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Mini-Money Monitor: Commodity Meltdown?


From the commodity angle we need but consider four simple facts...


When I observe the chart below, I fail to see a 'melt-down' in the commodities markets. Indeed, as evidenced in yesterday's Money Monitor focus on the deep correction in metals prices, it seems likely that Gold will close higher on the week, and thus, at a new weekly closing high. Further, the energy markets staged a comeback yesterday, despite rising and sizable supplies of Crude Oil, and Natural Gas threatening to join the party, despite the very same fundamental dynamic.

In the chart, plotting the CRB Index on a weekly basis, I see an upside breakout and strong underlying momentum as defined by a potential breakout to new heights in the 52-Week ROC.

Commodities, melting? Not yet, not with a +40% yr-yr rate of inflation!

If anything, the potential for an upside breakout in the 52-Week ROC suggests a heating up of inflationary pressures on a calendar basis, as calculated within CPI and PPI data on a year-over-year basis. Such a push would likely end the current swing in global CPI data towards less reflation.

From the commodity angle we need but consider four simple facts:

  • The USD will likely finish the week at a new mini-move low, and thus extending its most recent technical breakdown and trend reversal.
  • Platinum will likely finish the week at a new all-time weekly closing high.
  • Gold will likely finish the week at a new bull move weekly closing high .
  • And, the CRB will also, close at a new bull move weekly closing high.

Meltdown not, nuff said.

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