Weekly Update (Week of 5/19/2025)

  

Weekly Update: May 19th, 2025

Trading Portfolio: (It is a link to Google Sheets)

Hey everyone. Some good bits of information this week, especially around gold, silver, and some geopolitical tensions around the oil markets. Put on a gold trade so far with some potential opportunities lining up in oil. 

Nothing in this blog, except graph images, has been generated by AI - all thoughts and analyses are my own (not financial advice).

General Major News/Economic Developments

• US-Iran in talks around nuclear agreement but nothing has been confirmed yet
• Moody's recent reports of downgrading the US from AAA to AA

Metals

Developments/News

Gold

Technically, gold did something I really like for the bullish story. We broke a key level, 3200, and saw a strong jerk reaction to the upside, followed by a small fall again which bottomed HIGHER than the previous low. Along with the macro story (read on), I like the long thesis here. I am initiating a 1 contract position in Gold futures at 3248.3, targeting 4 hour supply at 3385.5. Stop loss is below 3150 which would tell me I am wrong. 

News Updates:

I read two articles this weekend, both of which pointed to bullish sentiment as a result of gold's small fall from its 3450 / 3500 highs. The more interesting of the two details is that a Chinese gold producer, Chifeng Jilong, is on a global hunt for an acquisition that will effectively expand its business. Its most recent acquisitions in Ghana and Laos boosted its gold production from 2 tons to 15.2 tons last year. This tells me they hold a bullish sentiment on global gold demand. 

Separately, a global shift away from the US Dollar as a reserve currency, termed "de-dollarization", particularly in the BRICS+ (Saudi Arabia, UAE, Egypt, Iran, Ethiopia, and Argentina) group, has resulted in an increase in global reserve stores of gold instead. In 2016, gold made up ~9% of global currency reserves. By 2024? It has doubled to 22% (the highest since 1997).

I am basically saying I like the long term long.

Silver

Silver prices are still in the gray no man's land we marked off in last week's write-up (link), and it has cleanly bounced off the bottom of the range. I took some time to look at the longer time frame price action and saw that the best trade would have come in early April off of the ~28 level. I have had this green demand zone marked off on my charts for almost a year now (May 2024). I zoomed out a bit in the chart screenshot this week so we can see what formed it. 

News Updates:

The stance I spoke about in the last edition also still stands as investors view silver as a "performance gold". More volatile, but offers higher upside potential in bull cases. To further support my point as a use case in solar applications, here is a graph view of annual industry demand for silver since 2020:

Copper

Same as last week: The breakout over $5, if we ever get it, will be ripping.

News Updates:

Freeport McMoRan (FCX in the equities market) is the leading producer of copper in the USA. What has become clear about the current administration is that they want to support and protect domestic raw material production. As discussed previously, copper is fundamental in the modern age across energy, data centers, hardware, and EVs. FCX expects to sell 4 billion pounds of copper in 2025, with 35% of that coming from the USA. They've also put in a new initiative to recycle and recover copper from existing stockpiles, driving down costs and improving production without expanding mining. Just some interesting developments to note while we wait for a clear trade. 

Agriculture

Developments/News

Coffee

Still sitting at the support level we identified last week. Risk reward improves for the bull case but still no significant tailwind or headwind convincing me either way. Will continue to keep an eye and just learn more about the commodity.

News Updates:

A couple interesting things in the news to note, mainly around the deteriorating quality of Brazilian port infrastructure. Ports are currently operating at maximum capacity, with outdated equipment, underinvestment, and poor maintenance. Substantially, in March 2025, Brazil failed to ship 637K bags of coffee. A loss of $1.5m+ in export revenue.

A bit of cool tech in the space as well: a fully automated coffee shop in Wisconsin announced expansion plans after the success of its first location (Octane Coffee). 

Wheat

 

We retested previous support and so far it has proven to be resistance. Wheat is at prices it hasn't been near since mid 2020 and earlier. We should continue to sell off here, but barring any macro headwinds, this is purely speculative from a technical standpoint.

News Updates:

Traders have been and are continuing to add to be positioned for the short move. This week, net short positions in Chicago wheat reached 126K contracts, a 13K contract increase from previously. This is the biggest in nearly two years. Kansas City wheat positions were added to in the same manner. 

Energy

Developments/News

Crude Oil (WTI)

Crude is proving that it wants to remain below the 65 key level. The best catalyst for our short setup we discussed last week (short around here and stops around 70, targeting the 55 lows) would be a US-Iran deal, increasing oil supply and hence driving down prices. But recent developments are keeping me on the sidelines. Read more ahead.

News Updates:

On May 15th, President Trump indicated that the US and Iran were reaching a nuclear agreement, leading to an immediate and sharp downturn in oil prices (-2%) with expectations of a lifted sanction. Following that, on May 16th, Iran's PM cast doubts over the nuclear talks, adding uncertainty and resulting in a rebound in oil prices. Oil, as always, remains sensitive to geopolitical developments and supply concerns. Will continue staying tuned in on this deal. 

Crude Oil (Brent)

From a technical standpoint, this looks very similar to the setup under key support for WTI oil.

News Updates:

Since the macro story remains mostly the same as the story for WTI, I'll take this opportunity to discuss the difference between WTI and Brent crude oil, and in doing so, brush up on it myself. 

WTI and Brent are the world's two main benchmarks for oil pricing. They differ mostly in geography, composition, and relevance globally. Brent is sourced from the North Sea, while WTI is sourced in the US (largely Texas). Brent is a light and sweet crude oil (this means it is easy to refine). WTI is slightly lighter and sweeter, hence why the future contract is referred to as Light Sweet Crude Oil. US oil is benchmarked to WTI, while about 60% of internationally traded crude is priced off Brent. Brent usually trades at a premium (more expensive) than WTI crude by an average spread of $2-$4 per barrel, but this spread fluctuates with a number of macro factors, including infrastructure, supply, demand, and geopolitical risks. To sum up, WTI is a US-centric crude oil, while Brent is a more global form with a bit more geopolitical exposure. 

Footnotes

Sources include Thinkorswim, Tradingview, Barchart, Wall Street Journal, Financial Times, Investing.com, and Metals Daily.