🟡 Gold has broken above US$4,600/oz as the US Treasury’s aggressive debt buyback plan gives commodities another boost.
The metal is up 13% over the past month, while silver, copper and zinc have also rallied.
Former Goldman Sachs commodities chief Jeff Currie says the moves signal the next stage of the commodity bull cycle, driven by tight physical supply, currency debasement and policy intervention.
“Commodities are telling you something,” he says.
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We have absorbed ~300MM Bbls from global SPRs and ~140MM Bbls from floating storage in the Strait, and this has masked oil's inherent tightness, as seen in this chart with visible onshore inventories flat for the past 2 months. No more. With ~8MM Bbl/d of Middle Eastern production shut-ins, SofH exports <10MM Bbl/d, the US and Iran locked in a stalemate, and SPR withdrawal rates slowing, onshore inventories should now begin to steeply draw, and with Chinese imports up ~0.6MM Bbl/d August/July and end consumer demand strong, we think some of the strength in products (record high diesel crack spreads) will bleed into crude oil. For stock selection we are still using $70WTI for 2027, but if the status quo persists for much longer, our floor price will soon have to move up as we continue to struggle to answer the most important of questions: how does this end???
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