Libya’s largest oil port, Es-Sider, is on the cusp of restarting loadings, which would lift the most important hurdle standing in the way of a return to normal exports following the end of civil war, the country’s oil chief said Thursday.
Dollar breakout causes gold tremors
The Dollar Index broke through resistance at 80.00, signaling a primary advance to 85.00. Rising 63-day Twiggs Momentum indicates a strong up-trend.
* Target calculation: 80 + ( 80 – 75 ) = 85
The stronger dollar caused spot gold to weaken, testing the band of support between $1550 and $1600/ounce.
Gold is also testing the lower trend channel on the weekly chart. Cross of 63-day Twiggs Momentum below zero warns of a trend reversal. Failure of support at $1550 would confirm a primary down-trend.
* Target calculation: 1600 – ( 1800 – 1600 ) = 1400
CRB Commodities Index is similarly testing support at 292. Breakout would offer a target of 265*.
* Target calculation: 295 – ( 325 – 295 ) = 265
Brent Crude is testing medium-term support at $105/barrel. Failure would indicate a test of the lower trend channel.
Some readers questioned why gold and stocks are falling simultaneously — one normally rises when the other falls. A possible explanation is that expectation of quantitative easing, both from the Fed and ECB, has been supporting both markets. As prospects of QE recede, inflation forecasts will be lowered and demand for inflation-hedge assets (stocks and commodities) will fade. We should see a corresponding rise in bond prices (and falling yields) as a result.
Bulk trouble – macrobusiness.com.au
These three commodities [thermal coal, coking coal and iron ore] make up half of Australia’s terms of trade. The first few months of next year are not going to be kind to the TOT. Not kind at all.
via Bulk trouble – macrobusiness.com.au | macrobusiness.com.au.
Thermal coal:
Coking coal:
Iron ore:
Safe haven demand for dollar and gold eases
The Dollar Index is testing support at 78.00. Narrow consolidation above the support level indicates weakness. Recovery above 79.00 would relieve this, while failure of support would warn of another test of primary support at 75.00. Rising 63-day Twiggs Momentum, well above zero, however, suggests continuation of the up-trend.
* Target calculation: 80 + ( 80 – 75 ) = 85
Spot gold is also weak as safe haven demand for both the yellow metal and the dollar has eased. Reversal below $1670 would signal another test of primary support at $1600. Declining 63-day Twiggs Momentum suggests further weakness but the long-term outlook remains bullish with the indicator comfortably above the zero line.
* Target calculation: 1800 + ( 1800 – 1700 ) = 1900
Increased tensions with Iran are supporting the price of Brent Crude above $105/barrel. Narrow oscillation of 63-day Twiggs Momentum around the zero line indicates uncertainty. Failure of support (and respect of the descending trendline) would indicate another primary decline with a target of $85*. Breach of primary support at $99 would confirm.
* Target calculation: 100 – ( 115 – 100 ) = 85
The CRB Commodities Index respected its descending trendline, suggesting a primary decline to $265*. Follow-through below short-term support at $305 would strengthen the signal, while breach of primary support at $295 would confirm. The Aussie Dollar and Canada’s Loonie both closely follow commodity prices and can be expected to follow the CRB index lower.
* Target calculation: 295 – ( 325 – 295 ) = 265
Heard on the Street: Australia’s Juggling Act – WSJ.com
Economists expect 2012 will see a slowdown in the economy of China, Australia’s biggest trading partner. China’s gross domestic product growth could slip to around 8% from more than 9% this year, which will lead to lower demand for commodities. Already, the Reserve Bank of Australia’s index of commodity prices—a weighted basket of Australia’s resource sector exports—has fallen sharply this year. The central bank says the economy’s resources-led surplus may have hit its peak and could decline “somewhat” from here.
via Heard on the Street: Australia’s Juggling Act – WSJ.com.
Copper Bets Flash a Warning – WSJ.com
“….Copper is telling us that while the U.S. equity markets are being priced by such frivolous things as U.S. holiday retail sales, the global economy is experiencing a deceleration in growth [that will become evident] in the first half of next year,” said Jason Schenker, president and chief economist at Prestige Economics LLC.
ETF Investors Go for Gold
BlackRock, the nation’s largest exchange-traded fund purveyor, said Wednesday that exchange-traded funds that invest in gold generated $4.8 billion in net new assets in November. That meant gold outperformed any other category of ETF, including fund that invest in bonds or stocks…….The rush to gold reflected increasing investor concern that gold is a safer place to put money than currencies or sovereign debt, given the European debt crisis and the high deficit and debt levels in the United States, according to Kevin Feldman, managing director for the iShares line of exchange-traded products from BlackRock.
The Oil Drum | Is It Really Possible to Decouple GDP Growth from Energy Growth?
Prior to 2000, world real GDP (based on USDA Economic Research Institute data) was indeed growing faster than energy use, as measured by BP Statistical Data…… Since 2000, energy use has grown approximately as fast as world real GDP–increases for both have averaged about 2.5% per year growth. This is not what we have been told to expect.
Why should this “efficiency gain” go away after 2000? Many economists are concerned about energy intensity of GDP and like to publicize the fact that for their country, GDP is rising faster than energy consumption. These indications can be deceiving, however. It is easy to reduce the energy intensity of GDP for an individual country by moving the more energy-intensive manufacturing to a country with higher energy intensity of GDP.
What happens when this shell game is over? In total, is the growth in world GDP any less energy intense? The answer since 2000 seems to be “No”.
It seems to me that at least part of the issue is declining energy return on energy invested (EROI)–we are using an increasing share of energy consumption just to extract and process the energy we use–for example, in “fracking” and in deep water drilling. This higher energy cost is acting to offset efficiency gains.
via The Oil Drum | Is It Really Possible to Decouple GDP Growth from Energy Growth?.
Crude oil
Brent Crude again found support at $105/barrel. Breakout above the trend channel and resistance at $115 would signal the end of the bear-trend and another test of $125. Recovery of 63-day Twiggs Momentum above zero would likewise suggest a primary advance. Failure would re-test primary support at $99.
* Target calculation: 115 + ( 115 – 105 ) = 125
Commodities
CRB Commodities Index is headed for another test of the descending trendline. Upward breakout would be a bullish sign, indicating that the down-trend is weakening — especially if accompanied by a 63-day Twiggs Momentum cross to above zero. Reversal below primary support at 293, on the other hand, would signal another decline with a target of 265*.
* Target calculation: 295 – ( 325 – 295 ) = 265