THE Breakdown Of 2015 Is Now A Fact

Tuesday, July 28, 2015
By Paul Martin

by Secular Investor
ZeroHedge.com
07/28/2015

The price of copper, being a leading indicator for the health of the global economy, has broken through a multi-decade trend channel. This is really bad news for the global economy, and for markets in particular. This setup carries a message you simply cannot ignore if you are a serious investor.

Part of the problem resides in China. As the next chart shows, the correlation between the price of copper and the Chinese Manufacturing Purchasing Managers Index (PMI) has been very high. In particular, the copper price has a track record of anticipating the direction of the PMI index. The latest PMI reading earlier this week came in at 48.2 this week, still below the critical 50 level. It indicates that purchasing managers believe economic contraction is prevailing at this point.

It is not only copper, but almost all commodities are tumbling right now. So here must be more going on than contraction in China.

The price of gold, apart from the fact that last Sunday’s crash was more than suspicious (given the low number of sellers, high number of contracts, in a overseas thin trading market), has broken through key support as well. What is more worrisome, however, is the trend of the gold miners. Traditionally, the miners are a leading indicator within the precious metals complex.

Calculations of our analyst team at SecularInvestor.com show that prices of various gold mining stocks are factoring in a scenario of $600 gold in the not too distant future.

Scary movie? It will probably become worse, as from a technical point of view there is still quite some downside in the leading commodities (copper, gold, crude oil).

The key question of course is what central bankers will do with this deflationary cabal.

The Rest…HERE

Leave a Reply

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter