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 Thursday, January 18th, about 6 a.m. Central Time. Overnight, the precious metals are higher after yesterday’s selloff. You have February gold up $7 at 2013, April gold up $7 at 2033. We’re going to want to watch the rollover as it should occur in about the next week here. So if you do get that draft up, you’re a little bit underwater on positions, consider lightening up and then trying rolling into the April contract. You have March silver 2270 up three cents, broke down below that 23 level yesterday, and then also kind of retested that previous low we saw last week. March copper unchanged 373, and then April Platinum up $11, 901.
So, Bond Traders are really kind of abandoning their bets that the Federal Reserve is going to make that first interest rate cut in March. It was a 90% chance back in December, early January we started about an 80% chance, then as economic data continues to be, and even some of the big misses haven’t really driven that probability back up. So we’re back closer to about a 50/50 chance that they do cut rates, and I don’t like that probability there.
Markets are really rethinking things after you saw that hotter than expected retail sales. We discussed that yesterday in the video that we thought that that was going to happen, and then also one of the fed speakers was a little bit more hawkish. Now today, we’re going to have Atlanta Fed President Bostic, he’s an FOMC voter, he speaks, so his comments are much more important than the other ones that are coming out that could potentially be voters at some later time. He on January 8th, he said inflation must be firmly and surely getting back to 2% before we cut. It would be a bad outcome if we started to ease inflation and started to rise up and up and down like a seesaw. So, a little bit hard to follow on it, but the point is on him is that he’s a hawk, and he’s against cutting too early. So we got to see what he says, and if he gives any kind of clue like he’s changing.
Now after he talks, you’re going to have housing starts, building permits, Philly Fed, which actually is estimated to come in a little bit hotter than expected. So you might see a small bump up in Industrial Metals, things like Platinum, Palladium, silver, copper, those all might get a little bit of a move up with that type of action here. So it’s important to watch the two-year treasury note, it’s the most sensitive as far as Fed speaking and whether or not the FED is going to cut rates. We’ve seen it rise about 18 basis points just recently off its lows, trading right about 4.26, down 3/10 of a basis point. And I really think that that little bit of a selloff we saw in it and it’s kind of bump up your scene in Gold is really that Middle East tensions, they’re kind of ratcheting up another level. The US launched another series of air strikes against Yemen’s Houthi Rebels overnight, they shot about 14 missiles. So it’s still continuing at the same pace, but hours later, this is where things get a little bit interesting. Pakistan and Iran, those guys are lobbing missiles at each other, and they’re lobbing missiles at each other within each other’s borders, targeting different Rebel groups, you know, pointing the finger at this and that. Pakistan’s prime minister, whatever they have over there, he’s cutting his trip short to Davos to get back, so it must have some series of potential to escalate. We saw Brent crude go back over 78, and there’s really a lot of questions about the supply chains could be coming back off again. So I think you got a little bit of his geopolitical bit going on at the moment here.
Now something to note on gold, I was reviewing the commitment of Traders report, and it’s really showing those speculative net Longs and fund net Longs are really at some high levels here. So we need something to happen, some kind of catalyst to drive people back into the ETFs, and I think that part of yesterday’s selloff was those funds, those people taking down those expectations. So we just need some weaker economic data, the FED to change its stance a touch, and maybe some geopolitical escalation, and I think gold Futures kind of recapture that bullish momentum because it did go back to a neutral Trend with that breakdown yesterday, broke below the 50, broke below the 200-day moving average, broke below the trend reversal point. So really, we got to see another move back over like 2070 in order to recapture the bullish Trend.
You go to the silver market, kind of a lightyear away, and it’s been in bearish trend for a while, even with the couple Spike UPS we had, it was never able to capture a bullish Trend. So you need to see that above 2439 to get the bullish Trend going, and you got a whole number of resistance points, the 50-day moving average 2380, the 200-day moving average like 2439. So just a lot to happen in order to get those markets going.
You got any questions, give me a call. Futures options trading, we trade the crypto currency also, the Futures contracts, a lot of action going on in the grains, a lot of action going on in other markets too as well. So you don’t just have to be concentrated in Precious metals, you can look at other things out there. I think there’s a good opportunity to play the downside on the US equities if they are going to correct. So you got any questions, give me a call 312-8581 303. Remember, Futures option trading does involve risk loss, may not be suitable to all investors. Good luck, good Trading.”
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