Gotta Love Today's Rally
Yesterday, I titled my post: "Is This Rally for Real?" Today's action is a big vote in the "Yes" column.
The three forces I talked about yesterday continue to power commodities higher. One thing I find very interesting is that the Saudis are obviously dragging their feet on cutting production. OPEC could still blow it -- badly -- but if and when the Saudis come onboard with a strong statement, that could convince the doubters and light a fire under oil prices.
And there are still obstacles in crude's return to the bullish path. U.S. refiners used 89.2% of plant capacity last week. That's less than forecast and the lowest in five months. The bullish news is that distillate stockpiles declined ... the bearish news is that even so, supplies are 18% more than the five-year average.
Still, that's not stopping a long-overdue relief rally in the energy holdings of Red-Hot Canadian Small-Caps.
And precious metals are sizzling, too -- gold is up $12.40 as I write this (over 2%) and silver is up 30 cents (2.64%).
In fact, all metals are on fire. Just look at nickel. Prices are soaring as stockpiles plunged on the London Metals Exchange. Indeed, nickel stockpiles are down 88% this year, equal to less than two days of global consumption. And zinc prices are way up as stockpiles dwindle -- down 66% this year.
Will all this change next week? It's hard to say. The interesting test ... and it will come ... will be when gold and silver go down to test their new support. That will tell us if this rally has legs.
The three forces I talked about yesterday continue to power commodities higher. One thing I find very interesting is that the Saudis are obviously dragging their feet on cutting production. OPEC could still blow it -- badly -- but if and when the Saudis come onboard with a strong statement, that could convince the doubters and light a fire under oil prices.
And there are still obstacles in crude's return to the bullish path. U.S. refiners used 89.2% of plant capacity last week. That's less than forecast and the lowest in five months. The bullish news is that distillate stockpiles declined ... the bearish news is that even so, supplies are 18% more than the five-year average.
Still, that's not stopping a long-overdue relief rally in the energy holdings of Red-Hot Canadian Small-Caps.
And precious metals are sizzling, too -- gold is up $12.40 as I write this (over 2%) and silver is up 30 cents (2.64%).
In fact, all metals are on fire. Just look at nickel. Prices are soaring as stockpiles plunged on the London Metals Exchange. Indeed, nickel stockpiles are down 88% this year, equal to less than two days of global consumption. And zinc prices are way up as stockpiles dwindle -- down 66% this year.
Will all this change next week? It's hard to say. The interesting test ... and it will come ... will be when gold and silver go down to test their new support. That will tell us if this rally has legs.
Check out my new gold and energy blog at MoneyAndMarkets.com
posted by Sean Brodrick @ 1:52 PM
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