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 Monday, January 29th, about 6 a.m. Central Time. Over right, the precious metals are higher after Friday’s consolidating session. You have April gold up $11 at 2047, so February is not going to be the front month anymore. It’s probably the first notice date today, so all your systems and programs should have flipped over. The symbol is J, so April gold 2047 up 11 bucks. You’ve got March silver up 26 cents at 2313, and a key number to keep an eye on in silver is 23152, which was the high from January 25th. If we take that out, it’s really constructive on the charts.
Then you look at copper, slightly unchanged at 385, and then you have platinum down two and a half bucks at 918. Platinum had a really big recovery last week, got down to about 896. A lot of people came in, bought below that 900 level, and then sold out just above the 900 level. It seems to trade around those whole numbers for quite a while.
So looking at some things here today, we don’t have any major economic data releases scheduled for today. The key economic data released this week is the employment cost index on Wednesday, the ISM Manufacturing report on Thursday, and the employment report on Friday. Then you got the January FOMC meeting that’s on Wednesday. There will be a post-meeting statement at 1:00 central time, and Jerome Powell will give out a press conference at 1:30. There’s only a 2.1% chance that the Fed cuts rates this week, so that’s probably not going to happen. There’s a 48.6% chance that they do cut in March. Been watching that; there was even a 50 basis point popped up on the CME Fed Watch tool, so that’s something to watch as well.
We got a lot of data that came out recently that was quite supportive in both cases for them to cut rates and also leave rates unchanged. Inflation’s been coming down, and the other economic data has been stronger. The White House will really keep an eye on that consumer confidence report tomorrow. That’s one that they monitor because if the consumer is not losing confidence, then probably losing confidence in the current Administration and things like that.
Looking at the chart patterns here again on that silver market, I think silver looks really good. You have this movement up, then you have this sideways consolidation, and you have it poking out to the upside. That’s even with the dollar index pushing up. Dollar’s up 16 right now at 10339. I did see some recommendations to short the dollar index at 10385, stop at 10475, and they were going to press it if it broke below 10250. I think if we get below 10250, you’re going to see a risk-on environment across the board in many different commodities.
The economic data is mixed, but it also limits the upside. That December PCE data 2.9% year-over-year, the lowest since 2021. Back in 2022, we were at 4.9%, so significantly higher. Something that we are seeing in gold, if you take the non-commercial non-reportables, they are still kind of coming out of it. They got 195,000 about is the net position net long, took 15,000 off silver, 30,000, they took 10,000 off platinum’s 14,000, they took 2,000 off, and copper, they’ve still got a big short position going on copper, so minus 27,000, and they added more shorts on, probably on that rally that we saw last week.
Copper’s up 2% since that People’s Bank of China announced that 50 basis point reserve ratio cut. China’s really trying to stabilize their market, restore confidence. You do have a lot of mining downgrades when it comes to copper production, and then we should see a small supply shock in the coming months. It’s a really tight market. Like LME, I saw some targets, Goldman Sachs are saying like 10,000 on LME copper, it’s trading right around 8,500, so that would be a pretty decent move up, and copper futures could probably go up into the 390s or even test, you know, 398. I don’t know about getting over $4 quite yet.
Those are just some observations here on the market. Bitcoin, I do think that that had also forged the bottom on the market, and it’s continuing to push higher. I saw two big headlines out there that FTX, they had to hedge all of their cryptocurrencies while the liquidation process was going on, so they had significant short selling on the futures contracts to lock in those hedges, and those hedges are most likely complete. Also, financial advisors are still in the process of learning how to pitch this product to clients and incorporate it into their model. So until you get that, and they’re comfortable with it, then they’ll start allocating, then you’ll really see that Bitcoin ETF take off, and then you should see Bitcoin futures trend higher.
Again, those are just my thoughts. If you got any questions, give me a call. I’ll be on the Schwab Network at 7:15 a.m. Central Time, three days in a row. If you catch that, that’s great stuff. If you have any questions, give me a call at 312-858-7303. Remember, futures and option trading does involve risk of loss. SP up SE will all investors. Good luck, good trade.
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