Category Archives: Commodity markets

Benefiting from the financial crisis: gold and US Treasury bonds in 2008

We continue to research how the financial markets moved amid the subprime-loan crisis in 2008. In the previous article, we illustrated that the fall of the US house prices had actually warned investors several months before the stock markets collapsed.

Many asset classes suffered from the crisis. In such a situation, bonds and commodities are sometimes the keys to benefit from the adversity.

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Lord Rothschild buys gold, says low interest rates are ‘the greatest experiment in the history’

RIT Capital Partners published a half-year report for early 2016, in which Jacob Rothschild, the chairman of RIT and the head of the Rothschild household of England, explains his investment view for 2016.

Continue reading Lord Rothschild buys gold, says low interest rates are ‘the greatest experiment in the history’

The break-even point of the US shale oil industry and its production decline

The earning releases of the US shale oil firms have been published in May 2016, whilst the oil price is rebounding from its bottom. The following is the chart of the WTI crude oil futures:

2016-5-30-WTI-crude-oil-weekly-chart

Then, how are the financial situations of the US shale oil industry? Would the financial results justify the recent rebound?

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George Soros buys gold and a gold miner, short sells S&P 500

The Form 13F for the first quarter of 2016 has been published, and the portfolios of hedge fund managers revealed.

In the disclosure, Mr George Soros’s Soros Fund Management appeared to have started positions in gold and a gold miner and also to have continued short selling of US stocks as he claimed in Davos in January 2016.

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The oil prices rebound will not last: US shale industry still far from bankruptcy

The crude oil price is surging even after the disagreement in the oil producers’ meeting in Doha, but it will try its bottom again soon. The only thing that has changed in the oil market is the price, and the long-term oversupply of oils would not change as nobody is willing to cut their production.

2016-4-29-WTI-crude-oil-middle-term-chart

In the long-term chart, the oil price seems just trying to recover after a radical fall. Is this so-called a dead-cat bounce? We presume so and will explain the reasons.

Continue reading The oil prices rebound will not last: US shale industry still far from bankruptcy

Short selling crude oils on the Doha meeting: an output freeze would not change oversupply

The oil price is surging as investors expect the oil producers’ meeting in Doha on 17th of April could stop the oversupply of oils, and so the WTI crude oil price is now trading in $40s. This could provide a very good opportunity for investors to short sell.

2016-4-13-WTI-crude-oil-chart Continue reading Short selling crude oils on the Doha meeting: an output freeze would not change oversupply

WTI crude oil price forecast 2016: shale oil industries’ bankruptcies and OPEC’s production cuts

As we have been analyzing the crude oil market from several aspects, we would like to summarize our predictions in this article.

The oil price has been tumbling since 2014 due to the oversupply by the US shale oil industry. The following is the chart of WTI crude oil futures:

2016-3-22-WTI-crude-oil-middle-term-chart

The shale industry has made it possible to extract oils that could not be extracted in a conventional way, and consequently the supply of oils immensely increased. Now even oil tankers are used as storage.

Continue reading WTI crude oil price forecast 2016: shale oil industries’ bankruptcies and OPEC’s production cuts

Gold price will go up to $2,000: the Fed’s rate hikes, the currency war and the secular stagnation

The currency war, the market turmoil and the secular stagnation will make the gold price skyrocket to $2,000 in 2017 or 2018.

In Jan, 2016, we predicted the turnaround of the gold price, and since then gold has indeed rebounded from its three-year bear market as you see in the following chart of the gold price:

2016-3-3-gold-chart

The timing of our prediction was perfect. Investors finally realized three or four rate hikes in 2016 are practically impossible, and the secular stagnation will keep the US and global economy in need of financial easing. In addition to it, there are several facts for which we can be bullish about gold.

Continue reading Gold price will go up to $2,000: the Fed’s rate hikes, the currency war and the secular stagnation

Shale oil companies’ earnings releases predict the crude oil price in 2016

After the radical crash in 2015, the WTI crude oil price has been trading around $30s, and many try to forecast how long it will remain low.

The prospect of the crude oil price depends on the two factors: the OPEC and the US shale oil industry. Whilst the OPEC now tries to cooperate to freeze production, Saudi Arabia is still unwilling to cut its output.

Then what about the US shale industry, which Saudi Arabia tries very hard to kill? They surely have larger costs for production, and then it would be them that would die out if low oil prices continue.

The shale oil companies published their earnings releases in February, and this article is examining the results. Are they cutting production? Are they close to bankruptcy? These factors will be necessary to know in order to foresee the future of oil prices.

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2016 Gold price forecast: gold will be a boom when the Fed ceases rate hikes

After writing about the US economy and the oil price forecast, this is finally about the main issue: gold. The gold will be a boom in 2017, but the question is when to buy gold in 2016.

2015-12-26-gold-long-term-chart

After the mortgage loan crisis in 2008, as the Fed started quantitative easing, the gold price once reached $1,900 in 2011. However, as the Fed stopped the QE in 2014 and started raising interest rates in 2015, the gold price has been radically falling.

Continue reading 2016 Gold price forecast: gold will be a boom when the Fed ceases rate hikes