Financial markets experienced one of the most dramatic weeks in years as sovereign debt worries triggered an avalanche of risk reduction. The Euro remained under pressure all week as the market viewed the Greek bail out with scepticism and renewed selling pressure on southern European government debt and banking stocks followed. Investors seeking a safe haven from the turmoil drove ten year government bond yields in Germany down to a record low at 2.8%. [Read more...]

Over the last few weeks we've been writing about potential macroeconomic developments, which will drive Gold in the near term and in the years ahead. We thought we'd take a break from that and focus on what we enjoy most: analyzing technicals and sentiment. We track many different things for sentiment (including public opinion, Rydex data and of course the COT reports). [Read more...]

A few weeks ago we wrote about the true cause of hyperinflation, which is a major break or failure in the bond market. It has nothing to do with demand, bank lending or the velocity of money as many have suggested. It is a confidence issue. It is not a rise in inflationary expectations but a loss of confidence in a country being able to repay its debts. As confidence is lost, interest rates rise. Monetization occurs when the cost of servicing the debt consumes too much of the overall budget, so that the government can't provide basic services or loses its ability to function on a day-to-day basis. [Read more...]

Needless to say, Thursday was nothing short of an orgasmic day for Gold bears and Dollar bulls. The precious metals complex crumbled along with the Euro, while the greenback was higher. In fact, it was such a bad day that Gold officially lost its safe-haven status, according to CNBC. This was also noted by Elliot Wave and The Business Insider. All proclaimed that Gold was no safe haven. [Read more...]

The Great Recession had quite an impact on the crude oil market, with demand and prices plunging in late-2008 and early-2009. And even though the global recovery got underway during the second half of last year, this blow to the crude oil market is going to continue to be felt for some time, as the fundamental picture remains quite weak. [Read more...]

At the start of every year we put together our best research and analysis and then formulate a forecast based on the most likely outcomes. Unlike others who simply say what they think will happen, we sit down and analyze the fundamental, technical and sentiment evidence and opine on what is most likely to happen, what might happen and what won't happen. We take a lot of pride in this, as we believe we are one of the few that puts forth actionable research and makes it available to the public. [Read more...]

The economic and financial crisis of 2008-09 was so significant that its consequences for a very long time have been dominating markets, including those of commodities. As a result, most asset classes have moved largely in sync for most of the past year, inducing unprecedentedly high correlations between, for example, commodities on the one side and equities, bonds and the dollar on the other. Indeed, market focus has so far primarily been on one common factor: the stance of the global business cycle. For commodities, this meant that the focal point became the prospects of a recovery in the global economy and, in turn, a come-back of demand for raw materials. [Read more...]

We think silver is uniquely positioned to continue its stellar rally in 2010. Valuations compared to gold remain extremely attractive, demand from the investment community is robust and the metal's industrial demand will rise as the global economy recovers. Our base case is that silver has potential to trade well above $20 in the year ahead. [Read more...]

Gold prices surged higher in 2009 as part of broad commodity rally and USD decline, culminating in a classic parabolic advance in October/November, followed by a 10+% collapse in December. Given ongoing concerns over sovereign and corporate debt burdens globally, we think gold prices are most likely to remain relatively elevated, and we do not expect gold prices to see much below the $850/900/oz. level. By the same token, we anticipate an extremely benign inflation environment in 2010 together with a broadly stable, though relatively weak, USD, which should work to limit gold's upside to the $1200/1250 zone. [Read more...]