While gold remains under pressure from a strong dollar, producers of industrial metals like copper and steel are beginning to show signs of perking up. Booming demand from alternate energy applications is the big driver here.

Elsewhere, the global titanium supply crunch continues with no immediate relief in sight.

In the trading portfolio, two new positions are recommended, including a major steel producer and a titanium market player.

Gold and silver have been under pressure from a strong dollar and higher interest rates, but there are signs that the metals’ dollar-related woes may be in the process of changing for the better. The global de-dollarization trend is a case in point, as we’ll discuss here.

Elsewhere, steel and copper are both trying to establish bottoms and are getting some help from a resurgent auto industry.


In the trading portfolio, no new positions are recommended for now as the broad financial market remains unsettled (with increased spillover risk into the metals).

Weakening economic indicators in the U.S., along with Covid-related shutdowns in China and economic woes in Europe, have converged to push prices for industrial metals lower. Gold and silver, meanwhile, have been caught up in the equity market downdraft produced by the Fed’s tightening monetary policy.

There are windows of opportunities ahead for both precious metals, however, including a potential recession-related safety bid for gold and an upcoming seasonal factor for silver.



In the trading portfolio, no new positions (save for a U.S. dollar ETF) are recommended for now as the broad metals market is still unsettled.

It’s a good news/bad news situation for most metals, as shutdowns across Europe, Asia and South America due to power shortages and other factors are contributing to lower supplies for several industrial metals. However, signs that inflation may be in the process of reversing bodes ill for the intermediate-term outlook.

Uranium, meanwhile, is now in the driver’s seat as the global energy crisis supports the renewal of nuclear power initiatives.



In the trading portfolio, no new positions are recommended for now as the broad metals market is still unsettled.

With short-covering activity no longer a factor, gold remains in a tenuous position on a short-term basis. A strengthening 10-year bond yield and a robust dollar are further headwinds for the metal.

Lithium, meanwhile, is back in a commanding lead among the key industrial metals—thanks in part to the newly passed Inflation Reduction Act law.



In the trading portfolio, no new positions are recommended for now as the broad metals market is unsettled.

Gold and silver prices have perked up since our last regular issue, thanks in part to a substantial reduction in short positions among commercial hedgers. Other segments of the market are improving as well, including platinum and palladium.

Elsewhere, titanium has fallen from grace—in part due to a TikTok rumor mill video. Other industrial metals, meanwhile, are coming off major lows but have recovery potential.



In the trading portfolio, I’m putting our favorite silver-tracking ETF back on a buy, while adding another steel-related position.

The precious metals remain near their yearly lows, but a window of opportunity still beckons. Specifically, recent commercial hedging activity points to a possible bottom ahead for the metals.

Elsewhere, titanium remains one of today’s strongest metals. Other industrial metals, meanwhile, are coming off major lows but have rebound potential.



In the trading portfolio, I’m adding a potential short-covering trade for a palladium ETF. Details inside.

The old Wall Street bromide that says “bull markets climb a wall of worry” can be applied to lithium. The battery metal is facing new worries over the impacts of a proposed tax that many fear will keep supplies restricted. While potentially bad for the EV market, it has so far been good for prices.

Elsewhere, steelmaking coal is on the rebound while related stocks are looking good. Industrial metals, meanwhile, are coming off major lows but have rebound potential.



I continue to recommend that we remain mostly defensive until weakness subsides.

Silver is about to enter its most bullish seasonal period of the year. As we’ll discuss here, July has the potential to bring about a strong performance for the metal—especially given its oversold technical condition.

Elsewhere, titanium remains strong, while lithium is currently the top-performing metal for the month of June. Industrial metals, meanwhile, were shaken by recession risks.



I continue to recommend that we remain defensive until the selling pressure dies down.

After several weeks of underperformance, gold is once again showing promise after the latest round of global equity market weakness. As we’ll discuss here, it’s looking like safety demand for the metal is rising.

Titanium, meanwhile, remains strong and is currently the top-performing metal.



Lithium was shaken by a bearish Goldman Sachs call, but the metal’s trend is still up.



All told, I continue to recommend that we stay on our toes as market turbulence is very high right now.

Titanium, an under-covered market on Wall Street, has the unlikely distinction of now being one of the top-performing metals.

This metal, along with lithium and steelmaking coal, grabbed the top spots in terms of overall performance and has provided us with a solid performance in an otherwise soft metals broad market.



Elsewhere, steel should strengthen while gold and silver both have a good chance to turn around in the coming weeks.



I continue to recommend that we maintain a mostly defensive stance.

Rising Rates Pressure Gold

Gold is outperforming the major risk assets this year, but remains pressured in the near term by rising bond rates. For reasons explained in this issue, I don’t expect this dynamic to persist for long, however.



Titanium and steelmaking coal remain the top performers right now, with both minerals supported by shrinking availability and increasing demand. Steel is also strong, meanwhile, while copper remains weak.



For now, I continue to recommend that we maintain a mostly defensive stance.

The experience for base and precious metals investors since March, when most metals peaked, has been something akin to Chinese water torture. To be sure, there have been periodic opportunities in select metals (and related industries) along the way. But the main trajectory for the sector has been steadily lower most of this year.

There’s no disputing that gold has been one of this year’s most “boring” markets. What started as a promising New Year—with investors almost unanimously expecting inflation to skyrocket (thereby boosting gold’s appeal)—has mostly seen rising interest rates and a strengthening dollar consistently undermine interest in the metal.

One of the most aggressive Federal Reserve rate-hiking cycles ever is weighing heavily on gold, with another rate increase expected this week. On top of that, continued strength in the dollar index and rising yields in longer-term Treasuries (a major competitor for gold) are causing bullion investors to run for the exits.

While metals like lithium and uranium remain buoyant, gold is still in the proverbial doghouse despite having several good reasons to strengthen. This consideration has prompted investors to wonder what exactly it will take to turn the yellow metal around.

Gold and silver remain laggards in the broad metals market (no surprise there!). Thankfully for investors, however, other industrial metals are starting to strengthen after the setbacks of recent months and are picking up the slack in the precious metals market.

In the last six weeks, metals and mining stocks have been on the comeback trail along with the broad equity market. Short-covering activity has unquestionably served as a major catalyst behind the recent gains in the metals, but now that much of those short positions have been covered, it’s time to ask the question many investors have been dreading, namely: “What—if anything—will fuel the next leg of the recovery?”

After a stellar performance in 2020 and a so-so 2021, gold has been one of this year’s biggest disappointments. After a promising rally in the first quarter, gold fell 17% from its March peak of $2,050 an ounce to $1,700 just two weeks ago.

But the decline looks like it may have finally ended in a classic “washout” with small investors running away while market-moving commercial players have lately jumped in as buyers—potentially good news from a contrarian perspective.

It’s no secret that gold is, historically, the world’s most widely preferred safe-haven asset in times of economic turmoil. Gold’s polar opposite is copper, which typically benefits the most when the global economy is strong.

By looking at both metals—separately and together—we can get a “snap shot” view of the market’s expectations for the economy’s near-term (six-to-12-month) performance. We can also get some potentially useful trading clues for both metals—and even for silver—when we look at the copper-to-gold ratio.

Weakness persists in most metals—and commodities in general—as investors continue to worry about the heightened risk of another recession. Despite the bad news, however, there are some promising areas of strength which we’ll discuss here.

Before we do, let’s start with the areas we’ve been avoiding. Industrial metals like copper, steel and aluminum just made fresh lows last week, with the former hitting its lowest level since 2020. “Dr. Copper,” the metal with a PhD. in economics, is especially worthy of mention.

Just when it looked like stocks might be rounding a corner, sellers have returned in force and pushed the major indexes into bear market territory. While this was bad for Wall Street, gold finally got some much-needed relief as “risk-off” is clearly back with a vengeance.

Last week, we discussed the “golden opportunity” for bullion in the wake of investors’ cratering confidence in the economic outlook. Gold was at first slow to respond to the rush to the exits in the equity market. But gold’s latest refusal to fall under the $1,800 an ounce level showed that hedging demand has replaced interest in bargain hunting for stocks.

Hurricane season is upon us, a time of year that normally sees increased storm activity along America’s coasts. If a prediction by a major investment bank is correct, the U.S and other major countries will also experience an “economic hurricane” at some point in the coming months.

The “hurricane” prediction made headlines last week after JPMorgan Chase (JPM) CEO Jamie Dimon used the term to describe what he sees as a precarious balancing act the Federal Reserve must perform in trying to control inflation by raising interest rates without pushing the economy into recession.

With the gold price just slightly above its lowest level of the year, it has been difficult to be upbeat on the gold mining stocks.

The PHLX Gold/Silver Index (XAU), the industry benchmark for the actively traded North American miners, is also near a multi-month low and still below its 50-day moving average. In fact, almost every actively traded U.S.-listed gold stock is under the 50-day line—a feat seldom achieved except in the most voracious of bear markets.

Shares of steel producers plunged on Wednesday after Nucor (NUE) said it expects third-quarter earnings to come in under Wall Street’s estimates.

There has been a growing number of market-moving headlines for uranium in the last few days, prompting us to give the energy metal a closer look.

Cleveland-Cliffs (CLF), North America’s largest flat-rolled steel and iron ore pellet maker, just reported mostly upbeat second-quarter earnings.

As the internal condition of the broad equity market shows gradual improvement while short covering continues, I think it’s time we turn our attention to stocks and ETFs that are in a position of relative strength compared with the rest of the market.

Alliance Resource Partners (ARLP) is now up 12% from our initial entry point as of Wednesday, which means it’s time to take some profit off the table per the rules of our trading discipline.

Sociedad Química y Minera de Chile (SQM) is now up 11% from our initial entry point as of Friday, which means it’s time to take some profit off the table per the rules of our trading discipline.

Kronos Worldwide (KRO) is now up 18% from our initial entry point as of Thursday, which means it’s time to take some profit off the table per the rules of our trading discipline.

On March 22, we purchased a conservative position in Sigma Lithium (SGML), a Canadian company that develops, through its subsidiary Sigma Mineracao S.A., hard-rock lithium deposits in the Americas.

Gold is heating up as the Ukraine-Russia situation heats up, and some of the blue-chip senior and mid-tier gold miners are showing conspicuous signs of relative strength. Since mining stocks tend to outperform gold in a precious metals bull market, it’s time to take a closer look at the leading miners.

Metal stocks have had a stellar run of late—especially considering the relative weakness of other segments of the broad U.S. equity market. But if experience teaches us any lesson, it’s that when things look great, we should be on our toes and anticipating a possible reversal of fortunes (especially considering the cyclical nature of the industry group).

A couple of quick notes are in order. We exited our trading position in U.S. Steel (X) today after our stop-loss at 23.50 was violated on an intraday basis.

Aluminum prices have risen almost 8% in the past week as the global supply situation continues to tighten.