According to Goehring & Rozencwajg managing partner Leigh Goehring, commodities could be the investment to hold during the next recession. Strategists at Credit Suisse say a drop below $1,691/76 for gold will reduce risks at least in the next 1-3 months.
“Commodities will make a lot of money no matter what”
Leigh Goehring says it’s not recommended to start selling commodity holdings based on recession fears. The main reason for this is that commodity markets are not like the 2008 crisis. Also, traders run the risk of bottoming out and missing out on the next big rally. Because commodity prices are cyclical. And when they become extremely cheap relative to financial assets, they represent excellent opportunities that lead to years of bull markets. Goehring makes the following statement on the subject:
At the end of a commodity cycle where all investment is recovered, you buy commodities cheap. It hardly matters what happens next. Periods of radical commodity impairment are related to the natural resource capital expenditure cycle. Also, it is this capital expenditure cycle that leads to a huge performance boost going forward.
According to Goehring, after radical underinvestment over the past decade, the commodities market is in this position. In this context, he makes the following assessment:
This will be ten years of the scarcity of everything. And it’s like being played. People are worried about a recession, an aggressive Fed and global financial panic. All of this is possible. But as long-term investments, commodities will make a lot of money regardless. How do we know this? We have a wonderful analogy in 1929.
“From now on, gold will be the leader”
Goehring points to energy markets, metals, agriculture and gold. Starting from this, he records:
There has never been a commodity bull market led by gold. And oil has a chance to reach $200 a barrel in the next six months. Also, the US gas price is likely to converge to the international gas price. This will cause the destruction of demand. Also, this will probably be the time to switch your investments from energy to metals. From the moment the decade begins and ends, gold will be the leader.”
Signals for gold price: buy direction
Goehring closely monitors the long positions of commercial traders and the short positions of gold speculators. On this subject, he makes the following statement:
We need to look at the last major buying opportunity in gold in August and September of 2018, when gold dropped to just under $1,200 and rose 75% over the next two years. One of the most interesting things to watch was the trader activity on the gold COMEX exchanges.
“For the price of gold this year, a potential bottom: $1,600”
Traders are longing and speculators are shorting. According to Goehring, this also signals an excellent entry point. However, Goehring says the gold market still has a long way to go. In this regard, he notes:
Traders are still net shorts and speculators are still net longs. If we were to make a real spin on gold psychology, this would be the end. For gold, a potential bottom this year could be around $1,600. This will be the 50% Fibonacci retracement. So we’re not that far away. It’s possible that this is a natural stopping point on the downside.
Levels to watch for gold price
cryptocoin.comAs you follow, gold is on the decline after higher-than-expected inflation data in the US. Credit Suisse’s strategists say a drop below $1,691/76 will reduce risks, at least in the next 1-3 months. In this context, strategists draw attention to the following levels:
We continue to emphasize that a close break below $1,691/76 will be enough to complete a major ‘double top’ that will reduce risks for at least the next 1-3 months. We note that if this top is triggered, the next support will be seen at $1,618/16, then $1,560 and finally $1,451/40. Only a convincing break above the 55-day average of $1,746 is likely to confirm further changes in the 2-year range. The next resistance will be seen at the even more important 200-day average, currently at $1,833.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.