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Metals Mash Up

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  • First Post: Jun 5, 2019 8:35pm Jun 5, 2019 8:35pm
Hello all,

To celebrate the completion of Meats Mine Beta, I thought I would start a new thread for myself as well as others. This thread will focus strictly on the metals trade. Full disclosure, I only recently started trading metals, other than Gold, but trading is trading. This thread will focus on:

Gold (1328.49 As of Today)

Silver (14.7951 As of Today)

Platinum (808.40 As of Today)

Palladium ( 1335.75 As of Today)

Copper (2.6214 As of Today)

I would like to keep all other markets out of this thread since they all have a place of there own. I would like to include news, rumors, charts and analysis. Please have some real data to back your opinions.

PLEASE NOTE, I have zero tolerance for nonsense. We are all adults and should conduct ourselves as professionals. There is always room for banter, fun and the like. Anyone not behaving will get the boot. We are all here to learn, share and grow. We are not here for a pissing contest. Nobody is always right. In fact, most times we are wrong. So keep yourself humble and we can all make some cash if you like trading metals.

Thanks,

- Ric
Be humble or get humbled
GOLD

Gold almost reached the February 20th high of 1346.74 but could not make it. As I stated in the XAU/USD & XAG/USD - Gold & Silver Traders Thread I closed my trade early because I did not like how price was behaving around the 1328 level. Today I was glad to be out.

Tech Side

Price was unable to reach the February High. This is the 5th time in as many years that price gets to this general area but never gets passed it. It has been locked in this $250.00 Range (25000 ticks) for 3 years which is great for swing traders.

For Long term traders and Fibonacci lovers Gold has not passed the 1400.00 mark in 5 years which just happens to be right around 0.382 of your fib from the 2011 high and the 2015 Low.

Fundamentals

Fed chairman Powell’s comments on the future redeployment of near-zero interest rates and quantitative easing likely helped Gold spike upwards. Trade tensions between USA and China also helped price this week as investors and traders leave old faithful US Index ETFs such as SPY ( SPDR S&P 500 ETF Trust) for a safe haven like Gold. The SPY had outflows of nearly $5 billion in a 1 week period while about 20% of that outflow when to SPDR Gold ETF in the same time period. The rest moved into Treasuries.

- Ric
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Be humble or get humbled
Quoting riclater211
Gold has not passed the 1400.00 mark in 5 years
I'm looking at this price myself, but more because of the resistance that's built up. It looks like we're headed there, and I'm trading with that in mind. I have no guess about breaking 1400 though, I think that will depend on what happens with trade (and maybe war).
I noticed this interesting disparity today...
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If gold is moving without the silver, I think that means the market is looking at geopolitical risk.
It's hard to argue against being long gold right now, but this recent rally started on the Mexican 5% tariff news. Trade wars and more tariff drama fueled the rally even more. Congress is pushing back, and there's a chance that these tariffs won't stick. If news comes out about Trump pulling back the tariffs, gold could fall hard and fast. It would probably at least come back closer to around the 1300 levels. I'm out of gold but that's an opportunity I think I'd jump on if it happens.
We must learn who is gold, and who is gold plated
Live All Time Return: -10.3%
Quoting EventsTrader
this recent rally
You're talking about the one that started May 30? If so I like the thesis.
Silver

Despite this weeks 4% up swing, Silver continues to slide further from its February high.

Tech Side

Silvers woes continue as this weeks up swing was most likely Shorts cashing out. We have seen Silver decline 12% in only 90ish days which is a great return for the Shorts but bad news for those with hard Silver in their portfolio. A lot of folks believe (hoping in my opinion) that Silver is at its bottom and is do for a upswing. Well folks, just like Gold, this bottom is 5 years old. Unlike Gold, Silvers price range is tightening. I am looking for price to get passed 16.00 on the upside and 14.00 to the downside before I can take any serious positions in Silver. Until then I will take advantage of the swings when I deem it worthy.

Fundamentals

Silver prices have taken a significant beating since 2011. It has lost over 70% in value. Any long term shorts of Silver are very happy indeed. Silver is still declining do to a global slow down in electronics as well traders and investors just not having faith in the shiny metal. There really is no good news for Silver. Unless we see a upswing in global demand for electronics of all types or a new reason other than investing to get the motor running for Silver, I just see a continuation of this ranging. At this moment I would rather hold a a 2.5% CD for a year than hold Silver for a year. Just saying.

- Ric
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Be humble or get humbled
Quoting riclater211
Fundamentals Silver prices have taken a significant beating since 2011. It has lost over 70% in value. Any long term shorts of Silver are very happy indeed. Silver is still declining do to a global slow down in electronics as well traders and investors just not having faith in the shiny metal. There really is no good news for Silver. Unless we see a upswing in global demand for electronics of all types or a new reason other than investing to get the motor running for Silver, I just see a continuation of this ranging.
Question for you Ric since you seem to have good insight into the electronics angle. In terms of Silver price drivers, what percentage do you think is attributed to industrial demand, and what percentage is about the store-of-value?

For example, pretty much everyone agrees that Gold is 99% store-of-value, 1% industrial (if that). But when it comes to Silver, I've heard people say it's as high as 90% store-of-value, and others says it's as low as 30%. What's your take?
Quoting Goat
{quote} You're talking about the one that started May 30? If so I like the thesis.
Yes. The announcement via his Twitter account came late Thursday around 7:30pm. A case could be made that GDP triggered this rally if you're looking at the larger time frames. It's not until you zoom it that it becomes more clear that the tariff chaos drove gold prices higher. I think that US-China trade spat fueled the move, along with bond yields inverting (or at least trying to).
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We must learn who is gold, and who is gold plated
Live All Time Return: -10.3%
Quoting Goat
{quote} Question for you Ric since you seem to have good insight into the electronics angle. In terms of Silver price drivers, what percentage do you think is attributed to industrial demand, and what percentage is about the store-of-value? For example, pretty much everyone agrees that Gold is 99% store-of-value, 1% industrial (if that). But when it comes to Silver, I've heard people say it's as high as 90% store-of-value, and others says it's as low as 30%. What's your take?
Dear Goat,

I hope Ric doesn't mind me contributing this table:
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Also, I have come across some other interesting charts on gold that show about 3%-8%* is used in technology. See Below, first is production and the 2nd is annual uses.
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*My rough estimate from the charts.

It is surprising to me that ~300 tonnes of gold was used in electronics, which can eventually be recovered as the recycling becomes more and more in focus.

Best Regards,
Tzamo
"Only you can Make the Future you will be proud to be a part of..." -Me
Quoting Goat
{quote} Question for you Ric since you seem to have good insight into the electronics angle. In terms of Silver price drivers, what percentage do you think is attributed to industrial demand, and what percentage is about the store-of-value? For example, pretty much everyone agrees that Gold is 99% store-of-value, 1% industrial (if that). But when it comes to Silver, I've heard people say it's as high as 90% store-of-value, and others says it's as low as 30%. What's your take?
Hey Goat, I would say industrial demand is in the higher end of 30%. Maybe around 20% ish for investments but that number has been slipping for years. 90% for investment purposes? Not in my lifetime. Its peek was during its bull run from 2009 to 2011 as everyone jumped on that train. I think, I will have to research it, it may have reached 40% passing industrial, but that came crashing down fast.

- Ric
Be humble or get humbled
Quoting tzamo
{quote} Dear Goat, I hope Ric doesn't mind me contributing this table: {image} Also, I have come across some other interesting charts on gold that show about 3%-5% is used in technology. See Below, first is production and the 2nd is annual uses. {image} {image} It is surprising to me that ~300 tonnes of gold was used in electronics, which can eventually be recovered as the recycling becomes more and more in focus. Best Regards, Tzamo
Hey tzamo,

Your all good. This is why I stared the thread. Thanks for the input.

- Ric
Be humble or get humbled
Quoting tzamo
{quote} Dear Goat, I hope Ric doesn't mind me contributing this table: {image} Also, I have come across some other interesting charts on gold that show about 3%-8%* is used in technology. See Below, first is production and the 2nd is annual uses. {image} {image} *My rough estimate from the charts. It is surprising to me that ~300 tonnes of gold was used in electronics, which can eventually be recovered as the recycling becomes more and more in focus. Best Regards, Tzamo
300 tonnes. 9645224 Troy OZ. $12,837,793,144. Wow..

- Ric
Be humble or get humbled
Quoting tzamo
{quote} Dear Goat, I hope Ric doesn't mind me contributing this table: {image} Also, I have come across some other interesting charts on gold that show about 3%-8%* is used in technology. See Below, first is production and the 2nd is annual uses. {image} {image} *My rough estimate from the charts. It is surprising to me that ~300 tonnes of gold was used in electronics, which can eventually be recovered as the recycling becomes more and more in focus. Best Regards, Tzamo
Thanks a bunch Tzamo! I'm spent for the night but will be looking into your information tomorrow.

Quoting riclater211
{quote} Hey Goat, I would say industrial demand is in the higher end of 30%. Maybe around 20% ish for investments but that number has been slipping for years. 90% for investment purposes? Not in my lifetime. Its peek was during its bull run from 2009 to 2011 as everyone jumped on that train. I think, I will have to research it, it may have reached 40% passing industrial, but that came crashing down fast. - Ric
My man, appreciate the expert perspective.
I find this monthly chart of gold fascinating:

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It has been making a series of higher lows since Dec 2015 and volatility has been contracting. There could be a lot of upside ahead if it breaks out from the ~1,375 level and it's easy to build a fundamental case around that scenario playing out.

Also, check out implied volatility for GLD. It just made in a cyclical low in April:

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Put it all together and things look very auspicious for gold.
Self-sufficiency is the greatest of all wealth. - Epicurus
Quoting tzamo
It is surprising to me that ~300 tonnes of gold was used in electronics
That is surprising, electronics (especially semiconductor) has been on a downward trend for the past year: http://www.ipc.org/3.0_Industry/3.1_...9/June2019.pdf
Attached Image
GOLD All Time Return: 113.2%
Quoting EventsTrader
... but this recent rally started on the Mexican 5% tariff news. Trade wars and more tariff drama fueled the rally even more. Congress is pushing back, and there's a chance that these tariffs won't stick. If news comes out about Trump pulling back the tariffs, gold could fall hard and fast. It would probably at least come back closer to around the 1300 levels. I'm out of gold but that's an opportunity I think I'd jump on if it happens.
I completely agree with this as well. However, with tensions building and NFP tomorrow, I think prices may get a bit volatile and give a "FU stop" on both sides of the fence before moving which ever way they're going to move. I've tightened stops on my long position to protect profits but that may be all I get, if prices become volatile
Do more of that which succeeds and less of that which does not - Dennis Gar
Quoting DonPato
{quote} I completely agree with this as well. However, with tensions building and NFP tomorrow, I think prices may get a bit volatile and give a "FU stop" on both sides of the fence before moving which ever way they're going to move. I've tightened stops on my long position to protect profits but that may be all I get, if prices become volatile
Well put. It's never worth getting into the market late Thursday before the data. You end up either taking a stop to avoid holding through the data, or letting NFP decide your fate.

Tight stops right now is a smart play. Any reversal in these Mexican tariffs will initially hit gold pretty hard. As I'm just catching up on recent news, it doesn't look like there's much of a chance of that happening. Those gold long trades might not be done yet. Quite the rally.
We must learn who is gold, and who is gold plated
Live All Time Return: -10.3%
Quoting EventsTrader
... Those gold long trades might not be done yet. Quite the rally.
Who knows...there is still plenty of buying at the highs...and I am within striking distance of my TP...I've moved the stop up now as well...

Want to place a bet on which one is hit first? I'm betting the stop (just 'cause I'm a cynic)
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Do more of that which succeeds and less of that which does not - Dennis Gar
Quoting DonPato
Want to place a bet on which one is hit first? I'm betting the stop (just 'cause I'm a cynic) {image}
You got yourself a bet. I'll take the TP. I hope I'm right for your sake.

After this gold trade, there may be another opportunity nobody's talking about:
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We must learn who is gold, and who is gold plated
Live All Time Return: -10.3%
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