Morning Express

A huge week for Gold, Silver and Copper. Here are several factors supporting this week’s rally.

E-mini S&P (June) / E-mini NQ (June)

S&P, last week’s close: Settled at 5246.25, up 7.25 on Friday and 91.50 on the week

NQ, last week’s close: Settled at 18,255, up 40.50 on Friday and 254.25 on the week

E-mini S&P and E-mini NQ futures secured a strong week despite hotter than expected 1-year Consumer Inflation Expectations at 3.5% versus 3.2% via the politically fueled Michigan Consumer survey on Friday. The dataset also highlighted eroding Sentiment and Expectations hitting six-month lows. For the record, many studies are proving the survey to be politically divided, something that always can play a factor in soft data, especially during an election year, as opposed to hard data using analytics. Furthermore, the mounting inflation expectations are likely a byproduct of a worsening consumer; if your wallet is stretched, costs become more of a burden. This sets the stage for a pivotal week ahead. PPI is due tomorrow, and CPI and Retail Sales will be released on Wednesday. Remember, producer prices are a leading indicator of consumer prices. It has been no secret that inflation remained more stubborn in the first quarter than expected at the onset. We are of the belief we begin seeing some of those tailwinds reined in. Fed Chair Powell will also be on the docket tomorrow, speaking at an international conference. He has been noted saying that inflation expectations are a self-fulfilling prophecy; imagine if you know gas prices will be higher next week, you will fill your car up this week.

Price action leading into the opening bell Friday was enthusiastic before a whipsaw of profit taking was met with hotter than expected inflation expectations. Still, the tape worked itself higher from a 10:30 am CT low that now aligns as major three-star support in the E-mini S&P at 5232.75-5236 and a similar level in the E-mini NQ at 18,179-18,204. Thursday’s strength pushed the indices out above a bull-flag consolidation pattern, and we view this major three-star support as defining that breakout and a line in the sand fueling a push toward record highs. Despite our optimism, let us not ignore headwinds. It is no coincidence that price action stopped where it did Friday, as we had major three-star resistance noted overhead, and we must see a break above here in order to keep fueling broader optimism.

Bias: Bullish/Neutral

Resistance: 5260.25-5266.25***, 5272.50-5274.25**, 5287.75-5292.75**, 5207-5208.50***, 5215.25-5221****

Pivot: 5250.75

Support: 5243.25-5246.25***, 5232.75-5236***, 5226.75**, 5218.75-52120.75***, 5213-5215.25***, 5200.75-5204.25***, 5184.75-5191.25***

NQ (June)

Resistance: 18,326-18,348***, 18,485*** 18,558-18,607***

Pivot: 18,255-18,271

Support: 18,228-18,237**, 18,179-18,204***, 18,108-18,129**, 18,042-18,078***, 17,962-17,986**, 17,893-17,930***, 17,805-17,826**, 17,743-17,793*** 17,649-17,690****

Crude Oil (June)

Last week’s close: Settled 78.26, down 1.00 on Friday and up 0.15 on the week

WTI Crude Oil futures shed $1.00 on Friday, in a very disappointing session for the bulls. Given Wednesday’s outside bullish reversal and rejection of the consolidation pocket from March we have been highlighting, the lack of follow through Thursday was unenthusiastic before the psychological $80 mark kept a lid on prices. This morning, we are seeing a rebound into formed resistance created by the overhead damage from Friday’s fallout and noted in the levels below.

There was optimistic news over the weekend with Iraq agreeing to follow OPEC’s lead in extending the voluntary cuts, which is likely helping to buoy the market. However, fears of the trajectory of global growth remain a headwind. From Friday night, CPI data out of China nudged higher than expected +0.3% y/y versus +0.1% expected. However, on Saturday, New Loan data came in below expectations at 730 billion Yuan versus 1,200 billion Yuan expected.

Bias: Neutral/Bullish

Resistance: 78.87-78.92**, 79.13-79.26**, 79.90-79.96***, 80.74-80.88***, 81.93***

Pivot: 78.62-78.79

Support: 78.35-78.43**, 77.87-78.06***, 76.90-76.98***, 75.90-76.07***, 75.04-75.10**

Gold (June) / Silver (July)

Gold, last week’s close: Settled at 2375.0, up 34.7 on Friday and 66.4 on the week

Silver, last week’s close: Settled at 28.506, up 0.141 on Friday and 1.816 on the week

Gold and Silver futures had a tremendous week last week. Still, they finished Friday’s session on a dull note due to the hotter-than-expected 1-year Michigan Inflation Expectations (discussed in more detail in our E-mini S&P / E-mini NQ section). However, some of the soft tape could be attributed to profit-taking amid such a rebound, though we would look for renewed underlying strength today in order to confirm such.

We look at precious and industrial metals broadly in order to gauge our appetite for risk in the metals space and the World Platinum Investment Council noted that Platinum faces its 2nd consecutive annual deficit in 2024, further underpinned by weakening supply (-2%). Although demand is seen dropping by -5% this year, it comes on the heels of a 26% surge in 2023. Platinum is +7% month-to-date but faces a critical resistance area at 1020-1030. A break above here could open the door for a move near 1100.

Early session weakness in both Gold and Silver futures tested into a critical area of support. For Gold, we have key support at 2344-2345.8, but a break below rare major four-star support at 2339.5-2340.3 would neutralize last week’s strength. While price action may have gotten ahead of itself on Gold’s two-day run, we do see more value as it retests this critical area of support, as long as it can hold. As we look to the session ahead, keep in mind that PPI is due tomorrow at 7:30 am CT, and we get comments after from Fed Chair Powell at 9:00 am CT.

Bias: Bullish/Neutral

Resistance: 2359.8**, 2363.1-2367**, 2386.3-2387.7***, 2399.4-2404.3**, 2410.1-2413.8***

Pivot: 2353.9

Support: 2344-2345.8**, 2339.5-2340.3****, 2334.2-2336.6**, 2329-2330.7**, 2316.4-2318***

Silver (July)

Resistance: 28.59-28.61**, 28.71-28.74**, 29.00-29.06**, 29.12-29.26***, 29.37**

Pivot: 28.44-28.50

Support: 28.27-28.32**, 28.17-28.22***, 27.83-27.91***

Micro Bitcoin (May)

Last week’s close: Settled at 60,950, down 1,890 on Friday and 1,640 on the week

Bias: Neutral/Bullish

Resistance: 63,440-63,900**, 64,750-64,975**, 65,335*, 66,045-66,552***, 67,155-67,965***, 68,829**, 71,625-71,646***

Pivot: 62,750-63,105

Support: 62,110-62,590***, 61,725**, 60,950-61,060***, 60,386-60,410****, 59,765**, 56,472-57,355***, 55,000-55,290***, 52,240***, 47,000****

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