Great charts Callum. I hear what you are saying on the oil vs. gold chart, but I'm just not sure that the data generating process underlying it is stable. Gold is supported by a long-term lack of investment in exploration and development, leading to minimal long-term supply growth amid exploding demand arising from monetary instability/debt-deficits.
While oil faces significant headwinds as the conversion of the global automobile fleet from ICE to BEV/Hybrid continues apace. The fact that we couldn't hold $80/bbl even with Iran lobbing missiles into Qatar, threatening the Straits of Hormuz and US striking Iran is deeply bearish, IMHO.
Gold, meanwhile is treading water despite a surge in US equities/fall in the VIX index, which normally would have seen a 'healthy' correction.
Right now, I am 6/10 bullish gold, but 8-9/10 bullish platinum and silver. If you are right on the industrial cycle turning up, platinum and silver are going to run.
Thanks Peter, indeed, I am quite bullish on commodities in general; I think gold has lead the charge for very good reasons (as you note), and it's a matter of time before we see catch-up by the rest of the pack (just as everyone has given up on and forgotten the commodity supercycle!)
Yes. We should do a podcast together discussing. I can also talk fairy… I have written Jarden's Dairy Monthly since 2012. I think would be very interesting for clients…
Great charts Callum. I hear what you are saying on the oil vs. gold chart, but I'm just not sure that the data generating process underlying it is stable. Gold is supported by a long-term lack of investment in exploration and development, leading to minimal long-term supply growth amid exploding demand arising from monetary instability/debt-deficits.
While oil faces significant headwinds as the conversion of the global automobile fleet from ICE to BEV/Hybrid continues apace. The fact that we couldn't hold $80/bbl even with Iran lobbing missiles into Qatar, threatening the Straits of Hormuz and US striking Iran is deeply bearish, IMHO.
Gold, meanwhile is treading water despite a surge in US equities/fall in the VIX index, which normally would have seen a 'healthy' correction.
Right now, I am 6/10 bullish gold, but 8-9/10 bullish platinum and silver. If you are right on the industrial cycle turning up, platinum and silver are going to run.
Thanks Peter, indeed, I am quite bullish on commodities in general; I think gold has lead the charge for very good reasons (as you note), and it's a matter of time before we see catch-up by the rest of the pack (just as everyone has given up on and forgotten the commodity supercycle!)
Yes. We should do a podcast together discussing. I can also talk fairy… I have written Jarden's Dairy Monthly since 2012. I think would be very interesting for clients…
Do you think this trend is sustainable, or are we on the brink of a convergence?