Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

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What Iron Ore Prices Tell Us About Where Crude Oil Is Headed

By Alex Kimani - Dec 14, 2022, 7:00 PM CST

  • Historically crude oil and iron ore prices are strongly correlated.
  • In the last couple of weeks there has been a disconnect with crude prices falling and iron ore prices seeing a strong recovery.
  • The Chinese zero-covid policy has been destructive for both commodities, but iron ore has made a stronger comeback as measures get eased.

Historically, the prices of two of the world’s biggest commodities, crude oil and iron ore, are strongly correlated, which is hardly surprising given that they are the lifeblood of the global economy including in the transport, industrial production and construction sectors. However, the past few weeks has seen a peculiar disconnect with crude prices declining and iron ore prices enjoying a massive rally.  Indeed, Brent futures hit an intraday high of $99.56 a barrel on Nov. 7, but then dropped 25% to a low of $75.11 on Dec. 9. Meanwhile, spot iron ore 62% FE, as assessed by commodity price reporting agency Argus, jumped 42% from $79 a tonne on Oct. 31 to $112.15 on Dec. 9.

The trajectories for the two commodities have lately reversed with crude oil prices gaining about 5% over the past week and iron ore prices declining about 1%, still not big enough of a change to establish a new trend. According to Clyde Russell, Asia Commodities and Energy Columnist at Reuters, events happening in China are responsible for the ongoing disconnect.


Source: Reuters

Unraveling the mystery of Monday’s decline in iron ore, Russell attributes it–most likely–to the steep increase in COVID-19 cases in China and indications that the country’s healthcare system is floundering. 

Related: Oil Slips On Large U.S. Inventory Build

In recent history, iron ore prices have increased more typically on any news suggesting that Beijing might be able to stimulate its economy, boosting demand for steel as the residential property sector recovers, Russell noted. 

China is both the world’s largest producer and also the world's largest consumer of steel, with the Middle Kingdom buying about two-thirds of all seaborne volumes of the steel raw material.  Hordes of Chinese cities have lately been  rolling out measures to boost housing demand, with Beijing keen to arrest a property crisis.  

Various local governments have issued at least 70 property easing measures after the Politburo called for efforts from local governments to defuse the property crisis, including cutting the minimum down payment ratio and asking parents to extend a helping hand to their children with home purchases by taking out equity on their own homes. 

China’s $2.4 trillion new-home market has shown little sign of recovery, with the economy barely expanded in the second quarter. Meanwhile, mortgage boycotts by homebuyers waiting for apartments to be completed have damped consumer confidence, putting further pressure on home prices, which have now fallen for 11 straight months. UBS estimates the new policies could contribute more than 1 trillion yuan ($142 billion) in fresh financing to the struggling industry. Real estate, contributing roughly a quarter of China’s $17 trillion of output, is a speculative monster that has cannibalized capital better used for other endeavors–a big reason why  President Xi Jinping has been reluctant to bail it out despite the cost.

Meanwhile, Beijing’s zero-Covid policy has been blamed for falling crude prices. 

It’s been almost three long years since China implemented its hyper strict pandemic control policies, imposing consistent lockdowns nationwide, closing borders, and conducting mass-scale COVID-19 tests to contain the spread of the virus. 

With Chinese leader Xi Jinping granted an unprecedented third term as president, the zero-COVID policy appeared cemented in stone. Just a couple of months after reopening the economy, the main districts of Chinese tech hub Shenzhen were forced to go back into lockdown, extended curbs on public activities, and shut down public transport as cities across China continued to battle fresh COVID-19 outbreaks that have dampened the outlook for economic recovery. Beijing handed down orders that residents in six districts comprising the majority of the city’s population of 18 million be tested twice for Covid-19, and workers were forced to work from home.  

But the situation took an unexpected turn last week after Beijing announced the most sweeping changes to its strict Covid-19 guidelines, including relaxing testing requirements and travel restrictions. Further, people infected with Covid-19 but have only mild or no symptoms are now allowed to isolate at home instead of convalescing in centrally managed facilities. This week, Beijing doubled down and announced plans to stop tracking some travel on Monday, potentially reducing the likelihood people will be forced into quarantine for visiting COVID-19 hot spots.

These developments have been positive on energy markets, with both gas and oil prices rallying since Beijing did an about-face on Covid-19. The reopening of China, coupled with Russia’s struggle to find buyers for its oil, could see oil top $100 in 2023, UBS analysts said on Monday. 

By Alex Kimani for

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Understanding Long Term Moves In Gold, What's Going On?

Tyler Durden's Photo
by Tyler Durden
Monday, Dec 19, 2022 - 05:20 PM

Authored by Mike Shedlock via,

To understand what has happened and what is likely to happen, look at faith in the Fed and central banks in general...


A long-term chart suggests the real driver for gold is not inflation, not the dollar, not conspiracies, not China, and not oil, but rather faith in central banks. 

Timeline Synopsis 

  • Nixon closed the gold redemption window on August 15, 1971. The price of gold was $35 an ounce.

  • Faith in the dollar and central banks collapsed. Inflation soared.

  • Gold peaked at $850 per ounce on January 21 1980.

  • That's when Fed Chair Paul Volcker jacked up interest rates to 20 percent to squash inflation.  

  • Volcker was followed by Alan Greenspan, deemed the "Great Maestro". 

  • There was inflation every step of the way yet, gold fell from $850 an ounce to $250 an ounce proving gold is not an inflation hedge.

  • In the period between 1999 and 2002, Gordon Brown, UK Chancellor of the Exchequer (roughly the equivalent of the US Secretary of Treasury), sold off 395 tons of gold, showing great faith in fiat currencies over gold. This event is known as "Brown's Bottom". 

  • To bail out banks that invested in worthless DotCom companies and also lost then huge amounts of money on bad loans to South American countries Greenspan recklessly lowered interest rates and held them too low too long. 

  • Gold took off thanks to Fed stimulus that culminated in a housing bubble and bust.

  • Gold, like everything else sold off hard in that bust. In March of 2009, the Fed suspended mark-to-market accounting of bank assets. The stock market took off and so did gold.

  • The Fed launched QE and so did the ECB. Credit stress in the EMU was also brewing. There was a huge risk of the Eurozone would break apart. Greece was the weak link but fears were of a cascade if Greece left.

  • On 26 July 2012, the President of the European Central Bank, Mario Draghi, delivered a speech at a conference in London that brought a crucial turnaround in the euro crisis. 

  • Mario Draghi said "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.’

  • What did Mario Draghi do? The answer is amusing. Absolutely nothing. However, eurozone bond yield collapsed, temporarily saving the day.

  • In 2016 the Fed and ECB were both engaging in more QE and sovereign yields went negative in Europe and Japan. Gold blasted to a new high, double topping in 2021. 

  • In 2022 the Fed finally got around to hiking. Gold started dropping hard in 2022 despite the fact that year-over-year inflation topped 9 percent. Once again this shows gold is a poor inflation hedge. 

  • The Fed has kept up a steady stream of hawkish talk and here we are.  

Fed's Resolve

It was time to go to the gold sidelines when it was clear the Fed was about to go on a major hiking cycle. 

I made a mistake in not believing the Fed's resolve. By the time I did, I felt there was not much more downside. 

Gold is up nearly $200 an ounce from the lows.

The Fed Projects Interest Rates Higher for Longer at Least Through 2023

On December 14, I commented The Fed Projects Interest Rates Higher for Longer at Least Through 2023

A parade of Fed governors offering the same take.

Gold doesn't seem to believe that although it did react poorly on the announcement.

Q: Can gold and Powell both be right?
A: Yes, in a way.

Gold also reacts to credit stress. It soared following Nixon shock, in the housing bubble, and with QE.

It plunged under Greenspan disinflation and after Mario Draghi made his "Whatever it Takes Speech" 

Meanwhile, the Fed seems hell bent on breaking something and I suspect they will.

Gold Weekly Support Levels 


It's possible gold is reacting to pending credit stress in the US, EU, China, or elsewhere. It's possible that the $200 bounce is purely technical off strong support at $1650. 

$1450 is also strong support. 1550 has moderate support. There is pretty strong resistance in a range $1850 to $1900.

If you believe the Fed will produce some uneventful soft landing with steady disinflation, gold may not be where you want to be. 

Meanwhile, talk on Twitterland is of a new gold repricing model, of oil priced in gold, of yuan backed by gold, of 9 year cycles, and central bank buying gold was bearish then and bullish now, with price targets of $9,000. All that discussion seems more than a bit silly to me.  

Finally, the lead chart shows gold is in a major 10-year cup and handle setup, normally a bullish formation. And typically, the longer the consolidation, the bigger the move when it happens. 

The other side of the coin, as addressed in my previous post, is that bullish formations and support levels often fail in bear markets while resistance and bearish formations fail in bull markets. 

That's both sides of the gold case in one post without all the hype. 

What About the Dollar?

Don't fall into the trap of thinking gold always moves with the dollar. With the US dollar index at 90, gold has been at $250, $1,400, $1,200, and $600. 

On a short term basis gold tends to move with the dollar, but sometimes, even for long periods of time, it doesn't. 

And while price correlation tends to be present, magnitude isn't which is how you get $1,400 gold and $400 gold with the dollar index in the same place.

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COMEX: Silver Registered Ratio Falls to 11.1% – Lowest in 22 Years

December 17, 2022  by SchiffGold   0   0

The drainage of silver from Comex vaults since the start of the year has been nothing short of spectacular.

This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.

Registered = Warrant assigned and can be used for Comex delivery, Eligible = No warrant attached – owner has not made it available for delivery.

Current Trends


Gold is seeing its first increase in Registered inventory since April. That said, over December, there has been a mild net decrease in metal in Comex vaults of 100k ounces.


Figure: 1 Recent Monthly Stock Change

According to Comex reports, there are over 11M ounces of Gold in the Registered category. If so much metal is readily available for delivery, why are market participants moving metal from Eligible to Registered?

The short answer: there are not 11M ounces standing ready for delivery. Most of it is listed there for optics which was put in place shortly after the stress in the Comex system that occurred back in March 2020 (see Figure 8).


Figure: 2 Recent Monthly Stock Change

Since the start of the December contract, the amount Pledged has been steadily increasing again. Pledged is a subset of Registered but is actually not available for delivery because it has been pledged as collateral. This essentially inflates Registered by the amount shown below. Another tool to make the Registered category look bigger than it is.


Figure: 3 Gold Pledged Holdings


The supply of silver has been shrinking even more rapidly than gold. The drainage since the start of the year has been nothing short of spectacular. 48.5M ounces have left Registered since Jan 1. That represents more than 50% of the balance of 82M ounces last Dec 31.

After all this stress on the system, the Comex was only able to add a net 300k ounces of metal so far this month.


Figure: 4 Recent Monthly Stock Change

Much of the inflow came at the beginning of the month and has already been leaving since. It’s very likely that by the end of December, the net change in inventory is actually negative.


Figure: 5 Recent Monthly Stock Change

There is another major indication that shows inventory might be much smaller than is reported. As of yesterday, only 77.6% of contracts standing for delivery have actually had their metal delivered. Shorts are on the hook for deciding when to deliver the metal, so why are they dragging their feet? Through the 16th, this is the least amount of metal delivered as a percent of Open Interest on First Notice back to at least Jan 2020.


Figure: 6 Delivery Volume After First Notice

Another odd data point is the number of net new contracts after first position. There have been some months, like last July, where net new contracts are negative throughout the month. However, while this month is still positive, it went up and then reversed back down. This means that there are cash settlements happening way late in the contract.

Again, why? This does not usually happen!


Figure: 7 Cumulative Net New Contracts

Let’s look back at the vaults. The table below summarizes the movement activity over several periods to better demonstrate the magnitude of the current move.


    • Over the last month, gold has seen a net inventory decrease of 2.6%
        • This is being driven by 1.2M ounces leaving Eligible vs only 608k ounces being added to Registered
    • Since last year, the total amount removed exceeds 10M ounces of gold


    • Silver continues to see Registered supplies fall, with 1.6M ounces being removed over the last 30 days
    • Eligible took a beating in the latest week, dropping almost 2M ounces


Palladium and platinum are much smaller markets but that may be where the market breaks first.

    • Palladium saw a light increase as the delivery month got started
    • Platinum inventory is down 12.1% over the last month as it prepares for the January delivery month
        • It will not take many contracts standing for delivery to fully deplete Platinum from the vaults


Figure: 8 Stock Change Summary

The next table shows the activity by bank/Holder. It details the numbers above to see the movement specific to vaults.


    • The last month has seen net inventories fall across all vaults aside from a negligible increase in Manfra
    • Brinks saw supplies fall by 7%


    • Silver has seen some big moves over the last month:
        • Manfra increased supplies by 4M ounces or 40%
        • Delaware also saw supplies increase 2M ounces or 5%
        • JP Morgan was on the other side, losing 3.8M ounces
        • INT Delaware saw 264k ounces disappear which was 21%


Figure: 9 Stock Change Detail

Historical Perspective

Zooming out and looking at the inventory for gold and silver shows just how massive the current move has been. The black line shows Registered as a percent of the total. As gold December delivery has started, you can see that Registered quickly moved from 45% to 50% of the total inventory.

As noted above, vault totals are still falling. This move into Registered is coming at the expense of Eligible. If there is still such a massive supply of Registered, why are banks scrambling to add metal back from Eligible?


Figure: 10 Historical Eligible and Registered

Despite silver seeing a net increase in inventory over the month, Registered continues to fall. The silver Registered Ratio reached as low as 11.1% of total inventory on December 7th. This is the lowest the ratio has been since at least January 2000!! The old low was 14.7% back in December 2016. The full history really demonstrates the magnitude of the current move.


Figure: 11 Historical Eligible and Registered

The chart below focuses just on Registered to show the steepness of the current fall. In Feb 2021, Registered surged to as high as 152M ounces. That number now sits around 33M, which is a net fall of 119M ounces (78%).


Figure: 12 Historical Registered

Comex is not the only vault seeing big moves out of silver. Below shows the LBMA holdings of silver. It should be noted that much of the holdings shown below are allocated to ETFs. Regardless, total inventories have fallen every single month since last November. Holdings fell below 1B ounces in June and now sit at 840M ounces as of November.


Figure: 13 LBMA Holdings of Silver

Available supply for potential demand

These falls in inventory have had a major impact on the coverage of Comex against the paper contracts held. There are now 3.6 paper contracts for each ounce of Registered gold within the Comex vaults. This is down from the recent high of 4.5 seen in November.


Figure: 14 Open Interest/Stock Ratio

Coverage in silver is far worse than in gold with nearly 18.3 paper contracts for each ounce of Registered silver. This is down slightly from the recent high when coverage was as thin as 20.4 paper contracts for each physical ounce in mid-November. This means a bit more than 5% of silver open interest would need to stand for delivery to wipe out Comex vaults entirely of Registered.


Figure: 15 Open Interest/Stock Ratio

Wrapping Up

The physical demand for gold and silver has continued unabated for months. This is the first month where the net flows have slowed, which is ironic given the historically strong delivery month of December.

Taking a pure data hat off and putting on a speculator hat… here is what I think:

Inventories are much thinner than the data shows. We have perhaps reached the bottom of metal available for delivery at current prices. This is why silver is seeing so many contracts remain unfulfilled AND why we have also seen a dip in net new contracts this late in the delivery window. There is simply no metal available so it is not being delivered.

Gold is a few months behind silver and is also a deeper market, but the same trends are starting to emerge.

This theory could be put to the test as soon as the end of December. Platinum is facing its major delivery month with very limited supplies available. If someone wanted to stress the Comex system, they could easily stand for delivery in amounts exceeding what’s available.

If I had to bet though, I don’t think the Comex will break on Platinum. What I will be watching is what tricks are used to satisfy demand. It can manifest itself in the data in multiple ways (e.g., cash settlements, a larger dive into close, etc.). Whatever happens, it will likely be a preview of what we can expect in silver and then gold in 2023 and 2024. Stay tuned!

Data Source:

Data Updated: Daily around 3 PM Eastern

Last Updated: Dec 16, 2022

Gold and Silver interactive charts and graphs can always be found on the Exploring Finance dashboard:

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A New Type Of Oil And Gas Funding Is Booming

By Tsvetana Paraskova - Dec 24, 2022, 6:00 PM CST

  • Oil and gas producers are diversifying their funding sources.
  • Energy asset securitization is a new type of funding that is quicking gaining in popularity. 
  • Oil and gas securitization offerings could be beneficial to both investors and producers, Daniel Allison, energy finance partner with law firm Sidley Austin LLP, said. 

As banks have pulled back from funding oil and gas operations and other traditional sources of financing such as equity investment or reserve-based lending (RBL) facilities are drying up, private U.S. oil and gas producers are looking at a booming market for alternative funding.      

That’s the proved developed producing (PDP) securitization, in which an oil or gas producer issues bonds in an asset-backed securitization (ABS) transaction. In other words, upstream producers use the cash from their oil and/or gas production as collateral for the notes placed with investors.  

Energy Assets Securitization 

The first such energy asset securitization took place in 2019, but it has quickly gained popularity over the past year as many private producers look to diversify their funding sources. 

“Securitizations backed by oil and gas assets help diversify funding sources for companies that would typically access capital from more traditional sources, such as reserve based lending (RBL) facilities, high-yield bond issuance or equity investment,” Fitch Rating said in early 2020 when this type of funding was brand-new and the pandemic hadn’t crushed oil demand yet.

“The newly issued transactions provide stable cash flow as depletion rates are fairly predictable depending on the age of the wells and the overall diversification,” the rating agency noted back in February 2020. 

Even during the pandemic and the volatile prices in 2020 and 2021, oil and gas proved developed producing (PDP) securitizations showed much less volatility, “largely because of commodity price hedges and structural features of the securitizations,” credit ratings firm DBRS Morningstar said in May 2021. 

The performance of PDP securitization remained resilient during Covid, despite high volatility in oil and gas prices and operator bankruptcies during the pandemic, Fitch Ratings said in a report in September 2021. 

“Required hedges on a majority of production volumes limit the effects hydrocarbon price fluctuations have on expected revenues. Additionally, PDP production has low breakeven costs, as the majority of capex costs have been incurred,” the credit rating agency said. 

Booming Energy ABS Market 

In 2022, the oil and gas asset securitization market has really blossomed, with energy ABS deals tripling in value from 2021, according to data from Guggenheim Securities cited by Reuters. So far this year, private firms have sold to investors $3.9 billion in PDP securitizations, up from just $1.2 billion last year. 

This year also saw the single-largest securitized financing for a U.S. energy producer, backed by a portion of its producing assets, since the PDP securitization funding deals began three years ago. 

That was a transaction in October for $750 million securitized financing for natural gas producer Jonah Energy LLC, a Denver-headquartered firm operating in the Jonah and Pinedale Fields in Sublette County, Wyoming. Jonah Energy successfully closed its first securitized financing transaction by offering $750 million fully amortizing notes backed by a portion of its producing assets. 

Jonah Energy’s assets and operations are located within the Greater Green River Basin in Sublette County, Wyoming, and consist of over 2,400 producing wells and over 130,000 net acres located in the Jonah Field and surrounding area.    

“I’m pleased to have completed a long-term financing transaction that completely pays down our RBL, which positions us with a strong balance sheet to pursue the significant drilling opportunities that we have on our acreage and strategic opportunities that may come our way,” Jonah Energy’s President and chief executive Tom Hart said. 

Guggenheim Securities, which was the sole structuring advisor, book-running manager, and placement agent of the offering, said that Jonah Energy’s was the biggest asset-backed securitization completed to date.  

“This ABS transaction, which represents the largest PDP securitization completed to-date and the third 144A that Guggenheim Securities has structured for the energy sector, reflects the confidence of industry leaders and market participants in the suitability of energy-related ABS in the market,” said Anuj Bhartiya, Senior Managing Director in Guggenheim’s Structured Products Origination team.  

PureWest Energy, Wyoming’s largest natural gas producer, successfully closed in August a second asset-backed securitization—after one last year—offering $365 million of asset-backed notes collateralized by a portion of PureWest’s producing natural gas assets. The transaction followed PureWest’s initial $600 million securitization in November 2021. 

PureWest Energy expected to distribute the proceeds from the notes offering, together with excess cash on PureWest’s balance sheet, to its equity holders in the third quarter of 2022. 

Oil and gas securitization offerings could be beneficial to both investors and producers, Daniel Allison, energy finance partner with law firm Sidley Austin LLP, wrote last year in Hart Energy. Investors have a relatively predictable cash flow profile of an oil and gas PDP, so they—and rating agencies—see production risk as “a tolerable variable,” Allison says. Producers, for their part, can use energy asset securitization to either diversify their capital structure or tap this alternative market when others are less favorable, according to Allison.  

By Tsvetana Paraskova for

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2023 Economic Forecast Gold/Silver, Dollar, Bitcoin, Stocks

Dec 12 - Chris Vermeulen

(30 minutes)

Dec 21 – Gareth Soloway

(31 minutes)

Both of these guys are chart technical traders with a very good history of correctly calling trends.  Soloway has repeatedly been spot-on with Bitcoin prices, and Vermuelen hit it right on the end of year stock / precious metals rally.


For 2023, there is a difference in their forecast with respect to the Dollar. 

Chris sees the DXY (dollar) moving higher for a period of time which will push Gold/Silver prices lower, and then later in the year buying opportunities for precious metals will present themselves as a Gold/Silver bull market begins its rise.

Gareth sees the DXY moving lower and precious metals trending higher.


Both guys see stocks beginning a long, ugly slide south in 2023.

Chris warns that it can be tricky to play inverse ETFs (e.g. HIBS, FNGD, SQQQ).  Gareth has repeatedly pointed out that Apple is way over valued, and is a strong weighting to the NASDQ valuation.  If it breaks below the $135 level solidly, then south it may go.

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Famous Edward Dowd (ex-Blackrock Fund Manager who had tremendous returns) is interviewed by Aubrey Marcus in this Video.  The last half of the video gives excellent insights on what to expect with the economy in 2023 in lieu of his team's research.

Edward Dowd's recent book and WEBSITE -


Chris Vermeulen walks a person through charts and points to what to expect in 2023.  14 minutes.

2023 Precious Metals Super Cycle - Gold, Silver, Miners, SP500, and Dollar


Kitco News interview - 20 minutes

Gareth Soloway: Bitcoin to target $9k, S&P 500 to fall 25% in 2023, no early Fed rescue, Natural Gas

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Wed 1/11/2023 DXY midmorning

The dollar index steadied above 103 on Wednesday as investors look ahead to the US CPI report due later this week to see whether it will confirm that inflation is trending lower. Federal Reserve Chair Jerome Powell also avoided making comments on the outlook for monetary policy in a speech on Tuesday, but he said that “restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.” Moreover, Fed Governor Michelle Bowman said the central bank has more work to do to curb inflation, noting that more rate increases are needed. Meanwhile, the dollar index remains close to its lowest levels in seven months on growing expectations that US inflation will continue to ease, while a budding rally in risk assets weighed on the currency further

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Gareth Soloway is interviewed by Greg Dickerson on January 14, 2023 - Saturday


As Gareth correctly predicted weeks ago, Bitcoin has spiked to around 20k or so.  They discuss possible short term directions on Bitcoin.

!!!! - S&P Short Term forecast - Gareth is starting to short the S&P and other stocks in an expected downturn in the market direction.  Graphs are shown.

Edited by Tom Nolan

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