Time for metals to shine!

December 4, 20236 Comments

Base metals look like they are catching a bid. Copper moved off of its support point recently and broke through a down trendline. It does have significant resistance near $4, but if that breaks, it would be significant.

Here’s he chart:

The base metal producers are, not surprisingly, moving with copper. Here’s the BMO metals producers chart (disclosure: we hold this in our Equity Platform). Note the bounce off of strong support near $47. Target is to $62-ish. Momentum and moneyflow indicators suggest an oversold bounce in play:

Its no secret that gold has been making a run. I’ve been harping on that potential since last year. We’ve held it for a while. Now that its broken that $2000 lid, it seems to me to have lots of potential upside. As I noted on this video, we had a setup for some USD weakness, which typically leads into strength in gold.

USD Outlook – ValueTrend

We hold the XGD gold producers ETF, rather than try to siphon through the collection to find the best Canadian gold stocks. The producers have the potential to move into the old resistance level near $22, now that the underlying commodity is breaking out. Nice bounce off of support.

 

Silver looks pretty good too. We hold a bit of the commodity ETF, and a larger position in a silver stock. Note the breakout – suggesting a target near $30:

Conclusion

Metals have been overlooked for a while, but perhaps now is their time to shine.

6 Comments

  • Keith I appreciate the reasoning behind metals but from a portfolio management perspective is ZMT not too thinly traded. There are several days in the last ninety below 1000 units. XBM has more volume still not really high. It seems the two move in tandem so is there a charting or fundamental difference?

    Reply
    • For us, we can trade ETF’s with greater liquidity than retail investors. That’s because we typically go to the market maker and they create or buy back the units –so long as the underlying stocks are solid (they are), liquidity is good.

      Reply
  • Keith just wondering if you have any thoughts on oil holding it’s 200 day MA…I know the seasonality suggest it may not …

    Reply
    • wtic has already moved below its 200 day SMA
      Support lies just below current pricing. My thoughts are that the pattern is consolidation–not likely a breakdown–we sold half of our energy stocks a few months ago per this blog. I expect to enter when seasonality Feb or so comes into play

      Reply
  • Could it be time to start investing in the Argentina turn around with the new president in place.

    Reply

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