Ed Moya – OPEC Cut Driving Oil To $80+, Gold Over $2,000, Weak ISM Data
Ed Moya, Senior Market Analyst at OANDA joins us on a busy Monday to kick of Q2 2023 for markets.
OPEC cut production by around 1million barrels/day ahead of the meetings which is driving oil prices much higher – crude is over $80/barrel. Gold is off to a good start for Q2, now over $2,000/oz. This move could be supported by the weaker ISM data out of the US which is also leading to bonds moving higher, driving yields lower. We cover it all in today’s interview.
Click here to visit the OANDA website to follow along with Ed’s daily market note.
There definitely has been a bid in bonds for a few weeks now, and I agree it is not just on the back of the manufacturing data… the trend higher started a while back after they double-bottomed from the end of last year and then again right before the banking crisis kicked off in early March.
There has been a steady safe-haven inflow into Bonds, Gold, and the Yen for about a month now, while the Dollar has stayed weak.
And they all made major lows almost 6 months ago, well before any recent news. These markets “know” in advance because of the big money that plays them.
Agreed, most of the safe havens (bonds, gold, silver, yen, etc…) bottomed from Sept-Nov, far in advance of the latest news that simply fulfilled the inevitable bounce technically. Technicals often front-run news that later is just a self-fulfilling prophecy realized and signaled far in advance of whatever is attributed as the reason later.
Defiance Silver busting out…
Yep, look at Defiance Silver go…. the junior mining kernels are starting to pop!
I took some off the table as my daily up limit is 25-30% in these micros…
No harm in pulling profits, for sure. Congrats Dan on the double-digit gains.
Unfortunately, I sold out of Definance Silver a while back, and thus was not in position for this blast higher in it. However, I’ve been catching a number of nice moves higher in many of the silver stocks in my portfolio lately, so no complaints from the recent bullish action in the PM sector.
As far as harvesting gains versus letting the winners run, it is always one of the tougher debates to manage as an investor. After been shellacked for the last few years, the temptation is to take the profits while they are there. However, in prior bullish cycles, my most common mistake (and actually a very comment mistake for many investors) was pulling profits too early and not letting my winners run.
Just like the downside moves get so ridiculously oversold, the upside rallies often go to levels that are ridiculously overbought, and I’m going to do my best to remember that in this metals cycle.
I hope to buy back in shortly under $.20, the website that told its’ followers to sell a few months back may have given it a buy signal last week.
Kootenay hitting at the strike price of $.135 for warrants from last November…
I raise a (proverbial) can of Trans Bud Light to spike in Defiance Silver. Real men don’t drink light beer. Real men prefer real women.
Gold Climbs Past $2,000 As OPEC Cuts Spark Uncertainty, Safe-haven Appeal
Carl Surran – SA News Editor – Apr. 03, 2023
Gold prices settled above $2,000/oz for the first time in three weeks Monday, as a weaker U.S. dollar and a drop in U.S. Treasury yields after OPEC’s surprise decision to cut oil production rekindled inflation fears and uncertainty about the Federal Reserve’s response.
U.S. gold futures closed +0.7% at $2,000.40/oz, reversing initial losses and rising to settle at a three-week high as traders realized that “in the end nothing good can happen if oil prices continue to rise,” Oanda’s Edward Moya said, adding the OPEC+ decision is “really driving the inflation hedge trade” for gold.
Also boosting gold’s safe-haven appeal, U.S. manufacturing activity fell to its lowest level in nearly three years in March as credit conditions tightened, extending losses for 10-year Treasury yields.
Citing bullish momentum, a daily close over $2,000/oz Monday and Tuesday could cause a short covering rally and a move to $2,120, Insignia Consultants research director Chintan Karnani told MarketWatch, adding only a very strong March jobs report would cause a selloff in gold.
Investors pumped $1.26B into gold mutual and exchange-traded funds during the week ended March 22, the largest weekly net inflow since April 2022.
Bonds bottomed way ahead of the ISM data. Unlike the stock market, bonds have probably already seen an important low.
https://stockcharts.com/h-sc/ui?s=%24UST&p=W&yr=5&mn=0&dy=0&id=p06239971905&a=1190045257