Month: February 2015

Managed Money Short Gold, copper, oil update

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It is no surprise that precious metals were weak as we saw a very large position of shorts in the commercials. The large commercials have now started covering their shorts in gold and silver, so a reversal is near after about two weeks.

GLD physical stock has been very strong though. The stock level hasn’t come down. So we have support here.

 

U.S. mint sales are having a strong start in 2015.

Copper contango is now exactly at zero, so we are at an inflection point now. Copper is starting to bottom out in a few weeks.

WTI crude oil contango is flattening out and edging back to backwardation with a higher oil price coming.

All in all, things are starting to look positive again for the commodities.

Copper and Oil Contango Report

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From now on I’ll monitor the WTI Crude contango in addition to the copper contango. Because I want to know when to buy into the oil sector. Also, silver and oil always move together, which is another reason why I need to monitor oil.

Copper price is still going down as we are still moving into contango:

WTI oil is in contango and will soon reverse, with a recovery in oil. Also, 2015 could be a surprise year, where Europe and Russia will become friends again and this will have a positive impact on oil, Russian stocks. U.S. oil production is still going up, but cannot go up forever at these prices. I’m holding my hands ready on Crescent Point Energy (CPG), which gives a nice dividend of 9% and a 20% upside potential in stock price when oil recovers.

WGC issues Q4 2014 report

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The WGC issued the Q4 report today.  
Q4 demand grew from 930.0t to 987.5t (+6%).
The supply of gold in the fourth quarter shrank by 2% (from 1113.4t to 1091t).
This means that the surplus in gold is shrinking once again. And I expect supply to keep shrinking.
I still need to update the chart below for Q4 2014 when I get the chance, but at least you’ll see the trend.