Daily Close | Forex, Metals, Oil, Agriculture September 11, 2020



About half of the Argentine Wheat belt is too dry and wire reports indicate that production in the worst areas could be 50% of normal. In 2019, Campus Reform also reported that General Comments: Wheat markets were higher as Black Sea prices have been firming. Spring Wheat was developing under good growing conditions in both the US and Canada. Soybeans are trading at almost $10 a bushel, up from about $8.50 in March.


Source: Bloomberg The Dollar rallied for a second week in a row Source: Bloomberg Cable crashed this week – worst week since March – amid Brexit anxiety… It worked, but the company now has to earn more on a dollar basis to create the same amount of EPS thanks to the higher float. When you print money, it devalues each dollar and leads to inflation. We trade gold because it trades against the US dollar. The impact will be inflationary on the dollar. LIBOR is a standardized measure of short-term yields of dollar-denominated securities which trade overseas in what is commonly referred to as the eurodollar market.


The World Gold Council’s latest quarterly fundamental data on global gold supply and demand yet again revealed gold ETFs’ dominance. The WGC’s Q2’20 Gold Demand Trends report showed global demand being gobbled up by gold ETFs like Pac-Man! When Gold and Silver prices will rise to much higher levels than right now, even small denomination Gold coins will be unsuitable for actual physical barter. The mission of gold ETFs is to track the underlying gold price.
When ETF-share buying exceeds gold’s, share prices threaten to decouple from gold to the upside. Major gold ETFs are becoming the global gold market. So when gold-ETF-share buying or selling outpaces or lags that in gold, ETF-share prices will decouple from gold’s and fail their tracking missions. But in the short term, I also do not see a strong driver for the rise in the price of gold. There’s no doubt gold prices would’ve fallen hard last quarter if it wasn’t for that epic gold-ETF-share demand.
While Gold Eagle sales continue even higher during August, the real explosion took place in the Silver Eagle figures. If there are more fireworks in the market, Gold Eagle sales quite possibly could reach one million for 2020. Stock traders’ demand for gold-ETF shares was so extreme that the physical gold bullion these ETFs had to buy skyrocketed 470.5% YoY to 434.1t! The sole bright spot in worldwide gold demand last quarter was gold-ETF buying. Excess supply or demand of gold-ETF shares has to be directly shunted into underlying physical gold, on a near-real-time basis.
From Q1’20 to Q2’20, total global gold-ETF holdings surged 13.7% sequentially to 3620.7 metric tons of physical gold bullion. It will be interesting to see how the demand for both Silver and Gold Eagles continue for the remainder of 2020. He is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the gold market. You’d think gold demand would explode in that kind of extreme anomalous environment, right?
Later on in 2008, he began researching areas of the gold and silver market that, curiously, the majority of the precious metal analyst community have left unexplored. According to the WGC, which gathers the best available data on gold’s fundamentals, Q2 global demand was actually weak.


On September 8, 2020, U.S. oil companies Exxon Mobil (NYSE:XOM) and Hess Corp. (NYSE:HES) indicated that they had made two more oil discoveries offshore Guyana. The FPSO will be spread moored in water depth of about 1,600 meters and will be able to store around 2 million barrels of crude oil.” But I recommend trading short term the stock frequently and use at least 30% of your position due to extreme oil price volatility and risk of a dividend cut. It made the 16th oil discovery northeast of the producing Liza field at the Uaru exploration well.
However, if oil prices can regain some momentum later this year with increasing demand, I see XOM crossing the resistance and retest $41.50-$42.25 and eventually $48-$49. The rebound in WTI crude oil from $12/bbl. Exxon Mobil, through Esso, has already contracted four drillships, mainly from Noble Corp.: Furthermore, such a deepwater project needs a floating, production, storage, and offloading (“FPSO”) vessel.
On January 27, 2020, Exxon Mobil increased its estimated recoverable resource base in Guyana to more than 8 billion oil-equivalent barrels.
The Uaru encountered approximately 94 feet (29 meters) of high-quality oil-bearing sandstone reservoir. The vessel is called Liza Destiny, moored on-site.

United States

Current swap spreads in the US are very low, while spreads in the Eurozone have clearly moved into “healthy” territory after spending many years in not-so-healthy territory. Looking at the graph above, the Dow has hardly ever underperformed the Nasdaq over the following two years when something like it happened before. I worry, however, that the Fed wants the inflation rate to be higher, and I’ve learned to never doubt the Fed’s ability to get what it wants.
So, moving people from one line of work to another, the thing that must be done, tends to be done better in the US than elsewhere. In fact, the Nasdaq 100, which is the strongest index, is testing its 50 DMA line for the first time since the uptrend began in late March! The y-axis is the outperformance (if positive) or underperformance (if negative) of the Dow Jones against the Nasdaq over a forward-looking period of 2 years. Just two weeks ago, the Dow had been underperforming the Nasdaq by nearly 40 percentage points over the previous 24 months.
We talked last week in this newsletter about how that’s one of the most glaring gaps in both the Trump and Biden plans. One Florida poll found that Trump had erased Joe Biden’s margin and pulled even. Global governments and global central banks stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. This may explain why Trump has made marginal gains among African American voters and more impressive gains among Hispanic voters.
Just last week, Trump announced agreements in principle for Kosovo to recognize Israel and for Serbia to move its embassy from Tel Aviv to Jerusalem.” According to official data, the annual inflation rate for the US is 1%. What does history say about selling an overstretched Nasdaq and buying an underappreciated Dow? Trump has since defended that decision, saying, In January, Campus Reform reported that “In the fog of war, it’s easy to lose track of what counts,” said Tribe.
Trump has appointed 200 federal judges and two Supreme Court justices and sought to elevate constitutionalists to the federal courts. The comment came just days after audio surfaced of Trump saying in an interview with journalist Bob Woodward of the coronavirus pandemic, “I wanted to always play it down. Somehow, however, they still envision lawsuits, riots and resistance, yet they say it’s Trump they fear. In effect, the Fed has been trying to increase inflation, operating at the macro level.
The gains of a long-Dow, short-Nasdaq strategy in these cases have, historically, far outweighed the losses.


This level of rancor from Beijing is unprecedented for this issue, but Chinese state media has issued threats about Beijing’s unwillingness to tolerate a “smash and grab” deal. Beijing has just upped the ante in its latest game of tit-for-tat brinksmanship with Washington over the fate of TikTok’s US business. In the long run, we expect Beijing Enterprises Water Group to be our main competitor.


The EU is dealing with Brexit and is upset with charges that Putin may be behind the poisoning of a domestic political rival.