Breaking News

Where Gold And Industrial Commodities Are Heading

By Ed YardeniCommoditiesMay 15, 2014 12:03AM ET
Where Gold And Industrial Commodities Are Heading
By Ed Yardeni   |  May 15, 2014 12:03AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Gold Price Overview
Gold Price Overview

Shorting gold when it rose to a record $1,895 per ounce on September 6, 2011 would have been a great trade, with the benefit of hindsight. It is down to $1,305 currently, with most of the decline occurring last year after the bulls lost their confidence in the precious metal when it didn’t soar after ECB President Mario Draghi’s whatever-it-takes speech and on the introduction of Abenomics.

A few contrarians I know are turning bullish on gold. They note that both the price of gold and the price of silver seem to be finding support at their 2013 lows. Silver is back at that low. However, it settled at its highest level in a month on Wednesday, buoyed by a report that said physical demand for the metal rose to a record last year. Gold rose back over $1,300 an ounce yesterday.

If the precious metals head higher, it will be either because of rising geopolitical tensions or rising inflation, say the contrarians. The former scenario seems like a more likely one than the latter, in my opinion.

I believe that the price of gold is a good indicator of the underlying trend in industrial commodity prices, which I expect will remain on the flat side for a while longer. So if the price of gold takes off, I will have to reassess my outlook for commodities.

Today's Morning Briefing: The Contrarians. (1) Favoring the out-of-favor. (2) A review of the most recent hits. (3) Greek yield drops from 44% to 6%. (4) Betting that China will have to do something. (5) Could US bond yields go lower? (6) Will precious metals become more precious? (7) Global boom would be a contrary bet leading to higher commodity prices, rising EM stock prices, and a weaker dollar.

Gold and CRB Raw Industrials Prices Overview
Gold and CRB Raw Industrials Prices Overview

Where Gold And Industrial Commodities Are Heading

Related Articles

Where Gold And Industrial Commodities Are Heading

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email