While there are still plenty of reasons for remaining bullish on the intermediate- and long-term outlook for metals and other commodities, the strengthening U.S. dollar is providing a near-term headwind for metal prices.

The greenback’s latest strength has also performed the valuable service of helping to cool off what was becoming a seriously overheated market condition in several major industrial metals.



However, until the dollar weakens, I’m recommending that participants maintain a mostly defensive stance.

The ongoing war between Russia and Ukraine—and the consequent sanctions and production cuts—has forced producers across several areas of the metals sector to make desperate bids to secure much-needed supplies.

This dynamic is expected to keep metal prices elevated across the board in the coming weeks and months. As noted here previously, there are other fundamental factors behind the bull market in the major industrial metals, but this is diminished by the Russia factor.



In the portfolio, we just added a new position in a silver miner that is showing a surprising amount of relative strength given the current silver market backdrop, as well as a major player in the titanium dioxide market.

As discussed in the last report, heightened volatility relating to the war between Russia and Ukraine—or more specifically, the prospects of a ceasefire between the two—is the key driver for the broad metals market right now.

Yes, there are other fundamental factors behind the latest rallies in the major industrial metals, but everything else is dwarfed in comparison to the Russia factor. On that score, uranium is the latest metal to fall victim to sanctions against that country.



In the portfolio, we just added a new position in a dual steel and aluminum play that looks set to pop.

The iconic phrase above was uttered by James Cagney in the movie White Heat just before his character blew up in a spectacular explosion. The metaphor is a timely one for the broad metals market as prices across the board are skyrocketing to heights not seen in years, or even decades!

But streaking metals prices can quickly reverse based on a dramatic shift in the prevailing geopolitical narrative. For that reason, I recommend tightening up stop-losses and proceeding with caution rather than getting carried away with excessive optimism.



In the portfolio, we just added a new position in a dual steel and aluminum play that looks set to pop.

More Metals Join the Bull’s Parade
For the first time in recent memory, metals are looking good across most major categories. Base and precious metals are showing varying degrees of strength, while energy metals like uranium and lithium are trying to establish bottoms. Even gold is showing more sustained strength than we’ve seen in several months.

In the portfolio, we just added a new position in a blue-chip gold stock and have initiated an additional new buy in a platinum/palladium closed-end trust.

Weakening Dollar Boosts Base Metals
Industrial metals got another boost last week when the U.S. dollar index suddenly and swiftly reversed a prior rally. Gold barely budged, but a recent development in the stock market suggests the yellow metal could soon get another buying bid. In the white metals, silver slept but palladium is on the rise once again.

In the portfolio, we recently added a new position in our favorite commodity-tracking fund and have initiated four additional new buys in various industrial and precious metal plays.

Bubbly Conditions for Nickel
The metals needed for the electric vehicle (EV) battery market are on fire right now, as are other industrial metals like tin and aluminum. Other key metals, including copper and steel, are hanging tough as hopes for revived infrastructure demand in China increase. The main story right now is nickel, which appears to be in the early stages of a speculative bubble. In the portfolio, we just added a new position in our favorite gold-tracking fund.

Industrial metals, led by tin and aluminum, are strengthening as we head into the New Year. Copper is hanging tough, while gold can’t seem to find any traction. Battery metals and rare earth miners are still in good shape overall, while silver is in a position to rally (assuming its short interest position continues improving). These are just some of the topics we’ll discuss in the latest report.





In the portfolio, we’re adding a new position in our favorite tin-tracking fund.

Industrial metals, led by aluminum, are on the rise once again. Copper looks to extend a three-year winning streak. The battery metal and rare earth miners are still in good shape. And even laggards like gold and silver could finally “pop” in the New Year. These are just some of the topics we’ll discuss in the latest report.





In the portfolio, we recently took profits in our aluminum play and are adding a new position in a top copper producer.

Alternate Energy Metals Steal the Spotlight
The metals necessary for the worldwide clean energy agenda are significantly outperforming their industrial and precious metal counterparts. Specifically, lithium, nickel and cobalt are showing relative strength, while steel, iron ore and silver continue to lag. Meanwhile, continued strong demand in the magnet market is keeping prices for rare earths like neodymium and praseodymium buoyant. As a result of this strength, our rare earth stock holdings continue to perform well.

Rare Earths Lift Off
Driven by strong demand in the magnet market, prices for rare earths like neodymium and praseodymium have skyrocketed and achieved a position of relative strength among the metals in November. Lithium, meanwhile, is also still a strong performer along with nickel, thanks to growing electric vehicle (EV) battery demand and tight supplies. Rising “green technology” demand has further served to fuel the bull market in both metals.

Gold Shows Signs of Life
Gold prices perked up late last week in the wake of some bullish interest rate developments. While silver and other white metals didn’t confirm the strength, there are reasons for believing that the safety-related move into gold will persist. Lithium, meanwhile, remains the undisputed leader in the broad metals sector as electric vehicle (EV) battery demand continues to accelerate. Rising EV sales from some major auto companies have only served to fuel the lithium bull market.

You’ve often heard me say that gold’s biggest gains are normally made when investors are worried about either the stock market, the economy or the geopolitical outlook. Right now, all three of those outlooks are in serious question. Why, then, has gold failed to respond to the heightened fears?

Gold prices took a dive in late April, falling 6% after briefly reclaiming the $2,000 an ounce level earlier in the month. While disappointing, the yellow metal still finished the first four months of this year with a net gain of 6%.

Of technical significance, gold remains above its widely-watched 200-day moving average, which tells us that despite the recent weakness, the bulls still have control over the intermediate-term trend.

It’s not often that virtually all metals—precious and base—experience a synchronized boom, but thankfully for investors, this is one of those rare events. Due to the inherent cyclicality of the sector, however, we’re forced to pose the question: How long can the metals defy gravity before the inevitable mean reversion sets in?

For more than a year, gold remained stuck in a holding pattern while other metals roared higher in response to global manufacturing demand and supply shortages. All the while, the global economic and geopolitical situation was becoming increasingly tenuous, prompting us to repeatedly wonder when a flight to the safety of gold would transpire.

For more than a year, gold remained stuck in a holding pattern while other metals roared higher in response to global manufacturing demand and supply shortages. All the while, the global economic and geopolitical situation was becoming increasingly tenuous, prompting us to repeatedly wonder when a flight to the safety of gold would transpire.

For more than a year, gold remained stuck in a holding pattern while other metals roared higher in response to global manufacturing demand and supply shortages. All the while, the global economic and geopolitical situation was becoming increasingly tenuous, prompting us to repeatedly wonder when a flight to the safety of gold would transpire.

After being stuck in a lateral range for the past year, gold was finally able to overcome the psychological $1,900 an ounce barrier that has held back all previous rallies since early 2021.

The last few months have been a tale of two markets for the metals. Base metals like copper, tin and aluminum have outperformed, while steel and precious metals like gold, silver and platinum have underperformed.

It was fun while it lasted, but it didn’t last long… That statement certainly describes gold’s recent flight-to-safety rally (and subsequent sell-off). But it could also be considered a worthy refrain for gold’s three prior lift-off attempts since last August, each of which proved to be a false breakout.

Last year was a stellar one for commodities in general and for industrial metals in particular. Copper, steel, aluminum, nickel and lithium all had stellar gains. There were some declines along the way, but the overall trajectory for the majority of base and semi-precious metals was up.

It’s the worry that just won’t go away, and while it’s disconcerting to equity investors, gold is clearly benefiting from it.

For metal investors, it has been a classic tale of two markets. On the precious metals side of the market, disappointment still reigns as gold remains stuck in neutral and the white metals (led by palladium) are still in the dumps.

Broad market volatility spilled over into some of the precious and industrial metal markets this week, including copper. The red metal was unfortunately a victim of Wednesday’s Fed-related whipsaw, which knocked us out of our conservative trading position in our favorite copper-tracking ETF, the United States Copper Index Fund (CPER).

The broad U.S. equity market experienced another “volatility event” this week, which was blamed on Covid variant worries and concerns that the Fed might begin tapering sooner than expected.

As we alluded to in this week’s report, the major industrial metals are improving with copper showing the greatest relative strength. We have added some new positions to the portfolio in light of this strength, and here we’ll highlight the latest ones.

The broad industrial and precious metals market remains subject to the wild oscillations of daily news headlines. There are, however, some glimmers of life in beleaguered metals like copper and platinum.

Persistent strength in the dollar is putting downward pressure on most metals right now in varying degrees. Some, like tin and aluminum, are resisting the greenback’s strength. Others, like gold and silver, are taking it on the chin as a result.

Thursday was a tough day for gold as bullion prices dropped over 2%, stopping out our speculative position in our favorite gold tracking ETF.

We had a good run in steel and steel products manufacturer Nucor Corp. (NUE), America’s largest and most diverse steel maker. Unfortunately, however, that run has come to an end and I now recommend selling our remaining position in the stock.

Nickel futures are back to a 7-year high and recently hit $19,000 a ton in a resurgence from last month’s pullback. Nickel prices are being supported by strong battery-related demand from electric vehicle (EV) makers.

Since hitting a low in August, silver is trying to establish an intermediate-term low and could be on the cusp of another meaningful rally—especially if the market fears that inflation is truly becoming an entrenched reality (as opposed to a temporary phenomenon).

Gold broke decisively above the widely watched $1,800 level on Friday on a weaker dollar and rising geopolitical worries involving the situation in Afghanistan. As of late Friday, gold was headed for its best weekly close in almost two months.

Time to Take Some Profit in Nucor

While copper futures prices remain firm, copper ETFs have come under renewed selling pressure late this week, thanks in part to persistent strength in the U.S. dollar and in spite of widespread hopes of additional monetary easing measures in China.