early strength in the dollar index, although the dollar faded during the afternoon. The two followed each other tightly, which would suggest a further dollar rally would be bearish not just for commodities but likely the risk assets like the NASDAQ 100. Source: Bloomberg The yield curve flattened notably this week (after last week’s huge steepening) Source: Bloomberg The dollar ended the week unchanged after a big roundtrip…
One would think, in an environment where the economy is “improving,” and the dollar is “tanking”, oil prices would be soaring. Ride out volatility caused by profit-booking, increasing business risks, elections outcome, potential U.S-China trade war, and the possibility of new business disruptions linked to a declining dollar. However, a quick perusal of the major torrent sites reveals that everything the big media companies want you to pay top dollar for is still available.
The dollar index actually does have a reasonable chance to strengthen after falling sharply, which in large part has helped to fuel the massive risk-on rally we have seen. But has failed to break out of a technical range, and should the dollar strengthen further, copper is likely to continue to trend lower. I’ve been very clear in recent posts (here, here and here) that this weak dollar wave was being exploited for political advantage as much as anything else.
There is good reason to believe the dollar can strength, too, given the terrible PMI data in Europe today. Overvalued money (the dollar) drives undervalued money (bitcoin, gold) out of circulation. Because the dollar is still the U.S.’s most powerful weapon and the Fed will move to defend it for as long as it can. We’re on the million dollar yacht,” Mr Bannon joked, before later clarifying that they were co-hosting the event in Sunland Park, New Mexico.


Dec. gold and Sept. silver on Thursday extended Wednesday’s sharp sell-offs of -2.13% in gold and -2.62% in silver. So I couldn’t wait to see how the mid-tier gold miners actually fared operationally and financially last quarter, whether shutdowns or high gold prevailed. Mid-tier gold miners produce between 300k to 1 m ounces of gold annually, more than smaller juniors but less than larger majors. So many gold miners couldn’t fully capitalize on the phenomenal windfall of the highest quarterly gold prices ever seen.
Source: Bloomberg Gold closed back below $2000.. Also, long silver positions in ETFs rose to a new record high of 893.743 million troy ounces last Friday. These larger GDXJ stocks include some of the best-performing gold and silver miners in the world. But many gold miners around the world were forced to shutter for weeks or months on end by governments’ Draconian national lockdowns to slow COVID-19. To put it simply, there’s a lot of buying pressure in both the silver and gold markets right now.
Source: Bloomberg Copper outperformed on the week, gold and oil ended around unchanged with silver gaining modestly.. The mid-tier gold miners in this sector’s sweet spot for upside potential have had a spectacular run since March’s stock panic! Last quarter was a strange one for the gold miners, with powerful bullish and bearish forces warring. less You’re going to hear increasing commentary about gold and silver being speculative bubbles.
Gold and silver, long term, are bullish fundamentally. Gold you can’t spend in the real world is, in effect, no more a ‘real’ money than a ‘digital’ bitcoin you can’t spend in the real world.
(Video length 00:08:56) Phillip Streible joined LeFonti TV to talk about Gold’s recent volatility, its current risk range, the energy markets, lumber prices, and much more this morning. Their unique mix of sizable diversified gold production, material output-growth potential, and smaller market capitalization is ideal for outsized gains. Long gold positions in ETFs on Aug 6 rose to a new record high of 3,388.41 metric tons (data since 2002).
That spawned an epic maelstrom of fear that sucked in gold and thus its miners’ stocks. If they were then the Pirate Bay wouldn’t still be a thing and gold would still be $35 per ounce, per the Bretton Woods agreement. It has evolved to be dominated by mid-tiers, miners yielding quarterly gold output of 75k to 250k ounces.


Source: HFIR The number one source of the heightened volatility will be an absolute lower level in US natural gas production. Natural gas is back at it again being the widowmaker that it is. Due to the shelter in place orders starting in March of this year, gasoline production took an unprecedented hit, not even comparable to the 2008 Great Financial Crisis. Additionally, we have seen weakness in other assets such as oil, which has gone nowhere since June 23, trading around $42.
Oil is down factionally, both WTI and Brent, which further nipped the prices of oil stocks. Let’s look at the first graph provided by the EIA: finished motor gasoline. The victory is part of the group’s campaign to force Harvard’s $40 billion endowment to end its investments in oil-and-gas companies. Oil demand rose in July. Unfortunately, gasoline is just one of the refinery output products. Instead, it is the opposite, with oil flatlining. This is a logical consequence of the restrictions under the OPEC++ deal.

United States

In 2016, Ms Trump voted for Hillary Clinton for president and she said she will support former Vice President Joe Biden in the 2020 US election. “As everyone knows, President Trump has no involvement in this project and felt it was only being done in order to showboat, and perhaps raise funds,” she said. One Wall Street analyst said Culp’s new contract eliminates one uncertainty for GE investors, and Culp’s turnaround efforts were working prior to the COVID-19 outbreak.
She said that Mr Trump’s re-election would be “the end of the American experiment” and that people continuing to support her uncle for another four years is “unthinkable.” This is to stop and intimidate people that have President Trump’s back on building the wall,” he said. Trump administration officials have yet to clearly explain under what federal authorities the law enforcement personnel are operating, other than to cite statutes allowing Washington to protect federal buildings.
On Wednesday, US President Trump said that the tech giant Oracle would be “a great company” to take over the app’s US operations. With a US election in November, political instability could further impact the US economy, scaring more people into the precious metals markets. Back in June, Mr Trump said if he lost the election he would “go on, do other things.” Political commentators as well as former and current lawmakers have voiced their concerns over Mr Trump’s commitment to a peaceful transference of power should he lose the election.
After the election, I think we will see a return in capital expenditures in the US and a rotation into cyclical stocks like energy, industrials, financials, etc.
Since leaving Wall Street I’ve dedicated my financial career towards studying this situation and helping people understand what’s actually happening. More interesting than that, notice how the Fed’s balance sheet has increased by around $2.7 trillion since March, to around $7 trillion. Though she paints Mr Trump as something of a victim of his father, she said the president deserves no sympathy for his upbringing.
MSNBC host Rachel Maddow admitted during an interview that she was afraid of Donald Trump attempting to stay in power should he lose the 2020 US election. During an interview with Chris Wallace on Fox News, Mr Trump refused to say he would accept the election results. Before the pandemic, the US unemployment rate had hovered around a record low for the century of 3.5 per cent. He is slated to give remarks on the subject, though he rarely focuses on federal laws and statutes – Mr Trump prefers to speak of “anarchists” and left-wing “mobs”.
The point being is that the market internals are weakening in the US, and markets around the globe are now beginning to weaken too. Donald Trump’s former campaign chairman Steve Bannon joked about fraud at a We Build the Wall fundraising event, in a clip that has resurfaced the day after his arrest.


This suggests that although the U.S. official unemployment rose more than in the EU, it could also fall more quickly, as the acute stage of the crisis passes.