Phil Streible with Blue Line Futures discusses Gold, Silver, Copper, Platinum, and other commodity topics.
Phillip Streible, Chief Market Strategist
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Good morning, it’s Tuesday, January 16th, about 6 a.m. Central Time. Overnight, the precious metals are weaker after yesterday’s holiday. Volume-wise, you have February gold down $8 at 2043, March silver down 14 cents at 2319, March copper up three at 377, and April Platinum down 9 at 9912.
So this week, we’re going to have some key economic data releases. It’s going to be the retail sales report on Wednesday, followed by the Philly Fed index on Thursday. You’re going to have several speaking engagements from Fed officials this week also, including appearances by Governor Waller and Bowman, the vice-chair for supervision Barr, and President Williams, Bostic, and Daly.
Looking at the economic data coming out today, 7:30 a.m. Central, you have the Empire State Manufacturing Index for January. The consensus is down five, last reading was down 14.2. At 10:00 a.m., this is kind of what I’m going to be watching: Fed Governor Waller speaks. On November 28th, Waller said, ‘While I’m encouraged by the early signs of moderating economic activity in the fourth quarter, based on data in hand, inflation is still too high, and it’s too early to say whether we are slowing or seeing whether we will be sustained. But I am increasingly confident that policy is currently well-positioned to slow the economy and get inflation back down to 2%.’
So with that being said, he’s a bit of a hawk. He’s kind of on the sidelines here as far as has anything really been done. So we’re going to want to look and see if he’s staying firm with his current statement or is he going to ease up just a touch here. That might provide a small updraft here on the precious metals, which are lower in that overnight session.
Now, part of the reason why we’re lower is if you look at the US dollar Index right now, as of this recording, it’s up 75 points, so that comes out to about 75 basis points. It’s trading at 102.90. Chart patterns come up, consolidated breakout to the upside here, kind of this bull flag with a breakout. So it’s really that speculation that the Fed might hold back on cutting rates as early as March. We’ve already seen the ECB backpedaling on their discussion as far as cutting rates after being quite dovish at the start of the year and into the end of the last quarter in 2023.
So you put the CME watch tool up, you’ll see at that March meeting it’s about a 70% chance that they cut rates, 30% chance that they leave rates unchanged. So we’re still going to have to watch quite a bit of data, and you do have a lot of speakers out there today. You got Bloomberg, a lot of, if you want to tune into something here today to watch in Davos, it’s one of the fanciest things out there, but it’s all the CEOs, big tech guys, things like that. They go there, and they speak throughout the day here over the next couple of days. So it’s kind of a real interesting watch here, a lot of superstars come on there that I like to tune into.
Now, shifting gears to the copper market, which is your best-looking metal at the moment here, we’re seeing copper, grains, and energies all up. And the way that I tie that is I start looking, are things happening in China? Well, China’s considering this new kind of, the way I perceive it as like a quantitative easing plan. It’s called the special Sovereign Bond plan, and it’s really trying to buy or, sorry, boost that economy. Remember, China is the world’s second-largest economy.
So getting back here into the markets, you look at the gold market, nice move up on Thursday, same thing with silver, up a dollar. And in this current environment, there’s not really a lot out there to be really driving things like silver up a dollar. So from a perspective of risk management, if you were overweighted, good spot to trim a little bit off here, wait for it to come back below that 23 level, and then you look at, you know, where we see some value as far as adding additional exposure.
On the gold market, that shot up to about 2065 or so, another nice level here, kind of that breakout, but no real follow-through here today. Remember, that gold market, it has been in a bullish trend here for quite a while since about the end of December, but it’s kind of cycled back down to, you know, the 50 and the 200-day moving average. So a lot of work to be done on some of these particular markets.
We do like the $3 trading range in the crude oil market that’s been doing quite well for people that are a little bit more tactical on their ins and outs here, as the markets just don’t have that punch for a continuous flow, to turn into a trending market at the moment.
But you got any questions here, equities under pressure, we’re going to be eyeballing some of those, and some of those grain markets really got clobbered on that USDA report, so we could see a small recovery there. You got any questions, give me a call, love to talk to you, 312-858-1303. Remember, futures and options trading does involve risk of loss and may not be suitable for all investors. Good luck and good trading