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COMMODITY INSIGHT
152 Ennis Lake Road, Ennis Montana
(December 3, 1997) METALS: One of the most depressing fundamentals for the commodity markets in general is the fact that gold prices continue to slump. On Wednesday of this week, for instance, gold prices fell to another 12-year low when nearby futures traded down to $292 an ounce.
Though the market is quite depressed, from current levels a sharp rally should take place. This is especially true if silver, platinum, and palladium continue to grind higher.
Also keep in mind that there is a strong historical tendency for gold, wheat, and crude oil to move in the same general direction. Today, crude oil put in a modest key reversal along with gasoline and heating oil. If wheat prices were to suddenly rise (as I expect) it would not be out of character for gold prices to suddenly rise as well.
Do not turn bearish on the metal complex or the gold market in particular at this time. It would not take much of a market wiggle for bonds to break, commodity prices to rise, and gold to jump $10 to $15 an ounce.
Jerry F. Welch
COMMODITY INSIGHT |
BARNES BROKERAGE CO., INC. |
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