Deflation and Weaker Metals Prices

June 25, 2020

by Rob Zdravevski

The set up in the price of Copper ($2.66) suggests that it moves lower.

When ?

Well, I say soonish……

However, patience is important when waiting for a “trade” or thesis to develop, confirm or even mature.

I have the same (albeit early) negative view for others metals such as Silver, Platinum and Gold.

Weaker demand coupled with a stronger US Dollar and deflationary pressures, should result in prices falling.

My original “short” Macro calls were posted on June 8th (back then Platinum was $842 then, now $803 and Silver was $17.72, now $17.58) and these tie into my musings about Debt Deflation (which I hope to expand on in future posts) along with a miffing about not confusing Gold is being the equivalent of money.

Although my “Short” Gold view may seem “long in the tooth”, I want to remind readers that this “call” is only 6 weeks old and for some context, Gold has only moved 2% higher against my original US$1,730 Short price.

For those who don’t directly “short” these commodities, the job at hand is to identify which assets or securities will be affected by my prediction and then to be positioned for the buying opportunities.

At a later stage, I’ll re-visit the notion that commodities are trading at lows not seen for decades when compared to equities. But that is for later….

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