What's Driving Gold and Copper?

What's Driving Gold and Copper? - Blue Line Capital (bluelinecapitalwealth.com)

#CNBC #copper

Transcript:

GLD the GDX, new 52 week high today, Jeff, the graph at Renaissance says the gold consolidation looks viable. Yeah, you agree with that? I'm watching gold, of course. Yeah, I agree with it. Now, if you're trading commodities, and I do trade commodities or run a gold metals fund, you have to pay attention to the technicals. And so yes, gold came off extremely sharply in April, it looked like it was capitulating a bit. But on the selling, there's been very low volume, and it's built out a nice bull flag and very constructive pattern, it's moved out above that now there's fundamentals behind this to the US dollar in some favorite from from the US dollar should weaken if the Fed were to start cutting rates. And on average, once the Fed does that first rate cut gold averages within 30 days a 6% return. But let's also talk about central banks around the world, China 18 straight months of gold buying, though, this 18 month was a little bit slower. BRICS Brazil, Russia, India, China, South Africa, they are buying gold hand over fist, right? Yeah, I mean, it's done. It's been an animal recently. Now, a lot of this had started with China cutting down the smelting. And really what the reason why they cut down the smelting about a month and a half ago was because the raw material, there was not enough supply of it. And so they couldn't make the high grade copper that goes into this infrastructure spending. So there is a lack of supply and over demand for copper right now southern copper is when most pure plays and copper when the best run copper mining companies in general, we really like that. Why do you think any of this metals movement is because there is new found optimism around China and what you know, some perceives to be a legit recovery?
Yeah, you know, that's a great question. I think there are lots of variables are going into this that number one, we talked about the onshoring again, so the industrial metals, silver, etc, are going to play a part in that. Look, I can make a case for gold being inflation hedge or being the opposite of that. So I don't know if you look at a 10 year, 20 year 30 year chart of gold, you've wasted a lot of money, you've missed a lot of opportunities, if you kept it there. It's a store of value, somewhat more so than Bitcoin, which is not a store of value at all. But look, it's driven by momentum again, so we've seen the commodity move, Shannon did a great job calling it early. I just think these are always always trades. They're not investments.
It's not a coincidence that the monster move happened yesterday. Yeah, jobless claims came a little higher than expected but the trade balance data from China big increase in imports and exports that that was I think the big driver there. All right, up next we're gonna have the trade on target.

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