What to watch! The Metals Minute w/ Phil Streible
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Good morning. It’s Wednesday, October 4th, about 6 a.m. Central Time. Overnight, the precious metals continue to weaken after yesterday’s extension downward. You got gold down $4.18 37. That’s eight straight days of selling off in the gold market. Silver down $0.11, 2126. Copper down one at 360. Platinum is down five at 875. And Palladium is reaching a five year low.
As of this recording, it just dipped to about 1165, down about $25 on the session. So how much selling is left? You know, yesterday we saw periods of silver trading in positive territory despite material weakness in other markets like bonds and stocks. So it seems that a rotation is going through where they hit many of the most interest rate sensitive commodities, starting with the two year note, two year yield, selling off those yields, pushing back up, followed by the five, the ten, the 30.
Then you start getting into other interest rate sensitive areas like the gold market, all taking its weakness. Now, it seems like traders are trying to raise cash and are liquidating some of their best performing commodities, things like crude oil, things like cocoa and sugar, which have all been. 45 degree angles through much of the second half of the year.
Now, some things you want to remember is that markets do crash from oversold territory. So you don’t want to be a hero and step in there, you know, going all in on things. I see too many self-directed traders doing that. You know, the sell off has really gathered some steam and those crashes have occurred, especially like when you look at the Dow Jones having one of the worst days yesterday since March.
Now, we do have 30 year treasuries hitting 5%. That’s the highest level since 2007. And the 30 year fixed mortgage is approaching 8%. So looking at some things here that we’re going to watch today, labor remains in focus, as it always does the first week of each month. You’ve got U.S. factory orders coming out later today. Follow the ADP employment data.
ADP is very volatile. Could give you some big, big misses on the number, big gains. And then we see a completely different number once the unemployment number or the payroll number comes out on Friday. So expect volatility to be here and expect one employment data not necessarily reflect or create a trend of what we’re going to see here throughout the remainder of the week.
Now, the current levels we’re watching in the metals, obviously stochastic or oversold, the market remains firmly in negative territory and the current trend on the gold market as well as is silver, are both bearish. So the trend reversal point on gold 1936 that will dip down as the market accelerates lower. But if you look at the distance between the two, it’s about $100, which is some unprecedented levels.
So there’s much catching up that needs to be done. So we need to see consolidation in the gold market in order for that trend reversal point to come down. You’ll see the trend following traders. Once that reversal points hit, they’ll go more to a neutral stance and I expect them to remain in that neutral stance in some unless something really changes in this economic environment that causes people to really think that the Fed is done on the year.
So your 200 day moving average 1981 on the gold market, your resistance 1845 1852 and 1858. So anywhere in those 1850s probably going to be a lot of resistance unless we get some really big miss. On the ATP, your current levels of support. I’m still not liking that 17 handle, so 18, 24, 1810 and 1795. So there’s big pockets where the support are.
So if one gets breached we could see another extension down. That’s kind of what that means. Now if you look at the silver market, it’s still bearish and the chart pattern has some support level around those March lows. Sitting at 2061. So look at that. Remember what happened in March? We had that banking crisis, the FTC’s, that other bank, that couple and California, whichever ones those were.
That seems like history now, but that was where the support level remained because the Fed was raising rates aggressively. Then there was this period where they had to catch their breath and figure out what was going on in the banking sector, and that’s when the precious metals took off. So we’re just back at the level where we are at March.
So if you wanted to buy silver in March, this is now your time because we’re getting close to it again. Now your resistance levels on silver as it’s more volatile, 2167, 2201 and 2234 your support levels not like in that 19 handle similar to the gold market, so 2085, 2034 and then also 1988 big pockets. Again, we break these support levels.
You see that wash out. So the outside markets, they are weaker right now. You know, again, I remember that the Dow suffered its biggest loss since March. You know, so the equity markets here, they have crashed, They are oversold. They’re catching their breath right now. We’ll see what happens. You do have the US dollar down 28 ticks, 106 43 Crude oil is down a dollar 72 big move down.
Probably going to be adding some crude oil again here today as OPEC doesn’t look to make any kind of changes here. It is going to maintain cuts throughout the remainder of the year. And then you got the U.S. Treasury yields those are up two at 42. So you get any questions, give me a call. 3128587, three and three.
Remember, futures option trading does involve risk. Loss may not be suitable to investors. Good luck and good trading.
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