Phil Streible with Blue Line Futures discusses Gold, Silver, Copper, Platinum, and other commodity topics.
Phillip Streible, Chief Market Strategist
AUTO-TRANSCRIBED
Good morning, it’s Tuesday, December 18th, about 6 a.m. Central Time. Overnight, the precious metals are mixed after yesterday’s flat session. You have February gold unchanged at $240, March silver up 12 cents at 2423, March copper up 3 at 388, and January platinum down 8 at 946. Just looking at the TV behind me, you can see rocket fire that’s taken off from the Houthi military media. I’m really disappointed because we saw crude oil prices up about 3% yesterday and no real follow-through. As the day progressed, prices slid with this escalation of Middle East tensions. Shouldn’t gold futures be a lot higher? Shouldn’t we at least be breaking out through some of these recent resistance points like $2,50, $262? I would just think that logically those dots would connect. Now, something else is going on. We did see central banks, they added 32 tons to this is according to the IMF over the last month. So, you’re seeing central bank purchases, you’re seeing an escalation in the Middle East. I mean, really, what gives?
Yesterday and last night, we saw the Bank of Japan, they decided to keep their negative interest rate policy intact. They’ve been this way since 2016. It’s really been disappointing and it’s been lingering and going on that they’ve had this type of policy. Now, why that’s important is that you have the Japanese Yen down about 1.3% right now. It is inversely correlated to the Dollar by 133%, just like the British pound and the euro currency. Euro currency makes up about 50%, pound makes up about 18%. So, when you compile some of these different central banks and their policies, it’s going to impact the dollar index, which will impact treasury yields, which will also ultimately weigh in on the gold market. So, we’ve got a little headwind right there.
Now, looking at gold, that’s at 2060. You got to get back above that, and then you could start to see it attack those upper boundaries. We have a potential for going for the all-time high. We are in a slight bit of holiday volume, so with that holiday volume, we do welcome lower prices to add to positions. We see value where the 200-day and the 50-day moving average, they’re beginning to cross. Today could be the day if we get a stronger session where we see that Golden Cross take effect. That’s where the 50 crosses over the 200-day moving average, and oftentimes those trends extend out for quite a long period of time. So, we do see value closer to the 200-day and also that 50-day moving average, which are right around that 1990 to about 2006 level.
Looking at the silver market, that one hugging the 200-day moving average right now. 50-day moving average is going to be your close-in support at 2372. I think longer-term support on the charts, where we see some value, $23.24. I like that level on the downside as a starting point if you don’t have any silver in your portfolio. The upside breakout is if it goes over 2492, expect a swift recovery back up to 26 on that chart pattern. Copper looking a little bit overbought in the low 390s, looking more like a sale back in the 370s. So, keep an eye on that. Keep an eye on crude oil, kind of disappointed like I said in the price action there. Would have thought that this would have been that breakout to the upside, we could have got something going a little bit more aggressively back to the upside.
The grain markets are all mixed here today. US equities continue to march on. They’re going to the beat of their own drum, and it could be a sustained rally in US equities well into the first quarter. So, we’ll see what happens here. If you have any questions, give me a call at 312-858-7303. Remember, futures and option trading does involve risk of loss and may not be suitable for all investors. Good luck, good trading.
Please note that this is a financial analysis and involves risks. It’s important to do thorough research or consult with a financial advisor before making any investment decisions.
Phillip Streible, Chief Market Strategist