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 Friday, January 5th, about 6 a.m Central Time. Over at the precious metals, we see they are weaker after yesterday’s flat session. You have February gold down $4 at 2045, March silver unchanged at 2319, March copper down 2 at 382, and April Platinum down 5 at 960. The markets are really getting a bit of a reality check here. Even if you look at the equity markets, which have been quite resilient, we saw US Equity Futures up for about nine straight weeks. Now they’re in jeopardy of closing out that first loss here. The NASDAQ had closed lower for five straight sessions, and it’s the longest losing streak since October of 2022.
Looking at crude oil real quick here, a lot of questions on that. Natural gas and crude oil prices were up about $34 higher yesterday, then they had a big setback. It was really the inventory data on the product side that weighed in on the market. We saw gasoline inventories jump about 10 million barrels to 237 million barrels total. Natural gas, despite the rally and despite the drawdown in natural gas inventories about 14 billion cubic feet, we saw total storage up about 133% on the 5-year average. A lot of times, you want to use those five-year averages to figure out whether we’re in a tighter inventory situation or in a surplus. So, 13% above the 5-year average.
Now getting into things you guys like: gold, silver, copper, platinum. So we got some weakness going on right now, we got some strength going on in the dollar. The issue is these interest rate cut expectations are now starting to come down. I think that the hangover from that December FOMC meeting is really starting to kind of fade into the sunset, and some of the data coming out, especially across the pond and here with our jobs data, has really affirmed that. Euro Zone inflation data rebounded in December, it hit 2.9%. They were only expecting 2.4%. So that jump up takes the ECB’s interest rate cuts down to about a 40% chance that they’re going to cut rates here. It was a 70% chance yesterday, so that’s really fading. The US probability of an interest rate cut is also fading. What’s that do? Puts pressure on US equities, puts pressure on gold, and also silver. Silver did dip briefly below $23. I think that that’s a key level of kind of pocket support when you get down to this 23 down to about 20. I know it’s a wide range depending on the contract size you trade and also the size of your trading account. That will make a big impact on it on a percentage-wise because these are leverage products.
Now looking at some other things here, you got the dollar index 10243. There was a massive bet on 10-year treasury yields that looks like it was Zero DTE coming out here that should expire today. That bet that the 10-year treasury yield will hit 4.15%, it’s at 4.4% right now. So that would be a massive selloff in treasuries. You would probably see US equities dive on that, and you’d also see gold futures dive significantly as well, perhaps down to some of these key levels of support: 2028, 2013. You got to get back above 20175, 2100 in order to reestablish those upward trends.
Now the data that you got to watch today, this is 7:30 central. They’re expecting this is the non-farm payroll report. The consensus is 170,000. The last report was $19,000. I looked at some of these, all these analysts and all these banks out there, they’re higher than what the consensus is. You got to take like places like Bank of America 175, Goldman Sachs 190, and then also, you know, you look at private, they think had grown, they also think that the unemployment rate had ticked down at 3.7%. These are all things that are going to really firm those treasury yields. So kind of brace yourself here for some volatility coming into that 7:30 time zone.
If you got any questions, you know, give me a call 312-858-7303. Remember, futures option trading does involve risk of loss and may not be suitable for all investors. Good luck and good trading.