Commodity ETF Alert July 2013 Portfolio Update

| July 23, 2013

 

To Taper, Or Not To Taper?

One thing’s for certain…

Ben Bernanke’s tapering talks have sent commodities on a wild ride over the past few months.

One day the Fed Chairman says scaling back quantitative easing is a certainty, but the next he says incoming economic data will likely make his decision.  Not surprisingly, all this wishy-washy talk is pushing the US Dollar all over the map.

Take a look…

USD Chart

As you can see, it’s been quite a roller coaster ride for the Greenback.  And unfortunately, these gut churning ups and downs will likely continue as we head into the dog days of summer.

Here’s an update of our open positions…
 

Position Updates

. . . . ETFS Physical Palladium Shares (PALL) – HOLD

Palladium is continuing higher this month after bouncing off the $650 support zone I pointed out in the June update.  That means if you bought PALL under $66.00- like I also mentioned in the June update- you’re sitting on some solid profits right now.

What should you do?

No matter where your entry point is and regardless of the profit you’re sitting on, hold onto PALL.  We may see a brief round of selling pressure in coming days, but odds are palladium breaks to a new 2013 high within the next few months.

Keep holding PALL for higher prices…

. . . . US 12 Month Natural Gas (UNL) – HOLD

Natural gas is stuck.  The abundant commodity has spent the past month trading in the $3.55 to $3.75 range.  Temperatures haven’t been consistently hot enough in key US regions for cooling demand to really skyrocket like last summer.

Unless there’s a dramatic and persistent rise in temperatures through August, natural gas will likely weaken in the near future.  As a result, let’s move UNL to a hold and wait for the price of natural gas to come down to the $3.25 area.

At that point, this commodity will be a great buy as we head into the Fall.

. . . . iPath DJ-UBS Platinum (PGM) – HOLD

Platinum is on a roll of its own lately…

The precious/industrial metal rose $150 an ounce over the past few weeks to test important resistance at $1,450 yesterday.

Can platinum keep running higher?

We may see a slight bout of selling pressure in coming days as profit takers enter the market.  But once that runs its course, we should see this metal break to the $1,500 area and higher.

As you know, fundamentals for palladium and platinum are getting more bullish by the day. South African labor issues, growing demand, and high mining costs are making a future supply shortage a virtual certainty.

Keep holding PGM for higher prices…

. . . . iPath DJ-UBS Copper (JJC) – HOLD

Copper is holding firm above $3 a pound.  In fact, copper closed at $3.17 yesterday- up nicely from our entry point a few weeks ago.  If the red metal can break and close above the $3.20 resistance area on heavy volume, we should see it continue higher to test the $3.40 area.

Let me show you what I mean…

Copper Chart

Given the current downtrend in London Metal Exchange 30-day copper inventory levels, there’s a very good chance of a solid price upturn in coming weeks.

JJC is now above our maximum buy-up-to-price.  As a result, I’m moving it to a hold.

 

Category: Commodity Trading