Category Archives: Commodities

12th November 2013 — Speculative buy: oil at $95.71

In August’s issue of SpreadBet Magazine I wrote that the Gold/Oil ratio suggested gold was due a rally and/or oil was due a pullback. Although I have remained bullish on gold throughout the summer, at the time I thought it more likely that there was a decent opportunity to short oil. And so there proved to be.

(As an aside if you haven’t added the Gold/Oil ratio to your watch list it probably is time you did…)

 

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12th October 2013 — The Baltic Dry Index screams buy miners

The Baltic Dry Index (BDI) couldn’t be sending any clearer message for resource investors at the moment. It is screaming, as loud as it can, to buy mining stocks!

For once I am not talking about precious metal miners, but rather the producers of raw materials, with real industrial and commercial applications.

 

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23rd September 2013 — The MIDAS Touch

King Midas’ legendary ‘curse’ was that all he touched turned to gold. If only my trading fortunes were blessed with such ill (good) luck! Today, rather than a Midas touch, I find myself faced with a MIDAS test.

OK, I am sorry, enough of the terrible puns!

Immediately before the FOMC bottled making a decision (which in hindsight wasn’t much of a shock I suppose), I released this piece, which analysed the gold price in the context of the MIDAS method. So far this summer, MIDAS has made some fantastic calls in various commodity markets (copper, natural gas, silver and gold). During this time, experienced users of MIDAS will have been able to get in and out of these markets, as crucial levels of support and resistance were confirmed and failed.

 

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18th September 2013 — Gold; a test of faith

We’ve been quite categorical about our position on gold over the summer. We are bullish and believe the current pullback represents a buying opportunity.

It is true that many die-hard gold bugs loudly proclaimed their allegiance to the precious metal from the top, all the way to the bottom, losing fortunes in the process. While we hope we haven’t been afflicted by the same investment fanaticism, we are betting that the latest weakness is a precursor to the next move higher. It is possible that the recent drops have been exacerbated by taper-related speculation, but we are now at or are approaching several key areas of technical interest. As always, we let ourselves be guided by what the charts have to tell us.

 

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11th September 2013 — Sharp move higher in the Baltic Dry Index

The rally in commodity stocks looks like it has legs!

Prices of raw materials have taken a bit of a dip in the last week, but the Baltic Dry Index (BDI) has suddenly soared. The BDI is issued daily by the Baltic Exchange, based in London, and measures the utilisation of 23 of the world’s largest shipping lanes. The overwhelming majority of commodities are still shipped by sea, so the BDI gives investors a fantastic means of gauging global demand. It also serves as a decent proxy for what is really happening in China.

Yesterday, the BDI closed at 1,478, having risen nearly 50% in the last month;

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