Phil Streible with Blue Line Futures discusses Gold, Silver, Copper, Platinum, and other commodity topics.
AUTO-TRANSCRIBED:
Good morning. It’s Wednesday, January 3rd, about 6 a.m. Central Time. All right. The precious metals are further sliding after yesterday’s weaker session. Your February gold down $15 in 2058. March silver down $0.42, 2353. March Copper down four at 384. An April Platinum down 15 at 983. So kind of three themes I’m watching here. The Treasuries, they continue to slide. Once again, a short term Treasury yields are rising and the U.S. equities are weaker after stringing together nine straight weeks of upward movement. So they’re taking a bit of a breather here. The U.S. dollar, on the other hand, up about 2% here year to date, really bouncing off that lower 100 level, kind of extending its gains upward. So we’re seeing further weakening across the board in all of the foreign currencies. Now, this spills over to the precious metals with that inverse relationship. And really, if you look across the board and most of the commodity markets, there’s really no place to hide at the moment. Even the best commodities are under pressure here today. Now, we are going to have a few things coming out. We do have at 7:30 a.m. Central, you have the Richmond Fed President Barkin. He is an FOMC, a non voter. But he’s going to talk about the economic outlook at the rally, Chamber of Commerce and he said at one point this was December 19th. He said that if inflation comes down nicely, they would respond appropriately, basically giving that dovish tone here, really talking about, hey, if they get the falling inflation, they’ll probably make the interest rate cuts. Now, I think that what a lot of the traders are doing is they’re coming out and they’re reevaluating the number of interest rate cuts. There were six that were priced in coming into this nine week rally in equities. And now I believe those numbers are starting to trim down a bit. We will get some further data out that will reaffirm this. So there’s going to be a bit of a volatile session. You could see a short covering rally in a lot of different markets for those new shorts to put on, especially with the JOLTS job openings number coming out. They’re expecting about 8.85 million jobs here as the openings that is coming down from about 8.73 million. And then later on in the session in the afternoon, you’re going to get the minutes from the December 12th third FOMC meeting. And what they had done in the previous meeting is they really delivered this dovish message as the November inflation reports had come down. They started to revise back some of those interest rate expectations. And that was where we got this really risk on rally from those last FOMC meeting. So we want to keep an eye on all that. Now, if you look at the precious metals here, since about they had 2100, that’s going to be a resistance point and the February gold contract. And we’re coming back down the 50 day and the 200 day are kind of moving parallel well to each other rather than what you want to see is an acceleration higher on that gold and cross first key level support 2027. Your second level is going to be the 200 day moving average at 2013. It also corresponds with the trend reversal point. If we closed down there, gold will go back to a neutral trend. If you look at gold for the past few months, kind of cycling sideways, it does have a nice higher high, but it’s an empty wake up at the top. So we need to really breach into that 2100 level in order to get that party started. Silver, on the other hand, much weaker here. We saw China. It tried to rally and then it just folded over. So you got silver prices tracking with copper down about 1.89%. So it’s a big mover here. But I’d start to think that we’re getting to some levels of interest from a long term perspective. You look on the silver market, I believe really that $23, 22, 95 good pocket support in there. We’ve traveled in that range here from about last October, October 15th until this January 2nd trading session. We did have one poke up through $26 in that 2493. I’m telling you, that’s the key level of resistance there. We close above there. I really believe we could threaten some of those highs here and break out to higher highs. Again, that key level support, $23 anywhere below there I think is a long term value play. And then below that will be the 2195 of the 2095. I like those. Just follow those whole round numbers because of the fact I believe that there’s a lot of stop losses there. I really believe we could threaten some of those highs here and break out to higher highs. Again, that key level support, $23 anywhere below there I think is a long term value play. And then below that will be the 2195 of the 2095. I like those. Just follow those whole round numbers because of the fact I believe that there’s a lot of stop losses there. I think that they’ll get triggered on the way down and the people that are a bit more overweighted on silver work and they’re going to trim it off to the downside. If you have any questions on futures or options trading, give me a call. Love to talk to you at 312858733. Remember, futures and options trading does involve risk. Loss may not be suitable to all investors. Good luck and good trading.
– Phillip Streible, Chief Market Strategist