Discover insider insights on your favorite Precious Metals, uncover overnight developments, and gain expert analysis on what to watch for every trading day.
Overnight, Precious Metals are higher after yesterday’s profit taking, which turned into stop-loss selling. The result was a 2.5% correction in Silver and a 1.3% in Gold.
Today, we start with a bounce, which gives us clearly definable levels as a backdrop to trail stops, risk management, and identifiable breakout levels.
For example, one could test the waters on Gold while managing the position below the July 5th low and waiting for a thrust above 2400 before adding. Once a breakout is achieved, one would adjust the risk management to accommodate the two positions.
Looking at today’s economic calendar
Federal Reserve Chairman Jerome Powell will kick off his Semiannual Monetary Policy Report to Congress by appearing before the Senate Committee on Banking at 9 a.m. central time. The testimony usually has two parts: first, he reads a prepared statement (a text version is made available on the Fed’s website at the start), and then the committee holds a question-and-answer session.
- Investors awaited clues from Powell on the Fed’s outlook for interest rates and inflation
Before major events like this, I always glance at the expectations for interest rate cuts.
CME Fed watch tool – July 4.7%, September 77.1%
At 8:30 pm central time, the evening session, you will want to glance at Gold, Silver, and Copper, where China will release its latest reading on inflation. The Chinese economy has been in a slump for the better part of a year and any uptick in economic activity and inflation would be welcomed as a precious metal investor.
You need four things for a sustained rally in precious metals.
- A Stagflationary environment (declining economic growth, with sticky inflation) keeps the Fed on its back foot.
- A supply/demand imbalance
- Upward price momentum
- Chinese demand – Remember, China is one of the largest consumers of raw materials.
Taking it to the Charts
- The breakout point on Gold is 2401, while close in support remains the 50 DMA, at 2361.7. For me, the “line in the sand” is 2316.
- Silver – First support, July 5th low 30.45; below that, the 50 DMA is 29.90, and the “line in the sand” is 29.21.
Enjoy the benefits of Blue Line Futures
Open an account with Blue Line Futures and you will gain access to our daily commodity commentary, free desktop/mobile trading platforms, 24-hour trade desk, and more!