Gold: The time is coming soon
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Another week down in the trading books and an extended weekend for many of you! I often use these extended weekends to reflect upon my investment process and figure out how to improve. It seems that we are all students of the markets and the markets show no mercy when giving a grade. There are no grading curves like many of you saw in college. It is as simple as this: You start your investment or account with "X," and it ended with "Y" balance. That is one way to grade yourself, and conversely, one can also grade the market they trade by its underlying performance.
I always finish my Friday afternoon by analyzing what markets performed the best over the past week, month, and quarter. That will give me an accurate picture of what asset classes I may be missing out on and what markets I might have been overstaying my welcome. With 2021 here, we are sending out a complimentary 2021 Futures Calendar & Reference Guide with a limited supply. The guide is your go-to resource for government & industry report dates, contract specifications, futures, and options expiration dates. *Available to U.S. residents only. You can request yours here: Blue Line Futures 2021 Pocket Calendar.
For instance, this week's performance data shows Corn leads the charge up 7.2%, while Sugar up 5.32% is playing catch up to the last week's rising energy prices, and Platinum trails up 1.42%. Earlier in the week, the USDA showed that Corn production, yield, and harvested acres all declined in 2020/21. Higher energy and Ethanol prices helped Sugar while the news that a new strain of Covid in South Africa could impact platinum production, resulting in higher prices.
Shifting to the markets you care about most, Dollar, Gold, silver, and treasuries all made large moves in one direction or another, but all in all, ending the week disappointingly flat.
So you might be asking yourself, what should we be preparing for next?
I would expect that the new administration's progressive policies are likely to continue to boost inflation and commodity prices into the next two quarters of 2021. Remember that commodity prices generally travel with the economic cycle perceived 6-9 months into the future. While we still "feel" like we are in a recession, the markets are looking forward to economic expansion through created economic policies. Now I know what you are thinking; I have lost my mind and that 45% of the small businesses are gone forever, making up 60% of the labor force. What will happen is that the Government will literally "print jobs" and create this overheating environment. The perceived level of printing pushes the Dollar lower (which Gold loves), but the recovery anticipation has already pushed 10-year yields higher, which Gold hates. Therefore when the economy "cools" or is done drinking the "printing" cool-aid in 6 months, that is your time to buy Gold, sell Treasuries, buy the Dollar. One way to get your 2021 on track is to register for a free two-week trial of our Morning Express. Here, we provide actionable technicals, fundamentals, market bias, and our proprietary levels for the most actively traded futures and commodity markets, including gold and silver. You can register here: The Blue Line Express Two-Week Free Trial Sign up.