Phil Streible with Blue Line Futures discusses Gold, Silver, Copper, Platinum, and other commodity topics.
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Good morning. It’s Thursday, December 28, about 6 a.m. Central Time. Overnight, the precious metals are correcting after yesterday’s stronger session. Your February gold down $8 at 2084 March. Silver down $0.09 2454. March Copper down three at 392 and January. Platinum unchanged here at 1014. So what I believe is underway here and going on in several different markets out there is really some year end, some profit taking, some harvesting of losses or some squaring up off positions because you have to execute the trade today.
So it will settle tomorrow and then you don’t have to worry about it settling into the new year, which could trigger, you know, different year end results and things like that. So people are really going to want to square up positions, focus on taking tomorrow off as it is half day, and then they’ll go into the new year with a fresh start.
Now, looking at the year to date performance on a couple of the metals here. Gold up seven and a half percent, copper unchanged. Silver down 3% and platinum down 10%. Platinum has had an incredible recovery off its lows, about 115, 20 bucks from from here, from those lows that we saw in the November sell off. And then also, if you look at the Palladium market, that’s been really the one that’s been under the most pressure, although that’s had also an incredible recovery off of those November lows as well.
Now, looking out into January and looking the way things stand, I was reading this report and it was covering seasonality. And remember that just because when you look at seasonality that seasons tend to change. You look at even Chicago, I was just there, it was 59 degrees. It was warmer there than in Florida. So seasonally that was an outlier on there.
So just because Suleman’s word for ten, 15 years doesn’t mean that, you know, it’s going to carry on on that type of performance. So definitely there are the same risks involved in, if not heightened risks involved. We don’t want to have you leaving your your guard down just because you read that a seasonal is better or has worked out in the past.
So end of this video, there is a seasonal disclaimer. Be sure to read that if you act on any kind of seasonality. So looking at again on the seasons in the gold market, well, that’s one thing that I did read here on the airplane yesterday. Back to Florida, there was a study put out by the World Gold Council, highly respected.
I definitely read a lot of their data. I get their weekend wrap up and I love reading it. So since 1971, gold has had this is in January. This is looking at the past. Does not reflect the future has had an average return, a positive return in January of 1.79%. That’s since 1971. Go to closer time. Since 2000, it’s been up 70% of the time right around those type of results.
And then you go back to the 1971 has been 60% of the time that it has positive results. So 70% of the time, positive results since 2000. Now, something to note is that in 2021, in 2022, if you bought gold on January 1st, you sold on 31st you lost money. So it was down on board the month. So we did have a bit of a different dynamic over the last two years when the Fed was raising rates.
We’re coming out of COVID. We were at rock bottom on rates and we should have risen on interest rates. The economy should have reopened. So there were a lot of things that would have put pressure on the gold market and that type of rotation would have taken place. Now, I think that the dynamics are slightly in favor of gold, not saying that it’s going to be a winner, Don, saying anything like that.
I’m just saying that we are coming into a year where the Fed is projected to cut rates about three times. The economy is expected to soften. So some of these are the opposite of over expecting in 2022. Now, they do note that portfolio rebalancing is something that takes place right in early January, especially the first week of January, for some larger funds that only trade quarterly, semiannually and things like that.
So you’re going to have the rebalance thing where they might go into the gold market. You are seeing weakening real yields. And then the third thing is that I believe that China is beginning to restock in Asia and stuff like that. But remember, January of 2021, 2022, gold negative this year does not mean that it’s going to be positive.
I’m just telling you flat out that these are the the base is behind it. So getting the seasonals out of the way, you look at the market here, kind of a flatter session. I expect it to be kind of choppy. You might see some at the end of the session, some some big moves here. Silver market still bearish trend hasn’t flipped back to neutral been bearish trend since that December 4th where it peaked.
That was that Sunday night explosion Gold had that too that’s where it hit the contract high. We got over 26 bucks on silver. It sold off got down to about $23. 20 to 95 was the low. And then we gapped up again. And then since then, we’ve really been completely sideways. So if silver can get over 2493, I think that’s the breakout point to the upside and we start to attack that 26 level.
We’ll see if early January brings that on the gold market yesterday, last night, very disappointed. We got to 2098 20. So that’s going to tell you that 21 level is going to be key resistance point. We got to close above that that I think we could start attacking some higher levels here. They are factoring in though, gold is pricing in three interest rate cuts.
So you need the Federal Reserve instead of doing 325 basis point cuts, you need them to come out, go, my God, the economy is weak. You know, we need to do an insurance cut where it’s about 50 basis points instead. So we’ll see if that happens. And then if you got any questions, give me a call. Crude oil down a dollar.
You got the dollar index down 14. Didn’t break below that level, but that’s kind of the key level of support. U.S. equities are mixed here. Ten year Treasury yields, we’ve got up two basis points, 3.81. So we’ll see what happens over there. And then, you know, agricultural markets are mixed. Bitcoin got to 43,000, almost 44,000, and then it pulled back and then you’re a Etherium.
It actually looks pretty good on these charts. You know, if you have a bias on a particular thing, like if you’re looking at something like silver and you’re like, okay, Silver’s got to go up, blah, blah, blah, whatever your beliefs are, just look at a chart of it. Forget that it’s even silver print up 25 different charts, had to have your significant other do it, Shuffle them all up and pull it out and go, okay, what’s this thing look like?
This looks really good. That’s an old chart. Pull out the next chart. This thing looks terrible. That happens to be the silver chart. So trade off of the technicals and then find the follow. Find the fundamentals later because the fundamentals will Trump will price him with the technicals and everything else. So I just think that looking at things with a clean slate is oftentimes the best way and some of the best trades that I’ve found here.
So couple standouts here. Natural gas sold off, kind of came up consolidating poking up. If you don’t me personally, I hate natural gas, but the chart pattern looks good. And the wheat market, you know, the wheat market’s got a nice little chart pattern, too. Starting to break out to the upside a little bit of back and fill in yesterday.
We’ll see if it breaks back out to that upside. That’s another nice looking chart pattern, in my opinion. So nothing to do with the fundamentals. Fundamentals could be a completely different story, but that’s just the way that I like to to approach it. That’s why I say with silver going up, consolidate could break out to the upside a little bit longer video.
I might not do one here tomorrow in some new office equipment in my desk is too small, so I might have to put a new top on it and and then we can get some more monitors going over here. So any questions? Give me a call. 312858733. Remember, futures option trading of all interest glass may not be suitable to investors.
Good luck. Good trading.
Phillip Streible, Chief Market Strategist