GoldNuggets — Oil vs Gold and More
Oil vs Gold
Stepping back from the extreme volatility in oil prices today (down almost 10% at the time of writing, following so far only limited response by Iran to the weekend US bombing run on Iran’s nuclear facilities) — the bigger picture here is that oil has reached what appears to be a low point vs the gold price.
In all my experience in markets and all the charts I’ve studied, I can say one thing with confidence: pay close attention when you see extremes like this (particularly when they start to turn). $WTI Crude Oil - main 2508(CLmain)$ $Gold - main 2508(GCmain)$
Oil & Gold vs Other Commodities
Here’s another angle on it, but breaking it out into Crude Oil vs other commodities (equal-weighted) and the same for gold.
This way of looking at it is insightful because it shows how the extreme level in the chart above has arisen due to both legs (i.e. crude oil making major relative lows vs other commodities, and gold making major relative highs — and both seeing initial exhaustion of both moves).
If I had to bet one way or the other I’d be betting on oil vs gold just given how stretched the rubber band is at this point.
Silver Lines
Elsewhere, Tavi Costa of Crescat Capital comments “Silver is on the verge of a major breakout, in my view, from one of the longest cup-and-handle formations I’ve ever seen.“
Big if true, watch this space…
Platinum Punching Higher
The breakout in platinum prices has proven explosive so far, it just goes to show that when you get a breakout from a large technical pattern like this it can go fast and far. How far it goes from here is anyone’s guess.
Commodity Capex Crowd-out
I mused the other day on Twitter/X: “Tech stocks are taking up a growing share of corporate capex spend ---but are we investing enough in real world supplies/materials to fuel and build our future? And for that matter, if we're underinvesting in commodities, maybe commodities are actually the place to be...“
Yet another clue for commodity super-cycle seekers.
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