The labor market continues to show strength as ADP Nonfarm came in above estimates. Gold and Silver take another leg higher despite rising treasury yields, and ISM PMI provides some relief to equity markets.
Transcript:
Good afternoon traders. It’s Chris Chavez with blue line futures and it’s your daily, midday market minute. We’re continuing to see Treasury slide, but precious metals are pushing higher. Before we get to it. If you’re watching this video, like it, subscribe. If you’re on our website, there’s a link to direct you to YouTube and you can subscribe that way. We would love for you to follow us, we would love for you to help us build our following. We’re continuing to see longer duration treasuries, you know, the 30 year bond continued to slide yields are pushing higher. But despite that, precious metals are continuing to show just a ridiculous amount of strength, gold hitting a new all time high. Here again, today, the front month futures contract trading up to about $2,309 an ounce and silver now trying to break above $27, up nearly another dollar following the huge rally that we saw from yesterday’s session. So I think that, you know, there’s really something under the hood potentially brewing here. And really the reason why I say this is because coming into the day, we did get ADP non farm that came in above estimates, we got about 184,000 jobs versus 148. That was expected, the previous number also got revised higher. So that was one reason for yields, you know to be a little bit on the higher end of the range for bonds to be a bit lower. But we’ve just continued to see this breakdown. And even with some of this isn PMI data that did come in a little bit softer than estimates, you know that you’re still seeing a lot of the the weakness in bonds. And I think that that really shows that the demand specifically for longer duration treasuries and the risks that any investor has to take when holding, the longer duration bonds and and those yields, you’re just seeing a lot of selling, and there’s more demand more demand for the front end of the bond curve. So I think that, you know, moving forward, maybe you’re just seeing a little bit of a decoupling, and what I mean is that typically, conventional measures of, you know, gold and silver pushing higher, as you know, flight to safety bid, you know, risk assets, and gold and silver fall within that category typically respond to higher interest rates. And even though yields and interest rates are higher, you’re still continuing to see the metals push higher, too. So I’m calling this just a little bit of a decoupling from traditional or conventional fundamentals in the gold market. And usually when this happens when you see, you know, a decoupling of fundamentals, things that are typically key drivers, for any asset, there’s something under the hood brewing, and what could it be? I mean, I’m not really sure, as of right now, there are some geopolitical risks. You know, you’re continuing to see the escalation of tensions between China and Taiwan, you know, we did have that Taiwan earthquake now and starting to see China mobilize even more ships around the island. And you know, that could be one potential catalyst. Also, maybe we’re seeing China or Japan continue to offload some of our bonds, BRICS nations collectively coming together and buying more gold. I’m not sure, I think that all of the above could potentially be reasons why you’re seeing gold, push higher. Now silver is finally starting to play a little bit of catch up to the this is really interesting, and see how this shakes out. And we’re gonna want to keep an eye on some of the data as now, this is putting the metals in a great spot to shine. Because if data does come in weaker than expected, you start to see some cracks in the economy. Or you start to see labor market weakness, lower treasury yields, that should typically be supportive and aid, another leg higher in the precious metals. Now, again, on the back of the isn PMI data that we got today that was a little bit softer, we did see yields come lower, we saw a nice spike in equities following that with the Russell slightly outperforming are about neck and neck with the Russell and the Nasdaq here right now. Tomorrow, we’re gonna get some claims data, initial and continuing claims and trade balance data, so not really a lot. But ADP or Atlanta Fed GDP now rather going to be very important to pay attention to and we’ll finish out the week with more labor market data now looking at some of the support and resistance levels, three star overhead resistance for the s&p 50 to 60 and a half to 5263. Looking at the NASDAQ a three star overhead resistance level 18,004 14 to 18,004 to five, if we can break and close above either of these levels. It does look like you’re getting a little bit of a reversal. When you did see a lot of people you know a little bit worried about a potential correction. Maybe this is the bear trap. And looking at crude oil, three star support a level that I want us to maintain here as we’re holding out strongly above 85 bucks at 371 If we can manage to continue to find some support in this $83 range or so, I think crude can continue to make another leg higher potentially up to $90 barrel and looking at Silver I want to cover silver today major three star overhead resistance 2690 If we break and close above there the next level to pay attention to 2750. If you have any questions reach out to our trade desk we’re here for you. futures trading involves substantial risk of loss and is not suitable for all investors.