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 Monday, January 8th, about 6 a.m. Central Time. Overnight, the precious metals are weaker after Friday’s volatile session. You have February gold down $23 at 2026, March silver down 27 cents at 2305, March copper down 1 at 380, and April Platinum down 10 at 961. So really a lot of negative risk sentiment in the markets here, all the foreign currencies generally selling off, a little bit of safety going into the Japanese Yen and the dollar Index is positive on the day. That’s putting pressure across the board on a lot of the different markets. Every single sector, every single asset class, just a bit weaker here. Much of the fluctuations are repricing as to when the Federal Reserve is expected to make that first interest rate cut. If you go to the CME fed watch tool, all you got to do is Google CME fed watch tool, the landing page will come up, you scroll down, it will have a chart there. It will default to the front month of the fed’s first meeting, however, what you want to click on is the March one. I suggest bookmarking this in your bookmark page on your Internet Explorer, Chrome, whatever you’re using there. And then what you want to look at is it has the target rate probabilities for the March 20th, 2024 meeting. If you look at the current interest rate where we’re at, it’s five and a quar to 5 1 12%. There’s an expectation here of a 36% chance that they leave rates unchanged, a 60.9% chance that they make a 20 25 basis point interest rate cut, and a 2.9% chance that they make a 50, but we would need to see a complete wash out in data here.
Now getting into the precious metals, some other things that are happening here today, it is going to be another volatile session here, especially around 11:30. You’ve got fed president Bosk, he’s an FOMC voter, he’s going to speak at this Atlanta Rotary Club about the 2024 economic Outlook in the Q&A. On December 19th, Bosk said that inflation is going to come down relatively slow in the next 6 months, which means that there’s not going to be an urgency for us to start to pull off our resistance, our restrictive stance, meaning that he’s pretty much kind of holding in line here. He’s going to be one of these higher for longer type of fed speakers. So, but with the sell-off that we got in the markets here, I don’t know how much pressure he’s going to put additionally on the markets. Other than that, not a lot of economic data coming out. We do have CPI, that’s kind of the big highlight here of the week, and that’s going to come out on Thursday. So looking at some other things here, you get into like the gold market really pulling back here again. It’s quite sad because we were constructive on Friday given that stronger non-farm payroll number. Now I think the devil’s in the details on it. You did have wage growth, but I got to think to myself if I’m going to go work in the retail sector over the holiday weekend, you got to pay me more, you got to pay me at least minimum wage if not more. And I think that’s where some of the wage growth came in. And then I don’t buy the tactics of the current Administration. I think that what they were trying to do is boost those numbers up here, show that they got strong growth in the labor sector. So twice as many government job hiring as we’ve seen kind of recently. So we’re pulling back to support here on February gold between kind of that 2028 down to about 2013, those are the 50, the 200-day moving average. Trend reversal point right around the 20133 takes it from a bullish to a neutral stance. You get into the silver market, much weaker here, it’s kind of been in a cycle. $23 is a good level of support here, it’s dipped below it, it’s Pro below it a few times, it’s been kind of more of a snapback trade, you buy below 23 if you could sell above 23, 23 and a half, kind of this range-bound type of trading. That’s not specifically trading advice, you have to look at your own current particular risk parameters, portfolio position size, etc., and things like that.
Now looking at the outside markets, they are weaker like I said. You do have some news coming out about that Alaskan Airlines, that one I know if I was sitting in that aisle and the window blew out I’d be freaked out. You got Boeing grounding their Air Maxes, and it’s a 737, they’ve been grounding these here, there’s no telling how long they’re going to be grounded. You got the Dow Jones down about 153 points here, that’s one of the markets that I like onto the upside, the Russell, the Dow Jones. I think on the NASDAQ you got to kind of lighten up as you get near those highs there as they’re rotating out of attack and the small caps and some of these larger name here, these kind of safety type companies that are perceived. If you look at crude oil here, you do have that December contract back below $70, it is one of our top P five trade ideas. Looking at the long-term position on the December crude oil contract, look at an adding below that $70 level again, reassess your own kind of risk parameters, your own trading strategies, things like that. And then also on your precious metals are weaker, your grains are all weaker, some of your softs here are weaker, it’s all attributes to that dollar Index being firmer. So you got any questions, give me a call 312-8581 3. Remember, Futures option trading involves risk of loss, may not be suitable for all investors. Good luck, good trading.