Daily Close | Forex, Metals, Oil, Agriculture November 30, 2020



less General Comments: Cotton closed higher after testing recent highs made about a month ago. The market in Russia has remained high on limited supply as farmer hold the Wheat back due to the drought. Reports indicate that some Cotton could have been damaged in Georgia and the Carolinas and into eastern Virginia due to the excessive winds and rains caused by the hurricanes. In the overnight electronic session, the March corn is currently trading at 433 which is ¾ of a cent lower.
less General Comments: Winter Wheat markets were higher with HRW futures leading the way. Overnight News: The southern Great Plains should get dry weather.


If a currency as large and widespread as the US Dollar is going to drop in value, then, relatively speaking, other currencies would have to rise in value. Lower dollar translates directly to higher gold prices: Gold’s latest pause will refresh The recent weakness in gold has surprised many investors but it shouldn’t. In a world where every basis point matters as does every dollar of margin, this discrepancy in profitability not just commendable, it deserves a premium multiple.
In the cryptocurrency world, market valuations for bitcoin were “going parabolic” and rising to new records (above $19,600) against the U.S. dollar. Soon, the supply of dollars is likely to increase further with the expected stimulus package, thus negatively affecting the price of the US dollar. Another piece of evidence that is consistent with the behavior of bond yields is the falling value of the U. S. dollar. Arguably, the strong rise in America’s deficits make the dollar less attractive overall.
Also, the weak dollar outlook will help EM after the pandemic. Now is the best time to long both AUD and NZD against the Dollar. For the past 10 years or so, AUD and NZD have been depreciating against the Dollar. We might soon realize a revolutionary fight back for AUD and NZD against the Dollar. The combined result of these factors is now pressuring the US dollar lower. Monday morning, November 30, 2020 it is costing right at $1.2000 to purchase one Euro.


Peter said if the price of gold doubles in five years – a conservative estimate in his mind – you could see a five-fold increase in gold mining stocks. Note: The production per gold equivalent ounce does not include the pre-commercial ounces from Barnat (13,000 Au Oz), included in the gold production above for the Canadian Malartic mine. GDX tracks the NYSE Arca Gold Miners Index which itself seeks to track the general price performance of gold miners. Kinross Gold is tightly related to the gold price and will drop in correlation.
For example, when gold rallies by around 15-30%, there’s a fairly strong trend in which GDX has historically delivered stronger performance than gold. Source: Bloomberg Many gold bulls own gold because they believe that the buying power of their respective currencies is declining as governments around the world binge on debt. In November, as the VIX index moved lower, so did gold: Source: Bloomberg Market watchers and trend followers have already begun to get bearish on gold.
Source: MyAlgoma.ca The Canadian Wesdome Gold Mines Ltd. (OTCPK:WDOFF) [TSX: WDO] is a small gold producer focused on Canadian assets, which provide some peace of mind for investors. Source: Company Presentation Wesdome Gold Mines Ltd. is a great small gold producer with great potential. Gold’s daily columns (columns P-Y) showed that gold fell out of alignment 13 days ago. Use the latest weakness in gold to your advantage and back up the truck on gold (GLD).
Buffett has established a position in Barrick Gold (NYSE:GOLD) recently. The answer was still gold — gold stocks.
As I have explained many times in the last few months, I expect the gold price to retest $1,750 per ounce before the end of the year. The company has no long-term debt (including short term) and a great cash position that should be growing with gold price between $1,800 and $1,900 per ounce. Revenues climbed 20.2% year over year to $1,131.3 million on higher average realized gold prices, which were $1,908 per ounce. The average realized gold price was $1,908 per ounce this quarter, and it had a significant impact on the bottom line.
The gold price for Q3 averaged $1,914 per ounce with an AISC of $1,047 per ounce. Source: Author’s calculations of LMBA and Yahoo Finance data Put simply, there is a very strong correlation between gold price changes and the changes in GDX. Also, gold production per mine was up sequentially after some weakness the preceding quarter due to the COVID-19 restrictions.


The oil trading portfolio is designed to take advantage of short-term long/short oil trades in the market. But for the oil market, the physical market has in part priced in some of the 3-month extension already. The slow recovery of the oil demand combined with the slow unloading of the onshore and offshore storage is the key driver of the anemic H1 2021 market. The physical oil market has already front-runned the prospects of an extension, so any disappointment from OPEC+ will hit the timespreads right away.
This is what the pro-forma entity looks like and as you can see, despite the dilution, the company is still very cheap if oil prices go up. Source: Bloomberg, company filings RBC has one of the lowest exposures to oil and gas, transportation and retail in its peer group. Logically, while almost never certain for OPEC+, it makes sense to extend 3-months as it guarantees continued storage draws into Q1 2021, which would further support oil prices.
So this transaction basically gets the banks off its back and allows it to fight to see higher oil prices. The oil market conditions continue to improve in the future. News that the broader, OPEC-plus group is struggling to reach an agreement drove oil prices down. The only question is how much will Saudi Arabia be on the hook for, and when will algos realize all of this, sending the price of oil sharply higher. In 2021, oil demand will increase by 5.9 million b/d or 98.8 million b/d.
In this particular OSP announcement, Saudi Aramco cut oil pricing to both Asia and the US but raised it in Europe. Now as for Kazakhstan, we don’t know what is going on there other than that the country wants to start producing more oil. The oil demand is growing but again very slowly. We launched our oil trading portfolio in 2019. Taking all the above into consideration, I believe that the company is well-positioned to weather a weak H1 2021 tanker market. Regarding the second pillar, management made debt prepayments of c. $92 million or $0.54/share reducing the company’s leverage at c. 30% or just c. $18 million per vessel.
Looking into 2021, the tanker market is forecasted to be weak for the first half of the year and start improving from H2 2021 onwards.
It is worth noting that DHT follows a flexible dividend policy aligned with the cyclical tanker market.

United States

Salesforce trades at an overweight valuation due to the performance of the Nasdaq and technology stocks this year but the recent emergence of vaccine candidates could impact this rally. ZM Weekly TTMBuoyed by this impressive performance, Zoom shares have emerged one of the best-performing NASDAQ stocks this year, gaining about 600%, taking Zoom’s market cap to $134 billion. We advised to add risk just ahead of the US elections, and see the recent encouraging market momentum carrying over into next year.
That kind of growth could make the San Jose, California-based company one of the largest producers of growth among NASDAQ 100 companies in 2020. The switch to an “at-the-money” option writing strategy ups the defensiveness but the fund could still get whipsawed in a bear market. Source: WSJ Recent trend shift to Value stocks slowed the Growth rally in the US, but the picture is entirely different for emerging markets. Unfortunately, higher levels of debt continue to retard economic growth keeping the Fed trapped in a debt cycle as hopes of “growth” remain elusive.
Perhaps some initial safety data if the US study is well underway by the time NVAX might submit positive efficacy and safety data from the UK and South Africa. Wall Street Democrats, meanwhile, which has seen approximately $259 million in paid advertising booked so far on both sides of the aisle, according to AdImpact data ending Friday. Investors need to decide whether the Nasdaq can hold its lofty valuations when a vaccine rolls out and we see a potential rotation back to physical offices.
Secondly, the US FDA might be slightly more willing to provide Emergency Use Authorization (EUA) even in the absence of large amounts of US data. This, however, came in sharply ahead of Wall Street’s consensus expectations of $202.0 million, which would have implied a much steeper -23% y/y drop. Salesforce stock has been under pressure since the 1st September high at $284.50, which was also a high in the Nasdaq.
The Fed’s purchase activity drew in a lot of retail interest, which should help support prices in the medium term. On behalf of all Trump voters, I say Investing.com Follow Business Development Companies (BDCs) are appealing to investors seeking high dividend yields and added diversification. As shown, since 2009, inflation has consistently run well below the Fed’s target. Though the Fed generally stuck to investment-grade bonds, it also dabbled in junk bonds.
We have negative real rates in the US, the Eurozone and virtually every developed economy around the world.
After this year’s rally, Zoom is now worth more than 140-year-old International Business Machines (NYSE:IBM) and the high-flying chipmaker Advanced Micro Devices (NASDAQ:AMD). Language in the company’s press release appears to indicate some slippage of the timeline regarding the start of the US phase 3 study of NVX-CoV2373.


Brexit, combined with the UK and US economies shrinking in 2020 with low growth in 2021, will cause a reduction in earnings. Banks in Germany in particular responded to the ECB’s call not to pay dividends.