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 Wednesday, December 20th, about 6 a.m. Central Time. Overnight, the precious metals are weaker after yesterday’s mixed session. You have February gold down six bucks at 2045, March silver down 5 cents at 2427, March copper up 1 at 391, and January Platinum down 5 at 960. So, the US and its allies are considering possible military strikes against Houthi Rebels. You want to really keep an eye on crude oil prices, which are up about 1.3% as of this recording, up 96 cents with the February contract trading just right around that 75 level. Why that’s important to watch crude well is because Fed officials are continuing to push back on interest rate cuts as soon as March unless they see weaker than expected core PCE data. Now, crude oil is a direct impact on inflation and could weigh in on some of these inflation indicators that are out there, pumping the brakes on those interest rate cuts. Now moving across the pond, we saw UK inflation data that continues to cool, and it also gives indications that their Central Bank should cut rates next year. Now if you look at the British pound, it’s down about a half a perc right now. Why that’s important is because of that inverse correlation with the dollar. Dollar’s up 20 ticks, and I believe that’s why you got your February gold down five bucks as of this recording. Now, what is interesting is that we are seeing a bit of chaos over in the Red Sea and these possible military attacks, but they must really be downplaying the threat of it because of the fact that we’re seeing no geopolitical escalation and prices in the gold market. So, you really want to keep an eye on gold as far as a couple of levels. I really think that 2062, that’s a key level. I think if we breach there, it’s going to be a technical breakout again on the charts, and it really starts to eye some of those higher levels, the 2075s, the 2100 again, over at that contract high at 2162. I think that’s a little bit far of a stretch given where we’re at right now. We haven’t seen any real interest rate cuts, there hasn’t been any panic by the Fed, there hasn’t been any panic in the markets whatsoever as far as US equity markets. Now looking at Silver, it’s the 2493, that’s your critical level of resistance. We need to, we’ve come up, we’ve consolidated sideways, we formed this kind of pennant pattern, and now we’re starting to look at hey, if we could get something going here, we should be able to break out to the upside. And I’m very disappointed in silver as of yesterday, despite only being up about 20-30 cents. We saw a massive move to the upside on just a downtick on LME and Shanghai stockpiles coming down quite a few days in a row over the past 20 days. So, some things I’m going to keep an eye on: weekly mortgage applications and also existing home sales. I want to see how this drop at interest rates from about 8%, I was sticker shocked when I called a mortgage broker to get one, and then now we’re at about the 6.2% level. So, 10-year treasury yields hovering right around 3.88, down three basis points, two years down five at 4.31. So again, oil prices up, dollar up right now, grains a little bit mixed. Some things I’m watching kind of outside: corn futures bumping along two-month lows, soybean futures kind of rolling back over. What was interesting is some of this turmoil over in Europe, over in the Middle East, and things like that, we did see wheat prices start to push higher, and then also you’re getting an extension upwards here, Bitcoin recapturing 43,000. So, want to keep an eye on all these things, gets into some holiday data or holiday type of movements here in the market. So, this is really your time to start brushing up on some things, look at some strategies, maybe you thought about incorporating options into your trading in the next year or starting to diversify into CTAs, manage funds, and things like that. Take a time to reflect back on your trading, some things you missed, we all missed things, and some things that you captured here and some things you would have wanted to be involved with. So, give me a call when you get a chance, 312-858-7303.
Phillip Streible, Chief Market Strategist