All aboard the Trump Train. Manic Metals Report 11/12/2024

Metals got hammered as traders realigned positions to jump aboard Trump Economic train. Traders’ long gold jumped back into stocks as the train was leaving the station. Yet the biggest flip was selling gold buy Bit Coin as the new administration is all in on the blockchain technology. Platinum and palladium are also a hit. Eclectic car mandates oil and internal combustion comeback will make for interesting shifts in industrial metals demand.  Aluminum is the main component of electric cars, cobalt nickel, and copper.  Palladium platinum is mainly used in catalytic converters

Worries about the Chines economy and the stimulus not being enough also caused weakness
Yet a spoiler alert.
Despite the changes in outlook the demand for industrial metal will grow under a Trump Economic boom.  In the short-term trade, the volatility.  Long term we are going to see industrial set up for a nice long term position trade.
The gold and silver drops seem to suggest some precious metals run is over. Strength in the dollar was the main reason.

The dollar should correct a little bit and technically both gold and silver have unfinished business on the upside. So while we may stagnate in trading range for a few months our expectations are that we will see gold and silver achieve those objectives later in the year.
In Fact, KITCO News reports some are still very bullish on Gold
They write that ‘the gold rally to new all-time highs has coincided with a seemingly non-stop ascent in the stock market, but that could soon change according to one analyst, who said rising geopolitical tensions and economic concerns could push more investors out of risk assets and into the world’s oldest safe haven.

“The question of ‘why buy gold with the US stock market on a tear and Treasury bills yielding over 4%?’ may be changing, given the metal’s kept pace with the AI-driven S&P 500 total return for about three years,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. “Consensus that US equities will go up under a second term for president-elect Donald Trump might be a top factor buttressing gold.”
According to McGlone, “Gold’s on-par performance with the S&P 500 the past three years may suggest it’s gaining an upper hand vs. the AI-driven stock market.”

“Rising geopolitical tensions are a top gold tailwind, indicated by its almost 50% gain vs. 40% for the S&P 500 Total Return Index (SPXT) and crude oil’s 20% decline since China and Russia announced ‘unlimited friendship’ in February 2022,” he noted. “Our graphic shows what might matter most for the metal going forward: its relationship with the stretched US stock market.”
Interesting? Stay tuned and buy calls or bullish strategies?

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