An important junction lies ahead as fears about China have returned to the marketplace despite two days of Chinese holidays finishing out the week.
We won’t suggest that the recent lows in many commodities are solid, but value-hunt buying of copper assets by Carl Icahn, a $4.00 single-day rise in crude oil prices, and a 1,000-point, 2-day bounce in the Dow suggest that sentiment was overdone on a number of fronts.
We have to predict a major agricultural and financial juncture just ahead.
The US economy has bulldogged its way to growth in February, despite adverse weather, ongoing energy sector layoffs, adverse foreign exchange rate action and periodic talk of rising US interest rates.
Recently a talking head on a major television business program was lamenting the ongoing pressure on equities due to the weakness in energy-related shares.
While the pace of the world economy remains disappointing to most commodity markets, a long list of central banks are exhibiting a commitment to a return to growth.
What have we learned in the month of October? We have learned once again that free markets work and that market forces, given time, will provide a cure.
The gold market did manage a range-up attempt on Monday, and the yellow metal has spent most of the early Tuesday trade above the prior closing level.
The spec net long in physical commodities continues to decline, fears of global slowing (particularly from Europe and China) are front and center, and the ever-strong US Dollar is adding into the bear case for commodities.
The outlook for the global economy has improved marginally, with a series of positive US data providing some respite from the generally discouraging economic news flowing from Europe and China.