Overnight, Precious Metals are Mixed after yesterday’s selloff.
Futures came under pressure yesterday as I was filming the Metals Minute as Fed speaker Michelle Bowman delivered a hawkish stance on Fed policy. That and a higher-than-expected consumer confidence figure drove futures weaker into the European Close (10:30 am central).
Europe faces challenges with the Cac-40 wiping out its gains for the year due to the snap elections. The risk-off sentiment in Europe has driven expectations for two additional rate cuts from the ECB. Remember, a weaker Euro equates to a stronger Dollar. The Dollar is at its highest level in two months, and a stronger Dollar equals weaker Gold.
Silver is feeling the burden from two fronts (weaker Gold) and weaker Copper prices due to a deteriorating Chinese Economy. Remember, 54% of Silver demand is from industrial applications.
Today, we will see very little economic data; watch the European Close, Nasdaq, Bitcoin, and the yield curve with the 2-year yield over the 10-Year by as much as a 1/2 a percent.
As the quarter ends this week, traders will reposition in markets such as Gold and Copper, which historically have had strong July performances.
Levels To Watch
S&P – Support 5510-5495
- Resistance 5560
- Pivot 5530
Gold—It remains in a holding pattern and is down as much as 4.5% from its May highs. Support $2300, Resistance $2367, Trend Reversal point $2392
Silver – Low end of a Sideways channel with $28.58 as critical support, the market will have to recapture $29.60 to stabilize. Only a move above $31.52 reignites the bulls.
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