2016 Commodity Outlook: More Pain For Hard Assets?

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Commodity Trading Research
2016 Commodity Outlook More Pain For Hard Assets?
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• Hi, My name is Justin and Im with Commodity
  Trading Research, today were reviewing our
  recently published article

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• 2016 Commodity Outlook More Pain For Hard Assets?

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• No doubt about it, it was one heck of a rough
  year in the commodity space. Energies, precious
  and industrial metals, grains, softs- each
  complex has assets that are trading at or near
  multi-year lows.

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• One look at the CRB indexsums up the extent of
  the downturn

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• This closely watched index, which represents an
  equally weighted basket of the worlds 19 most
  important commodities, is down nearly 30
  year-over-year.

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• And when 2015 finally draws to a close in a few
  weeks, its unlikely performance improves much,
  if at all.
• Fact is, commodities have been one the worst
  asset classes to be invested in for quite some
  time.

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• With the exception of a few fundamentally strong
  commodities like cocoa and cattle, the space has
  been demolished the past year.

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• Is there any hope for commodities in 2016?
  Depends on who you ask Some see brighter days
  ahead, while others are just as gloomy as ever.

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• Heres my take

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• I believe there are some big profit opportunities
  coming up in select assets. However, next year
  must be carefully navigated according to each
  commoditys supply/demand balance.

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• In other words, a fewdeeply oversold commodities
  may see a sharp recovery, while others will
  likely remain mired in the muck.

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• Which assets are best poised for an upturn?

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• The energy markets holds some of the strongest
  upside potential. As you may know, oil and
  natural gas prices have been decimated this year.
  

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• Thanks to the US oil boom and the abundant
  supplies it brought forth, both commodities are
  trading at half the price they were last year at
  this time.
• But heres the deal

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• Low prices are in process of curing low prices.
  Judging by the huge downturn in the Baker Hughes
  rig count, its clear US crude exploration is
  hitting the skids.

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• That means the ongoing US oil production slowdown
  will likely start accelerating in 2016. Of
  course, the quicker production declines the
  faster the oil market will come back into balance.

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• And when it does, West Texas Intermediate will
  likely rally back over 60 a barrel.
• What about natural gas?

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• Since a large portion on US natural gas
  production goes hand in hand with crude
  exploration, I expect the commodity will start
  seeing a production slowdown as well.

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• And with natural gas usage expanding, its hard
  to see how the commodity stays at these ultra-low
  prices under 2.50 mmBtu.

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• For more information on natural gas, and ways to
  potentially profit from a rebound in the
  commodity, check out my newly released free
  report.

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• Unfortunately, my outlook on the metals space
  isnt nearly as optimistic

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• With the US Federal Reserve bound and determined
  to raise interest rates this year, investor
  demand for gold and silver has taken quite a hit.
  

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• Anyone watching the sharp downturn in these
  metals the past two weeks knows exactly what Im
  talking about.
• Heres the deal With inflation still nowhere to
  be found, its likely gold and silver pricesslide
  even lower next year.

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• In fact, I wouldnt be surprised to see gold drop
  to 1,000 an ounce in the next 12 months. Believe
  it or not, this gold producer is making plans for
  gold at 900.

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• But there is a caveat to that gloomy metals
  forecast

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• If theres a big slowdown in the global economy
  next year, which takes the US economy down with
  it, well likely see the Fed return to an
  extremely accommodative policy.

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• That may mean another round of quantitative
  easing (QE4), or even negative interest rates.

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• Such a risk on environment would likely bring
  capital pouring back into the metals space, as
  well many other commodity complexes.

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• Bottom line

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• Next years commodity outlook is highly dependent
  on the US central bank and its policies. Stay
  tuned to Commodity Trading Research as well
  continue our 2016 commodity outlook in next
  weeks article.

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