Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

<p>After the clean-out following the last FOMC we seem to be settling into a situation of lower long end bond yields, and a stable to, now, bearish looking USD.</p>
<p>The combination of lower long end yields and a lower USD in the short term provides a decent backdrop for precious metals to do well. They are all showing signs of life again…</p>

After the clean-out following the last FOMC we seem to be settling into a situation of lower long end bond yields, and a stable to, now, bearish looking USD.
The combination of lower long end yields and a lower USD in the short term provides a decent backdrop for precious metals to do well. They are all showing signs of life again…

<p>The price of Silver has closed below the 200 day moving average for the first time since May 2020. This development draws some attention. While it is not a break in itself, any lower through $24.05 on a close basis would be meaningful bearish sign.</p><p>We also review the weekly Gold chart which continues to look concerning as we sustain below the 55 week moving average .</p><p>As Bonds remain stable and the USD looking increasingly bid across many pairs, it is perhaps no wonder that both Silver and Gold are under pressure.</p>

The price of Silver has closed below the 200 day moving average for the first time since May 2020. This development draws some attention. While it is not a break in itself, any lower through $24.05 on a close basis would be meaningful bearish sign.We also review the weekly Gold chart which continues to look concerning as we sustain below the 55 week moving average .As Bonds remain stable and the USD looking increasingly bid across many pairs, it is perhaps no wonder that both Silver and Gold are under pressure.

<p>'As the Sun Rises' is a weekly publication expected to be released at the start of every week with a view to highlight macro trends and important price action developments across all asset classes. It is designed to be global in nature with particular attention given to developments in Asian markets.</p>

'As the Sun Rises' is a weekly publication expected to be released at the start of every week with a view to highlight macro trends and important price action developments across all asset classes. It is designed to be global in nature with particular attention given to developments in Asian markets.

As the Sun Rises - Bonds, South Korea, Oil, India, USD

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Commodities

<ul>
<li>Last month our text-mined indicators highlighted a notable raw materials restocking underway for the second time since August; this theme did not slow down throughout December, ending the month at a new high</li>
<li>Though with very little discernible impact on commodities, our indicators saw Chinese macro sentiment peak earlier in December at +3x STDEV with some momentum lost on the margin since, driven by below-consensus Chinese retail sales and home price readings, continuing in recent days on lower-than-expected NBS and Caixin PMI releases</li>
<li>In the context of USD weakness, a wildly inflationary mindset in markets and a general restocking, commodity optimism has not wavered </li>
<li>Our commodity sentiment indicators saw broader momentum in December, with already-surging copper momentum joined by crude, aluminum, uranium and nickel; iron ore and steel may be coming off the boil, but markets remain extraordinarily tight</li>
<li>Gold sentiment appears to have fully stabilized after the post-election risk-on shock</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


Last month our text-mined indicators highlighted a notable raw materials restocking underway for the second time since August; this theme did not slow down throughout December, ending the month at a new high
Though with very little discernible impact on commodities, our indicators saw Chinese macro sentiment peak earlier in December at +3x STDEV with some momentum lost on the margin since, driven by below-consensus Chinese retail sales and home price readings, continuing in recent days on lower-than-expected NBS and Caixin PMI releases
In the context of USD weakness, a wildly inflationary mindset in markets and a general restocking, commodity optimism has not wavered 
Our commodity sentiment indicators saw broader momentum in December, with already-surging copper momentum joined by crude, aluminum, uranium and nickel; iron ore and steel may be coming off the boil, but markets remain extraordinarily tight
Gold sentiment appears to have fully stabilized after the post-election risk-on shock
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Indicators: Commodity Sentiment Review - Restocking On, But China Macro Momentum May Have Peaked

<ul>
<li>We examine a range of gold-related custom indicators to chart the thematic catalysts for gold's persistent weakness since August</li>
<li>Inflation hedging interest is back, having last spiked with gold in early August; but as our text-mining highlights, inflation hedging is now primarily associated with cryptocurrencies rather than precious metals </li>
<li> Gold saw a post-election false start which was abruptly halted by a barrage of vaccine news, and more recently hints of an orderly presidential transition; as a result of lingering post-election dissonance, our diffusion of positive vs. negative gold commentary does not point to imminent reversal from recent negative trends</li>
<li>Global financial media discussion of stimulus has dropped to a YTD low, which appears to be strongly correlated with gold's recent move, replaced by a spike in discussion of easing financial conditions</li>
<li>After a September-October hiatus, we see an upward slope in our text-mined weak-USD expressions indicator in recent weeks, though far less dramatic than the multi-STDEV spike seen over the summer</li>
<li>Mentions of tail risk hedging declined to a 14-month low, having peaked in early April</li>
<li>With gold/SPX T6M correlation running at a decade-high +87% in September, gold's traditional "uncorrelated" portfolio function has been called into question for good reason; similarly, positive gold/USD correlations in the past 3-4 months have not inspired confidence, but given the short interval this does not stand out as abnormally dysfunctional</li>
<li>Overall, we see gold-positive inflation hedge demand, persistent pressure on USD and easing financial conditions as currently more than offset by gold's recent dysfunctions, BTC's emergence as competing inflation hedge, lack of interest in tail risk hedging and falling stimulus expectations; we see short-term downside limited to ~1x STDEV or $1700-1725/oz based on the current data set, following significant unwind of speculative interest and ETF outflows</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


We examine a range of gold-related custom indicators to chart the thematic catalysts for gold's persistent weakness since August
Inflation hedging interest is back, having last spiked with gold in early August; but as our text-mining highlights, inflation hedging is now primarily associated with cryptocurrencies rather than precious metals 
 Gold saw a post-election false start which was abruptly halted by a barrage of vaccine news, and more recently hints of an orderly presidential transition; as a result of lingering post-election dissonance, our diffusion of positive vs. negative gold commentary does not point to imminent reversal from recent negative trends
Global financial media discussion of stimulus has dropped to a YTD low, which appears to be strongly correlated with gold's recent move, replaced by a spike in discussion of easing financial conditions
After a September-October hiatus, we see an upward slope in our text-mined weak-USD expressions indicator in recent weeks, though far less dramatic than the multi-STDEV spike seen over the summer
Mentions of tail risk hedging declined to a 14-month low, having peaked in early April
With gold/SPX T6M correlation running at a decade-high +87% in September, gold's traditional "uncorrelated" portfolio function has been called into question for good reason; similarly, positive gold/USD correlations in the past 3-4 months have not inspired confidence, but given the short interval this does not stand out as abnormally dysfunctional
Overall, we see gold-positive inflation hedge demand, persistent pressure on USD and easing financial conditions as currently more than offset by gold's recent dysfunctions, BTC's emergence as competing inflation hedge, lack of interest in tail risk hedging and falling stimulus expectations; we see short-term downside limited to ~1x STDEV or $1700-1725/oz based on the current data set, following significant unwind of speculative interest and ETF outflows
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot: Text-Mining the Thematics Behind Gold's Disappointing Fall

United States

Silver is the metallic element with the atomic number 47. Its symbol is Ag, from the Latin argentum, derived from the Greek ὰργὀς (literally "shiny" or "white"), and ultimately from a Proto-Indo-European language root reconstructed as *h₂erǵ-, "grey" or "shining". A soft, white, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. The metal is found in the Earth's crust in the pure, free elemental form ("native silver"), as an alloy with gold and other metals, and in minerals such as argentite and chlorargyrite. Most silver is produced as a byproduct of copper, gold, lead, and zinc refining.

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Silver (SILVER COMDTY)

Time for Precious Metals to Shine Again

The USD is beginning to come on the back foot again while long end yields refuse to rise. This combination sets the scene for precious metals to...

Shyam Devani

No Silver Lining, No Golden Egg

Silver and Gold are back under pressure with Bonds stable and the USD looking bid. Any lower on Silver will amount to a bearish break

Shyam Devani

As the Sun Rises - Bonds, South Korea, Oil, India, USD

Cross market & price action developments to note at the start of the week across global markets with particular focus on Asia - Currencies, Bonds,...

Shyam Devani

TMI Indicators: Commodity Sentiment Review - Restocking On, But China Macro Momentum May Have Peaked

TMI's commodity sentiment indicators saw improved breadth in December as restocking continues to drive reflation; but China macro momentum may have...

Elan Gore

TMI Snapshot: Text-Mining the Thematics Behind Gold's Disappointing Fall

We chart the thematic catalysts for gold's persistent weakness since August with a range of gold-related custom text-mined indicators, offering...

Elan Gore

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