Gold Over $2500 an Ounce-Hello Miners

August 12, 2024

Mish's Daily

By Mish Schneider

Hedge funds are the most bearish on commodities prices in at least 13 years as fears of a deeper economic slowdown cast doubts on demand for everything from crude oil to metals and grains, according to a report by Bloomberg

Meanwhile, WTI crude oil traded above $79 a barrel.

And gold cleared $2500 while silver sits around $28 an ounce.

Only grains are beaten down to historical lows.

So, hedge funds got that right-that is if they are not forced to cover those shorts very soon.

All year our mantra has been “looking for inflation in all the wrong places.”

Not to mention the Fed will most likely lower rates in September as this week’s CPI and PPI readings might lull them to sleep.

However, I cannot imagine the Fed is not watching gold and oil as carefully as we are.

Gold miners tend to spark when gold becomes a highflyer.

Hedge funds don't understand the power of this gold bull market.

Gold has made higher highs and higher lows.

Plus, one has to wonder what $2,500 gold does for miners.

Here are the notes I sent to media producers to consider as talking points:

Going out on a limb-believe we are about to see more (maybe a lot) upside in commodities
1. Oil-can see 80-90
2. NatGas thru 2.20 has a lot of room
3. Silver still cheap and in an uptrend
4. Gold on its way to 2700
5. Ags-DBA
6. Bitcoin-very close to the start of a more substantial leg up
Reason we like commodities now more than most equities
1. Geopolitics
2. No sign of decreasing debt or govt spending
3. Fed about to ease-or at least totally done hinting at raising-and with CPI PPI next week, numbers will support inflation over-ha
4. From a risk standpoint, best value on the board
Risk on and off in equities now
1. Risk On
  - High Yield bonds still outperforming long bonds and SPY
  - Semis still holding a weekly bull phase
  - Biotech seeing money flow-good sign
  - Retail while underperforming held critical support
2. Risk off
  - Transportation sector remains a weak link
  - Long Bonds outperforming SPY
  - Gold holding over 2400
  - Indices all below their 50-DMA or in warning phases
See more stagflation than any other economic scenario

Let’s take a look at the miners:

GDX returned to a bullish phase in price.

It is outperforming SPY.

Momentum is beginning to grab the 50-DAM.

It is also above the July 6-month calendar range low.

It still has to clear the July 6-month calendar range highs at 38.58.

Regardless, GDX looks like it has lot of room to go, while the indices remain stuck in warning phases with bearish divergences in momentum.

Educational purposes only, not official trading advice.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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Mish in the Media-Want to see more? All clips here

Making Money with Charles Payne Mish and Charles discuss evidence for both risk on and risk off and why stagflation is the best definition 08-12-14

Business First AM All About Holding Rivian for the Longer Term 08-07-24

Better Trader Systems Podcast Mish goes teacher and explains how easy trading can be if you know about phases 08-07-24

Singapore Radio Mish talks about the FED, recession, a technical bounce and Bitcoin 08-06-24

Business First AM Mish covers small caps, retail, transportation and bonds-what to look for now 08-06-24

Yahoo Finance Mish talks about the obvious cracks that led to this sell off and what might be next 08-02-23

Coming Up:

August 12 Maggie Lake

August 15 Real Vision

Weekly: Business First AM, stockpick.app

ETF Summary

S&P 500 (SPY) 540 resistance with 505 next support

Russell 2000 (IWM) 210 resistance 199 support