The price of gold is soaring more than 3% today (Thursday) and is now up more than 20% year to date. But our forecast shows the price of gold climbing even higher in 2016.
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Commodities prices have essentially crashed.
The Thomson Reuters/CoreCommodities CRB Commodity Index peaked near 365 in 2011.
Today it sits at just 189, a brutal loss of more than 48%. Gold, silver, oil, natural gas, uranium, coal, iron ore, and copper are all at or near multiyear lows.
It's been devastating for companies producing them and countries dependent on exporting them.
But by definition, commodity production is a cyclical business, and what goes down simply must come up.
In fact, there's so much upside potential at the other end of this sector-wide slump that my eyes have been glued to some important indicators - including some that few others are looking at.
When a bottom and recovery develops, it will appear here first. That will give us the earliest opportunity to capture gains on the way up.
Gold prices today (Thursday) were flat as anxious investors sit on the sidelines ahead of the conclusion to this afternoon's FOMC meeting.
In early morning trading Thursday, spot gold prices were off a modest $1.20, or 0.11%, at $1,117.80 an ounce.
A few legendary influencers in investing are making huge bets right now on commodities, an area that's faced - and continues to face - some pretty strong headwinds.
Famed hedge fund manager Stanley Druckenmiller recently made a $323 million bet on gold. Carl Icahn took an 8.5% position in copper miner Freeport-McMoRan Inc. (NYSE: FCX).
After nearly five years of a correcting bear market, platinum prices have fallen by nearly half, from $1,800 in 2010 to $1,003 on Sept. 8.
To stem the tide, some of the world's largest producers of the precious metal are cutting production.
Gold prices today (Wednesday) fell as U.S. equities climbed following a two-day rout. In mid-morning trading today, the gold price dipped $16, or 1.4%, to 1,125.40.
A stronger dollar and a positive U.S. durable goods order report also drew investors away from gold and into stocks today.
Commodities took it on the chin last month. Crude oil saw its steepest monthly loss since October 2008. Both copper and aluminum touched their lowest levels in six years. And on July 19, gold experienced a mini flash crash, sending the gold price down to five-year lows.
Yet compared to many other asset classes, gold has held up well, even after factoring in its price decline.
Commodities are one of the most hated sectors of the market right now, with commodity prices crashing to a 13-year low in July.
But it appears we're nearing the point of maximum pessimism. Opportunity could be just around the corner.
Commodities have been in a downtrend since 2011. All commodities are priced in U.S. dollars, and a strong dollar has acted as a headwind.
But signs right now point to a possible bottom and reversal in commodities.
What happens in the resource sector is a great barometer for the world economy.
Looking at where commodities prices are headed can even help us forecast what state the world economy will be in over the coming months.
Uranium has been one of the worst performing commodities markets for years. Since 2011's Fukushima reactor leak, the price of uranium fell by more than half.
But we're now at a pivotal point in this sector. Demand is about to jump, uranium supply outlook is getting tighter, and Japan's nuclear needs are coming back.
Thanks to the drop in crude oil prices, some TV pundits are now talking about the end of the "new" oil age. With oil now trading in a band between $80 and $88 a barrel, there's a "new normal" for crude.
But lower oil prices never hit everyone the same. The little-known truth is that, in some cases, lower crude oil prices actually make some companies even more attractive.
Last week's stock market correction meant a 464-point plunge in the Dow Jones. We saw a continued sell-off in energy stocks and a slump in commodity prices, specifically oil.
One of the main drivers of commodity demand is PMI, or purchasing managers' index.
Several pundits attributed yesterday's spike in oil prices to the recognition that the fight against ISIS in Iraq-Syria will be a long one. As usual, the 30-second TV wonders missed the boat.
Of course, the ongoing chaos in the Middle East is certainly a factor. To the extent that oil traders begin to calculate its impact into their risk models, there will be an effect.
With nuclear power bouncing back worldwide, and the number of global uranium mines declining, the signs are building that uranium prices are poised to head higher.
After stabilizing under $30 per pound, prices have begun to rebound, posting their largest gain in more than 30 months. Since Aug. 4, the cost of uranium has climbed by 13.91%.