Monday Morning Charts

It’s really make-or-break time for the CRB. That said, the 61% retracement is a good place to bounce, and pullback to this level is quite normal in a commodity bull market.

Oil should be bouncing a lot more than it is with a Category 3 hurricane headed toward Energy Alley. This is indicative of the extreme pessimism in the market right now. Let’s see how the week plays out.

Gold also isn’t getting much of a break despite news of a big ramp-up in buying in India. Hmm …

Here is some news you can use.

OIL

Oil Rebounds From Five-Month Low as Ike Nears; Gold, Wheat, Copper Gain Crude oil and copper led gains in commodities as Hurricane Ike threatened rigs in the Gulf of Mexico and the U.S. government's takeover of Fannie Mae and Freddie Mac bolstered investors' expectations for growth.

Mexico Government Will Probably Set Oil Price at $80 Per Barrel in Budget Mexico, the second-biggest oil producer in the Western Hemisphere, will probably assume its crude exports will sell for $80 a barrel next year in a budget proposal the government plans to submit to Congress today.

OPEC to Pump Near Record Amounts of Crude as $106 Oil Price Stunts Growth OPEC, the supplier of 40 percent of the world's oil, will probably keep producing at a near record pace as $107-a-barrel crude squeezes the global economy.

Saudi crude price hikes may offer OPEC production hints

Its latest term crude prices suggest state-owned Saudi Arabian Oil Co (Saudi Aramco), may be starting to price in a period of lower output, even if OPEC next week doesn’t formally sign off on a production cut.

NATURAL GAS

Origin Says $8 Billion Conoco Gas Agreement Justifies Rejection of BG Bid Origin Energy Ltd., Australia's biggest producer of natural gas from coal seams, said an $8 billion transaction with ConocoPhillips ``more than justifies'' its rejection of a hostile takeover offer from BG Group Plc.

XX Sean’s note: Red-Hot Global Small Caps subscribers have one of these Aussie coal-seam gas companies in their portfolio – and it shot up 30% today, the biggest move in 3 ½ years. Why? Because this Origin deal is upping the ante on Australian coal-seam gas.

URANIUM

Energy, Toro Shares Rise in Sydney on Optimism Uranium Mining Ban May End Energy & Minerals Australia Ltd. and Toro Energy Ltd. led gains by uranium explorers in Western Australia on optimism the Liberal Party may win government after the weekend's state election and allow mining of the nuclear fuel.

US ECONOMY

Weekend Bailouts and Subsequent Market Reactions

Three observations/questions/takeaways from the past of weekend rescues history:

1. A strong rally lasts for a while, but it eventually fades and makes a new lower low; Each rally has been shorter in duration and weaker in intensity than the previous one;

2. The pre-Asian open news pattern reveals the Asset price focus is a large part of these issues;

3. What form of free markets have we evolved into? Its not Capitalism, its not Socialism, its not intelligent regulation. WTF is this??

Bank Insiders Step Up Purchases of Their Own Stock to Most in Two Decades Bank and savings and loan insiders spent more money buying shares of their companies in May, June and July this year than in any previous three months in at least two decades, betting that financial institutions are bouncing back from the credit-market crunch.

Paulson Bets He Can Do What Eluded Fed: Get Banks to Lend in Down Economy Henry Paulson is making a colossal bet that the U.S. Treasury can do what Ben S. Bernanke's Federal Reserve failed to do: Get banks to lend more freely when the deteriorating economy is still telling them to hold back.

GOLD

India’s gold imports jump 45%

India’s gold imports in August jumped 45 percent from a year ago, the first annual rise this year, as lower prices and upcoming festivals drove demand in the world’s leading consumer, a trade body chief said.

Check out my new gold and energy blog at MoneyAndMarkets.com

Bearish news on energy

Oil prices are cratering today; I guess investors think the bad news is factored in. I kind of expected this investor reaction, which is why I got my RCE subs out of DIG on Monday, and I'm glad I did.

And it's not just oil. Bearish news (short-term, anyway) on natural gas continues to roll in. From Bloomberg …

Inventories advanced 102 billion cubic feet in the week ended Aug. 22, to 2.757 trillion cubic feet, the U.S. Energy Department said today. Analysts forecast an increase of 84 billion. The average change for this time of year is 57 billion cubic feet.

Stockpiles are 71 billion cubic feet above the five-year average for this time of year, the department said today.

Meanwhile, if US oil production is knocked out in the Gulf of Mexico, we’ll get help from overseas …

The International Energy Agency IEA is ready to release strategic oil stocks if Tropical Storm Gustav hits the Gulf of Mexico oil hub early next week, the energy adviser to 27 rich nations said on Thursday.

In other news, Weather Underground has the scoop on Gustav and its progress. But here in Florida, we are starting to turn nervous eyes on Tropical Storm Hanna, which has, as Mike Larson informed me, taken an “Andrew-esque” path.

Check out my new gold and energy blog at MoneyAndMarkets.com

Charts and News for Monday -- Stormy Weather Edition

Oil Rises From a Six-Week Low on Tropical Storm, Iran's Nuclear Standoff Crude oil rose from a six-week low as a tropical storm headed toward the Gulf of Mexico and Iran, the world's fourth-biggest producer, resisted demands to suspend nuclear research.

Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad

About one-fifth of securities issued by Fannie, Freddie and a handful of much smaller quasi-governmental agencies, some $1.5 trillion worth, were held by foreign investors at the end of March. One out of 10 American mortgages is, in effect, in the hands of institutions and governments outside the United States.

Now that the two companies are at risk, how their rescue is handled will ultimately test the world’s faith in American markets. It could also influence the level of interest rates and weigh on the strength of the dollar for years to come, analysts say.

“No less than the international perception of the credit quality of the U.S. government is at stake,” said Richard Hofmann, an analyst with CreditSights, an independent research house with offices in London and New York."

Also at stake is Americans’ future ability to gain access to credit. If foreign companies and governments abandon United States investments, home, auto and credit card loans will be much more difficult to come by.

Never Have So Many Short Sellers Made So Much Money With Stocks Worldwide Investors worldwide are betting more than $1 trillion on a collapse in stock prices.

Economist’s View on Why The Economy Is as GOOD as It Is (and not worse … yet)

Perhaps most importantly, however, is the massive liquidity injections from the rest of the world, or what Brad Setser calls “the quiet bailout.” In the first half of this, global central banks accumulated $283.5 billion of Treasuries and Agencies, something around $1,000 per capita. This is real money – I outlined the likely implications in January. Foreign CBs are happily financing the first US stimulus package; will they be happy to finance a second? Do they have a choice? Their accumulation of Agency debt is also keeping the US mortgage market afloat. Do not underestimate the impact of these foreign capital inflows. If the rest of the world treated the US like we treated emerging Asia in 1997-1998, the US economy would experience a slowdown commensurate with the magnitude of the financial market crisis. The accumulation of US assets is also forcing an expansion of foreign CB’s balance sheets, creating global monetary stimulus that allows the rest of the world to decouple from the US economy, supporting continued US export growth

Commercial bankruptcies soar, reflecting widening economic woes.

Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.

From April through June, 15,471 U.S. businesses called it quits, according to data from Automated Access to Court Electronic Records, an Oklahoma City bankruptcy management and data company.

The Coming Systemic Bust of the U.S. Banking System: “Dead Stocks Rallying”

This past week started with concerns about another systemic meltdown of the U.S. financial system as the insolvency of Fannie and Freddie was revealed and as IndyMac went bust (this third largest bank collapse in U.S. history). But the week ended with a remarkable rally of financial stocks as better than expected results from Wells Fargo, JP Morgan and Citi soothed the fears that major financial institutions were in even more distress than already predicted by market analysts.

Unfortunately, this massive rally of financial stocks in the latter part of the week is just another temporary bear market rally that will fizzle away once the onslaught of bad financial and macro news builds up again.

Paulson braces public for months of tough times

Treasury Secretary Henry Paulson sought to reassure an anxious public Sunday that the banking system is sound, while also bracing people for more troubled times ahead.

The 2008 oil shock

This calculation assumes that the oil exporters will export about 45 million barrels a day of oil.
Each $5 increase in the average price of oil increases the oil exporters’ revenues by about $80 billion, so if oil ends up averaging $125 a barrel this year rather than $120 a barrel, the increase in the oil exporters revenues would be close to a trillion dollars.

Beijing orders half its cars off roads to clear air for Olympics

Authorities forecast that the sweeping traffic restrictions, and measures to shut down polluting factories, would help clear smog over Beijing in time for the Games, which begin Aug. 8.

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T. Boone Pickens' Energy Plan ...

... sounds pretty good to me.

Texas Oilman T. Boone Pickens Wants to Supplant Oil With Wind

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News For Thursday -- Gold, Oil & More

I'm very busy putting the finishing touches on my new oil report. which comes out July 1. Here are a few things to read ...

Tim Iacono over at Seeking Alpha wonders if gold is about to make its next big move higher. And he has chart eye-candy ...Are we really heading for a shooting war with Iran? The Jerusalem post reported Tuesday that former U.S. ambassador to the U.N. John Bolton said that Israel is likely to attack Iran in the time between the November presidential election in the U.S. and the inauguration of the new president. Mr. Bolton also said that he does not believe the U.S. will participate in the attack.

However, CBS thinks the Israelis are trying hard to get the Bush Administration to mount an attack on Iran's nuclear facilities.

What Saudi Arabia giveth, Libya takes away. Libya May Cut Crude Oil Output Because Market Is Oversupplied, Ghanem Says Libya may cut oil production because the market is oversupplied, the nation's top oil official said.

Sean's note -- this is another reason why people shouldn't get so worked up about drilling in ANWR. Let's say it holds oil beyond our dreams and floods the markets. OPEC will just cut production to keep prices high.

Here's a blog I find interesting: BakenShale.blogspot.com

Not everyone is bullish on commodities in the short term. Marc Faber, publisher of the Gloom, Boom and Doom Report, says that Commodities will fall in the next 6 months After a 7-Year Rally. Commodities face a ``correction'' after a seven-year rally, which will help ease global inflation, investor Marc Faber said. Longer-term, he thinks the commodity bull market will last 20 years.

Intellichoice says the best car to own in these expensive-gas times, based on total cost of ownership, is the Toyota Corolla. Personally, I think my next car is going to be a Honda Civic.

The Energy Information Administration expects that global energy demand will grow by 50 percent over the next two decades.

Check out my new gold and energy blog at MoneyAndMarkets.com

Happy Monday -- Oil & Gold Charts & News You Can Use

And here is the news ...

Oil Rises as Saudi Plan to Pump More Fails to Ease Nigeria Supply Concern Oil rose to within $3 of a record on speculation Saudi Arabia's output increase may not raise global supply after an Chevron Corp. pipeline was blown up in Nigeria and a North Sea platform evacuated.

XX Sean’s note – I’m covering Nigeria in my new oil report. What a debacle!

OPEC president says sees no demand for more oil
Oil producers cannot pump more without demand for extra supply, and at the moment that demand does not exist, OPEC President Chakib Khelil said on Monday.

Speculators Are Largest Oil Contract Buyers, Doubling Share, Panel Says Speculators became the largest players in oil futures markets, nearly doubling their share in the past eight years as prices rose to records, in a ``radical shift'' for the market, according to a congressional committee.

“This raises troubling concerns about whether the oil future prices have become delinked from underlying supply and demand fundamentals and whether the commodities markets have become a casino for unscrupulous speculators who profit at the expense of the American people,'” Representative John Dingell, the committee chairman, said in an e-mailed statement.

XX – note -- If the government focuses on this, it could spell trouble for commodity ETFs. I'll watch these developments closely. Congress should heed Sanford C Bernstein analysts Andrew Keen, Ben Dell, Neil McMahon and Hugh Wynne, who wrote in a June 20 note: “Every crisis needs a culprit. Active speculation is a catalyst for market movements, not an underlying cause.''

Oil Refiner Insiders Buy Most Shares Since 2000 in Bet Crude Will Plummet Refinery executives are buying more of their own stock than at any time since 2000, prompting investors to bet that a retreat in oil will boost profits and reverse the biggest share decline in a decade.

Iran Supertankers Can Hold Five Months of Saudi Oil Pledge: Chart of Day Iranian supertankers now in the Persian Gulf could store the equivalent of five months worth of the additional crude oil Saudi Arabia pledged to pump to curb prices, according to ship-tracking data compiled by Bloomberg.

OTHER NEWS

Uranium Soon Fetches $90 as India Reactors Drive Global Demand
The uranium industry's worst year is about to collide with a nuclear construction program in India and China that rivals the ones undertaken during the oil crisis of the 1970s.

The result is likely to be a 58 percent rebound in uranium to $90 a pound from $57 now, according to Goldman Sachs and Rio Tinto Group, the third-biggest mining company. Uranium plunged 57 percent in the past year as an earthquake damaged a Japanese nuclear plant that's the world's largest and faults shut down reactors in the U.K. and Germany.

Record Corn Prices Mean More Expensive Meat, Dairy
In the latest bout of food inflation, beef, pork, poultry and even eggs, cheese and milk are expected to get more expensive as livestock owners go out of business or are forced to slaughter more cattle, hogs, turkeys and chickens to cope with rocketing costs for corn-based animal feed.

Check out my new gold and energy blog at MoneyAndMarkets.com

Monday Is Chart Day -- Oil, Gold, Corn and More

All CNBC can talk about this morning is Lehman Brothers. How many people does that effect? Meanwhile, oil is not pulling back much from its biggest one-day surge EVER on Friday. Don’t you think that deserves more headline time? The average price of a gallon of gasoline in the United States hit $4 for the first time ever Sunday. I think that affects a heck of a lot more people than Lehman Brothers.

More on gasoline prices HERE.

Gold Rises in London as Dollar, Near-Record Oil Heighten Inflation Concern Gold rose for a second consecutive trading session in London as the dollar declined and oil traded close to a record, bolstering demand for the metal as a hedge against a weaker U.S. currency and faster inflation.

Corn Climbs to Record on U.S. Midwest Flooding; Soybeans, Wheat, Rice Gain Corn jumped to a record as rain in the U.S. Midwest flooded fields, delaying planting and threatening to reduce crops. Soybeans, wheat and rice also gained as soaring oil costs and the dollar's drop boosted demand for an inflation hedge.

Now to the charts …

Check out my new gold and energy blog at MoneyAndMarkets.com

$45 trillion to combat global warming ... and other news you can use

$45 trillion needed to combat warming- The world needs to invest $45 trillion in energy in coming decades, build some 1,400 nuclear power plants and vastly expand wind power in order to halve greenhouse gas emissions by 2050, according to an energy study released Friday.

More on this story HERE.

Mexico sees lower oil exports for 2008 Pemex Chief Executive Jesus Reyes Heroles said the state-run company's oil exports were headed for an average of 1.40 million to 1.45 million barrels per day over 2008, around 15 percent below a goal set in Mexico's 2008 budget of 1.683 million bpd. The estimation is also well below an average export level of 1.686 million bpd in 2007.

Crude Oil Rises a Second Day on Supply Concerns, Dollar Outlook ``People are really responding to longer-term supply issues,'' said John Vautrain, vice president at consultants Purvin & Gertz Inc. in Singapore, in an interview with Bloomberg Television. ``Every time we hear good news about some big new find somewhere you have to counteract that with the news that there are a couple of million barrels a day disappearing from the market every year just because of natural declines.''

Corn Reaches Record, Soybeans at Three-Month High on Heavy Rain in Midwest Corn climbed for a third day to a record and soybeans rose to a three-month high in Chicago as excessive rains in the U.S. Midwest flooded some fields, raising concerns about slowing crop development and production losses.

Gold Gains in London Trading Before U.S. Jobs Report; Platinum Also Climbs Gold led precious metals higher in London on speculation a U.S. jobs report will indicate slower economic growth, buoying investor demand for a hedge against declines in the U.S. dollar.

Apache May Take Two Months to Restore Partial Gas Supply to West Australia Western Australian natural gas output may be reduced for the next two months because of an explosion, cutting supplies to Rio Tinto Group, Alcoa Inc. and Newcrest Mining Ltd. at a time of rising metals demand and prices.

China May Auto Sales Grow at Faster-Than-Expected Pace of 16% After Quake China's passenger-car sales grew a faster-than-expected 16 percent last month, as demand spurred by economic growth withstood the effects of the country's deadliest earthquake in 32 years.

Check out my new gold and energy blog at MoneyAndMarkets.com

Oil Surge and More

Oil and natural gas faked us out last week by selling off as the U.S. dollar rallied. But the dollar is rallying on an outlook for stronger economic activity in the U.S. The Labor Department reported on Friday that U.S. employers only shed 20,000 jobs, a lot less than expected. And a stronger economy points to stronger demand for oil and natural gas.

Now, personally, I think that jobs number is more cooked than Emeril Lagasse’s kitchen. But psychology rules this market, and the less-bad jobs number, combined with some other news, like an unexpected improvement in the US services sector, is really making investors feel bullish about the economy.

Shorter-term, oil also might be driven higher by supply concerns. In March, global oil supply fell by 100,000 barrels per day, led by lower supplies last month from OPEC, the North Sea and non-OPEC Africa.

Then on Friday, oil soared after Turkish airstrikes on Kurdish rebel bases in Iraq. The civil war in Nigeria (they don’t call it a civil war, but the fighting seems constant) seems to be worsening, and another oil facility has been attacked. Rebels hit a flow station belonging to Shell's joint venture in southern Nigeria and that some oil production shut down.

In Iran, Supreme Leader Ayatollah Ali Khamenei said Sunday that his country will not bend to international pressure and give up its nuclear program. This raises the chances of a U.S. or Israeli air strike against Iran, the second largest producer in the Organization of Petroleum Exporting Countries.

And demand overseas is rising. According to the International Energy Agency – which is lousy at predicting future demand, but very good at tracking existing demand -- China’s demand rose by 7.8% in February from a year earlier, much higher than earlier estimates of a 5.3% gain. Gasoline demand rose by 22.8%!

According to preliminary data from India, oil product sales – a proxy of demand – surged by 10.9% in February compared to a year earlier. That’s the fastest pace of growth in demand since 2006. Transportation fuels – gasoline, jet fuel/kerosene, and gasoil – jumped by 13.4% year on year.

Recently, we are seeing small, incremental drops in demand in Europe and the U.S. But the surging demand in Asia should more than make up for that.

In other news ...

US ECONOMY

U.S. Service Industries Unexpectedly Accelerated in April, ISM Survey Says Service industries in the U.S. unexpectedly expanded in April, signaling the damage from the housing slump and credit crisis may be dissipating.

ENERGY

Crude Oil Rises on Concern Attacks in Nigeria May Curb Petroleum Supplies Crude oil rose more than $2 a barrel on concern that production disruptions in Nigeria, Africa's biggest producer, will limit supplies.

Saudi Aramco to Lower Oil Prices to U.S., Europe for a Third Month in June Saudi Aramco, the world's largest state oil company, will cut prices of crude oil it exports to customers in the U.S. and Europe for a third month in June.

Nymex Natural Gas Rises on Buying by Traders Who Bet Prices Would Decline Natural gas rose as speculators who had sold contracts in bad bets on falling prices bought the positions back to protect gains or limit losses.

What Uncle Sam Gives in Rebates, OPEC Takes Away, Leaving Economy Stagnant Wal-Mart and OPEC are battling for the tax rebates the U.S. government began handing out last week. The result may be a draw for the economy.

METALS

Metals Surge as Power Rationing Turns Out Lights in World's Biggest Mines Chile's worst drought in five decades and power rationing from South Africa to China mean the price of aluminum, gold, copper and platinum will keep climbing as the lights go out in the world's biggest mines.

Check out my new gold and energy blog at MoneyAndMarkets.com

Friday Chart Fiesta

Looking at this daily chart of the euro, gold and the US dollar, we can see …

Gold, which often moves in sync with the euro, is going lower.

The euro has broken its uptrend and seems to be going lower.

The dollar has broken its downtrend and seems to be going higher.

These trends could come to a head on April 30, when the Fed’s FOMC meets and rate cuts are announced and rate cut intentions are augered.

Here is a chart of the dollar itself …

And after Friday's wild action, let's take a look at oil ...

Yes, we’re all waiting for oil to pull back. But what if it doesn’t until after it racks up another $10 or $20 gain?

You can see how gasoline is very bullish and moving very closely with oil.

But the one to watch is natural gas. Take a look …

Check out my new gold and energy blog at MoneyAndMarkets.com

More Good News on Natural Gas

Commodities took a swan dive this morning as the U.S. dollar rallied hard. Now, the reason being touted on CNBC for the rally borders on laughable -- the "worst may be over" for the banks. But, you can't argue with the rip-roaring rally the dollar enjoyed this morning.

But after selling off, commodities have started to come back -- led by natural gas. Red-Hot Commodity ETF subscribers are long natural gas through the United States Natural Gas fund, of course. Oil and oil stocks (like the XLE) followed shortly afterward. Gold is still trying to walk it off, but don't give up on the metal just yet.

Apparently (so I hear) the spark for the rally in natural gas was this story in the Wall Street Journal ...

Global Trade Boosts Natural-Gas Price

Natural-gas prices in the U.S. have risen 93% since August as power-hungry nations compete in a global market that scarcely existed five years ago. The trend has profound implications for the troubled U.S. economy.

Don't let one day swings in anything -- natural gas, oil, gold, you name it -- change or even make up your mind. Isntead, watch those weekly trends and the fundamentals; that's about the only place we can find honesty on the Street today.

Oh, and as for the dollar's rally? Well, the greenback is still up, but it has given back a lot of those gains ...We'll see what Monday brings.

Check out my new gold and energy blog at MoneyAndMarkets.com

TGIF -- News and Charts

Natural gas may pull back today with oil prices. Just keep the long-term trend in mind ...

And let's keep the long-term trend in oil in mind as well. This is a chart from my upcoming webinar next Tuesday ...
And energy stocks look like a good place to be in this volatile market ...
AGRICULTURE

Rice Advances to Record as Export Curbs Stoke Concern of Food Shortages Rice futures rose for a fifth day, recording the biggest weekly advance in at least seven years, on concern export curbs imposed by China and Vietnam will spread as importing nations struggle to meet their needs. A global food crisis has reached "emergency proportions," United Nations Secretary-General Ban Ki-Moon said.

Global Wheat Harvest Will Advance 6% as Farmers Plant More, Rabobank Says Global wheat production will advance 6 percent to an all-time high this year, as record prices spur farmers to grow more, Rabobank Group said.

CURRENCIES

Yen Heads for Biggest Weekly Loss Since September as Carry Trades Revived The yen headed for its biggest weekly loss against the euro in seven months on speculation financial firms will weather credit-market turmoil, encouraging investors to buy higher-yielding assets funded in Japan.

Crude Oil Declines in New York, Retreating From Record, as Dollar Recovers Crude oil fell in New York, retreating from a record yesterday, as the dollar recovered from an all-time low against the euro, reducing the appeal of commodities.

XX and yet, as my friend and crackerjack currency trader Boris Schlossberg points out, "with economic data continuing to favor the euro – German Producer Prices reached a 15 month high on rising energy costs – it may be just a matter of time before the euro bursts through 1.60."

METALS

Power Generation Shortages Underpin Global Commodities Gains, Goldman Says A shortage of electricity generation that shows no sign of abating is underpinning gains in global commodity prices, according to analysts at Goldman Sachs Inc.

Check out my new gold and energy blog at MoneyAndMarkets.com

News For Thursday -- Agriculture, Energy and More

AGRICULTURE

Philippine Rice Tender Attracts Two-Thirds of Grain Sought as Prices Soar The Philippines, the world's biggest rice importer, received offers for just two-thirds of the grain it sought at a government tender today, stoking concern about a food shortage amid record prices.

Egypt Plans to Reduce Rice Plantings to Save Water, Increase Corn Acreage Egypt, Africa's largest rice exporter last year, will reduce the land allocated for planting the grain to save water and encourage farmers to grow more corn, Agriculture Minister Amin Abaza said.

India Buys 7% More Wheat From Farmers, Boosting Reserves to Curb Inflation India, the world's second-biggest wheat grower behind China, has bought 7 percent more wheat from farmers this year to bolster state reserves that may be used to curb inflation running near a three-year high.
Chicago Rice Futures Advance to Record, Leading Gains in Wheat, Soybeans Rice futures in Chicago soared for a fourth day, reaching a record as Turkey and the Philippines seek to buy the grain amid dwindling global supplies. Wheat, corn and soybeans gained.

White Sugar Trades at Six-Week High as Record Oil Spurs Demand for Ethanol White, or refined, sugar traded at a six-week high in London as crude oil rose to a record, spurring demand for alternative fuel additives such as ethanol. Cocoa and coffee also gained.

METALS

Platinum Gains to Five-Week High on South Africa Power Shortage; Gold Up Platinum climbed to the highest in almost five weeks and gold rose in London on speculation power shortages in South Africa will curb growth in supply as demand for the precious metals increases.

ENERGY

Crude Oil Rises to Record on Unexpected Decline in Supplies, Weaker Dollar Oil rose to a record after the U.S. Energy Department reported an unexpected decline in the country's crude and gasoline inventories and the dollar traded at an all- time low against the euro, boosting investment in commodities.

CURRENCIES

China's Yuan Advances to Post-Peg High as Wen Says Curbing Prices Priority The yuan rose to the strongest since a link to the dollar was scrapped in 2005 after Premier Wen Jiabao reiterated the government's priorities are to prevent economic overheating and temper inflation.

Dollar Rises Versus Euro as Reuters Reports Juncker Says G-7 Misunderstood The dollar rose from a record low against the euro as Reuters reported Luxembourg Finance Minister Jean-Claude Juncker said financial markets have misunderstood the Group of Seven's position on currency volatility.

Check out my new gold and energy blog at MoneyAndMarkets.com

Friday Chart Fiesta

Last week, I was keeping an eye on a potential head-and-shoulders reversal pattern in gold. However, gold did not break the neckline and instead pushed higher. One more niggling worry is that RSI (a momentum indicator) is making a lower high as gold makes a higher high. This is worrisome, so exercise caution. But gold is more bullish now (technically speaking) than it was last week.

I added a gold position in Red Hot Resources yesterday and may be doing more of that this next week. $1,000 an ounce should draw gold like a magnet now.


Meanwhile, the US dollar is looking weaker ...


Perhaps the higher price of oil is weighing on the US dollar ...


Natural gas is looking more bullish than oil ...

Check out my new gold and energy blog at MoneyAndMarkets.com

Charts for Monday

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use For Thanksgiving Eve

Deere Profit Jumps 52%, Beating Estimates, on Demand Outside North America Deere & Co., the world's largest maker of tractors and harvesters, said fourth-quarter profit climbed 52 percent, beating analyst estimates, as demand outside North America countered slowing sales of construction equipment.

Note -- this is exactly the kind of thing I'm talking about in my recent Agriculture report. Demand from farmers -- especially outside the US -- should remain strong even if other parts of the economy slump.

Yen Rises as Widening Subprime Losses May Spur Investors to Reduce Risk The yen rose against all of the world's 16 most-actively traded currencies as losses related to subprime mortgages widened, prompting investors to sell higher- yielding assets funded by loans made in Japan.

BHP May Fail to Fulfill Promise of More Iron Ore With Rio, Analysts Say BHP Billiton Ltd., the Australian mining company bidding to buy Rio Tinto Group, may fail to convince customers concerned about a duopoly of the iron ore trade that the combined company will be able to overcome labor and port constraints hindering production, analysts said.

Corn Price Rises as Dollar Drops, Crude Oil Gains; Wheat Up on Weather Corn futures in Chicago rose for a second day on speculation record oil prices will boost demand for grain to produce biofuels. Wheat futures also rose.

Shell Pitches `Several Hundred Billion' Dollar Arctic Gas Project to Putin Royal Dutch Shell Plc and partners told Russian President Vladimir Putin that developing Arctic gas fields big enough to supply global demand for a decade may cost ``several hundred billion'' dollars.

Check out my new gold and energy blog at MoneyAndMarkets.com

News You Can Use for Thursday

Interesting. US economists dismiss rumors that China may actually start selling its US-dollar denominated forex holdings (US Treasuries) ...

Benjamin Reitzes of BMO Financial Group (NYSE:BMO) says China holds between 60 and 70 pct of its foreign exchange reserves in dollars, and is thus unlikely to begin selling. 'If China were to start a fire sale of its US$-assets, it would face prohibitive losses,' Reitzes wrote today. ' A more likely scenario would be forChina to stop accumulating US dollars, not an outright sale.' He also predicted that further declines in the greenback could lead to a new accord aimed at shoring up the struggling currency.

Marc Chandler of Brown Brothers Harriman is even more dismissive, saying comments made today 'most likely do not reflect policy,' in part because of who made them. 'Cheng Siwei who talked about what the PBOC should do with reserves has in the past made errant remarks that have no bearing on policy,' Chandler said, citing past remarks in which Cheng has proposed that China stop buying US treasuries.

Read the rest by CLICKING HERE.

South African Gold Mining Production Continues to Fall. South African gold production continued its decline by falling 6.5 percent in September compared with the same month last year, Statistics South Africa (Stats SA) said on Thursday.

Furthermore, gold production after seasonal adjustment decreased by 0.8 percent for September 2007 when compared with August 2007.

Also ...

Crude Retreats After Better-Than-Expected Inventory Data.

Crude prices took a break on their march towards $100 Wednesday, retreating $0.33 to $96.37 on the New York Mercantile Exchange, after the Energy Information Administration's weekly inventory report indicated that crude supplies fell by 800,000 bbls. last week, just half the anticipated 1.6M bbls. decline.

One economist said the report "wasn't bad enough" given the sharp drops expected by the market, and that had supplies fallen by 3M-5M bbls., crude could have gushed past $100. Meanwhile, traders who bought crude around $80 less than a month ago may be looking to cash out even though it's practically a given the century mark will be reached.

"We certainly would not risk $16 or more for the last $2 or $3 a barrel," one oil analyst told clients. "Because of this, we have to expect to see a number of professional traders take profits before we actually see $100."

Earlier in the day, futures had touched a new trading high of $98.62/bbl. after the International Energy Agency predicted that worldwide energy usage would rise 50% by 2030, with 45% of that demand coming from India and China.

Despite the overall stretched supply of world oil resources, some are surprised record prices are being set just now, a period generally characteristic of slack demand between the summer cooling and winter heating seasons.

And now, let's look at what's happening in Brazil ...

Brazil Soybean, Sugar-Cane Production Forecast to Rise to Records in 2008 Brazil's sugar-cane crop will rise to a record in 2008 as rising demand for ethanol made from the tropical plant encouraged planting, the government's statistics agency said.

Interestingly enough ...

Brazil's Real Rises to Near 7-Year vs Dollar High on Bets of Higher Flows Brazil's real rose to near a seven- year high on speculation foreign investment flows to local bonds and stocks will rise.

How 'Bout Those Asian Markets? Beginning of the Big Slide or Buying Opportunity? You Tell me!

Asian Stocks Drop Most in 12 Weeks as Dollar Slides, Subprime-Losses Mount Asian stocks fell the most in 12 weeks, extending a global rout after the dollar plunged yesterday, oil slumped and U.S. financial companies disclosed mounting credit-market losses.

The Natural Resource Feeding Frenzy Kicks It Up a Notch!

BHP Billiton Plans to Pursue Rio Tinto Bid, Might Be Biggest Takeover Ever BHP Billiton Ltd., the world's biggest mining company, plans to pursue a takeover of Rio Tinto Group after an earlier approach was rejected, in what may become the largest acquisition in history.

Check out my new gold and energy blog at MoneyAndMarkets.com

Monday Chart Action

Here are some charts of interest for today ...

Check out my new gold and energy blog at MoneyAndMarkets.com

Monday Is Chart Day

Here is some news.

Gold Declines as Rallying Stock Markets May Erode Demand; Silver Advances Gold declined as rallying stock markets eroded investor demand for the precious metal. Silver declined.

Gold Prices May Peak Next Year on India and China Demand, Westpac Says Gold prices may peak in the first half next year driven by rising demand for luxury goods in India and China, according to Westpac Banking Corp.

Crude Oil Rebounds, Climbs Above $65 on U.S. Gasoline-Inventory Concerns Crude oil climbed above $65 a barrel in New York amid concern the U.S. won't have enough gasoline when the summer driving season starts next week.

Corn, Soybeans May Rise as U.S. Crops Fall Short of Demand, Survey Shows Corn and soybeans may rise in Chicago on speculation production in the U.S., the world's largest grower and exporter, will fall short of record demand for livestock feed and crop-based fuels.

S&P/ASX 200 Stock Index Rises to Record, Led by BHP on Metals; CSL Gains Australia's S&P/ASX 200 Index rose to a record high, led by BHP Billiton Ltd. and Rio Tinto Group, as prices of copper and nickel climbed.

Energy Metals Discloses Talks That May Lead to Sale of Uranium Explorer Energy Metals Corp., a developer of uranium deposits in the U.S., said it is in talks that may lead to the sale of the Canadian company. The shares earlier surged to a 12-year high before trading was halted in Toronto. [XX Sean's note – yes, I recommended this! Sweet]

China Growth, Not Paulson, May Force Government to Accept Yuan Revaluation China faces growing pressure to increase the value of the y1uan, and Henry Paulson has nothing to do with it.

And now, on with our show (the charts) …

Last week (on my blog, anyway), I talked about how Chinese gold demand is soaring. That's the good news. The bad news is this (from Resource Investor):

Gold ETF bullion holdings drop substantially The substantial drop in bullion holdings by StreetTRACKS gold shares, the world's largest gold-backed exchange traded fund (ETF), could be signalling reduced exposure by investors due to weaker prices.

Analysts cautioned that a continued outflow could be an indication that further liquidation in the gold market might be on its way.

Bullion held by StreetTRACKS fell 16.6 tonnes, or more than 3%, to Thursday's 469.15 tonnes, which marked the level last seen in mid-February, compared with 485.8 tonnes on Tuesday. The decline came after the bullion ETF saw its metal holding peaked at a record 500.7 tonnes just on April 19.

All in all, I think it's best to wait and see what happens when gold hits its next level of support before buying again.

Silver looks more bullish …

It's hard to imagine silver going up when gold goes down. So maybe this support silver is finding is bullish for gold as well.

Next, let's look at a metal we don't look at as often as we should – copper.

This is a classic decision point, and it should happen this week. Kind of exciting, unless you're long copper, in which case it could be brown trousers time.

So what's the news today …

Copper Advances After Largest Weekly Decline in Three Months; Nickel Falls Copper rallied in London after its biggest weekly decline in more than three months, as a drop in stockpiles signaled growing demand. Aluminum and zinc rose.

So don't buy those adult diapers yet!

Enough metals. On to the energy complex …

Oil could break out. If it doesn't, we could see more indecision as it bounces along in a range. What does gasoline have to say about this? …

Gasoline is accelerating. This is mainly due to lack of refinery capacity. Personally, I think gasoline prices have gone up too far, too fast. When I hear endless bitching about gasoline prices in line at the grocery store, it tells me people are ready to cut back on driving (as I detailed on my blog last week, so far consumers haven't changed driving).

A downward change in driving habits should ease back the throttle on gasoline prices. Indeed, that's part of why I think ALL US corporations should go to mandatory telecommuting twice a week. It would kick al Qaeda right in the wallet.

But let me put that soapbox aside for a minute while we look at one more chart – natural gas …

It looks like a setup for a major breakout. If hurricane season comes early and hard, look out!

Check out my new gold and energy blog at MoneyAndMarkets.com