Exploring the fluctuating trends in gold and platinum, alongside potential investment opportunities in silver, copper, and Bitcoin amid global economic uncertainties and Fed policy impacts.
Phillip Streible, Chief Market Strategist
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Good morning, it’s Tuesday, February 6, about 6 a.m. Central Time. Overnight, the precious metals are flat after yesterday’s weaker session. You have April gold unchanged at 2043, March silver down 4 cents at 2259, March copper unchanged at 377, and April Platinum down 1 at 902. So, Platinum has had a bit of a swing back and forth, dipping below that 900 level, coming back up into the low 900s, trying to breach back over 910 before having a setback. Some of you did trade that action in the overnight market. I do see now, looking at some other markets here around the globe, we do have the S&P 500; it’s flat. It’s really focused on rates after P reaffirmed that a March rate cut is unlikely. Now, going across the pond here, looking at China, we did see their stock surge about 3% as Chinese officials continue to make measures to backstop that economy. I believe that’s why you’re seeing copper futures kind of halt or decline, you’re seeing crude oil futures bouncing back up just a touch, and also soybean futures recapturing that $12 handle on the March basis. Now, looking back at gold, gold does trade near a one-week low, the dollar index at about two and a half month highs. I did see a lot of people come in, they’re trying to short that dollar index 104 and a half. We’ll see what happens right there. Dollar index does feel a bit stretched to the upside, and I did see some research reports out there from several different large banking institutions indicating about the same thing. Looking at gold, still ETF selling continuing for about 12 straight days. And if you flip to the silver market, on January 22nd, the 23rd, and the 24th is when China announced that they were cutting that reserve ratio about 50 basis points, and that’s when you saw a big ETF inflow in the silver market. So, with it retesting those levels, does that person double up? We’ll see what happens here. Looking on the economic front, we got no economic data here scheduled today. We got a lot of fed speakers, though. The most important one is going to be 11 a.m. central time; it’s Cleveland Fed president Meer, it’s an FOMC voter. They’re going to speak, and on January 11th, President Master said that March is probably too early in my estimation for a rate cut because I think that we need some more evidence here. They thought that the December CPI reading just shows that there’s too much work to do, and that they need to take more of a restrictive policy. So, you’re going to have some hawkish comments most likely all around. Then, if you go to noon and also 1 pm, you’re going to have Minneapolis Fed President Kashkari, he’s a non-voting member. He’ll have a Q&A, and then also Boston Fed President Collins, another non-voter, is going to speak. And of course, you know, they’re saying that there’s just unevenness in the labor market here. They’re seeing too much strength, too many people wanting that dovish pivot here as far as an interest rate cut. So, I don’t think they’re going to get it. The only one that is speaking that will be dovish is going to be in the evening, about 6:00 pm Central. You’ll have Fed President Harker, and they argue that it’s important that they got to move interest rates down. So, it’s the Philadelphia president and the San Francisco president, those are probably your two biggest doves, but again, Philadelphia being a nonvoting member here. So, looking at silver, people were asking me about the support level, and I really think it’s pocket support getting from about the 2230 down to about the $22 level. I expect to see a lot of buying come in if we do breach below that 22 mark. Copper futures do remain still bullish on the trend after that breakout, that was the January 31st breakout which failed, and the February 1st open which sold off, which should have been your red flag that it’s a false breakout. So, it’s just holding on right now, about 376.95, kind of a critical level of support. Getting to the gold market, neutral trend, you got to get above 2073 on the upside really in order for a breakout and then to continue to go from there. And then on the downside, it’s the 200-day moving average, about like 2032 on down to about 2027, your critical level of support. Platinum again, you could look at a chart, back it up here, basically, it sold off from 1050 down to about 890, and then it’s kind of bounced around there, had one or two thrusts up, ran into some moving average trouble at the 50-day moving average, and also that’s a 38% retracement from that 1050 down to about like the 880 level as well. So, we’ll continue to adjust some positions here. One market that still stands out, cocoa, over the 5,000 market. I’ve never seen that in my entire life. And then Bitcoin continues to add on a couple of bucks, $500 here, 43,9. So, we’ll see if that can get any more momentum to the upside here. Really, we need to see a breakout above that 44,500 level in order to really get things going. So, you got any questions, I’ll be on the Schwab Network this afternoon. Yesterday, I was on the Trader Summit, and I’ll shoot out those videos here today. You got any questions, give me a call, 312-858-7303. Remember, futures option trading does involve risk; loss may not be suitable for all investors. Good luck, good trading.