Metals

Archive for Metals – Page 39

Trade of the Week: Gold to retest $1700 support?

At the start of this new trading week, spot gold has been dragged down to closer to the $1700 mark, although prices have trimmed losses at the time of writing.

And depending on how this Friday’s US nonfarm payrolls report turns out, the precious metal could retest that psychologically-important level for support.

Why has gold tumbled again?

The precious metal is clearly wilting in the wake of the scorching US dollar and the uptrend in Treasury yields.

These moves (gold down, dollar/Treasury yields up) have been fuelled by revived bets that US interest rates will move higher, and more importantly – stay elevated, for longer.

Markets have been gripped by Fed Chair Jerome Powell’s hawkish speech delivered at Jackson Hole this past Friday.

Here are the key takeaways:

The Fed is set to persist with sending US interest rates higher.
US interest rates are set to stay higher “for some time” (as in, the Fed isn’t likely to unwind its rate hikes in a hurry, as some segments of the markets had predicted up until recently).

In essence, the US central bank remains committed to subduing in inflationary pressures, even if it results in some pain for the economy.

Such language heralds a stronger US dollar and Treasury yields marching higher: a bad mix for bullion bulls.

What does the upcoming US jobs report have to do with gold prices?

Depending on the demonstrated strength of the US jobs market, that would inform the Fed as to how high it could send US interest rates.

A still-resilient US labour market would essentially give the green light for the Fed to send its benchmark rates even higher.
In turn, that should heap more downward pressure on gold.
Signs that the US labour market is starting to creak under the weight of higher interest rates may force the Fed to adopt a more gradual approach with its rate hikes; thus spelling some relief for gold.

What to look out for in this Friday’s US jobs report?

As things stand, markets are forecasting the following:

US labour market added a further 300,000 jobs in August, judging by the headline US nonfarm payrolls (NFP) figure. If so, that would mark a 20th consecutive month of job gains.
However, an official print of 300k would also mark its lowest number of jobs added since December 2019.
The August unemployment rate would stay at 3.5% – at its pre-pandemic lows.

Overall, the US jobs market is expected to remain resilient, even though the Fed has been hiking interest rates since March.

How might gold react to the upcoming NFP?

If the US labour market adds more jobs than forecasted, that could lead to more declines in gold prices.

Potential support levels:

$1712: using the downward trendline that has gone from resistance to support level.
$1700: stronger support should arrive at this psychologically-important line, noting that previous dips below $1700 have proved short-lived in recent years.

Such declines would be based on the notion that still-robust hiring in the US is likely to give the green light to the Fed to continue sending interest rates higher, which in turn should heap more downward pressure on gold prices.

However, if the US jobs market is starting to creak, that could force the Fed to adopt a more ‘gradual’ approach with its rate hikes.

That is to say policymakers may be more comfortable with triggering rate hikes that are relatively smaller than the 75bps hikes it has already triggered at each of its past two policy meetings. Smaller rate hikes may then be the way forward for policymakers, if they begin to fear choking the US jobs market and sending the US economy into a deep recession.

Such a narrative could then prompt a short-term rebound in spot gold.

Potential resistance levels:

$1764: around 50-day simple moving average (SMA)
$1800: stronger resistance set to arrive at psychologically-important mark

In summary:

Markets are currently forecasting a slightly higher chance (21.5%) of spot gold touching $1700, rather than prices reaching its 50-day SMA (20.8%) around $1764.

Ultimately, it could all come down to whether or not this Friday’s US nonfarm payrolls reports exceeds market expectations.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

20 Aug

COT Metals Speculators raise Platinum bullish bets higher for 3rd week

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday August 16th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes Week 33: Platinum bullish bets rise

COT precious metals speculator bets were overall higher this week as four out of the five metals markets we cover had higher positioning this week with just one market had lower contracts.

Leading the gains for the precious metals markets was Platinum (2,094 contracts) with Silver (629 contracts), Palladium (371 contracts) and Copper (257 contracts) also showing positive weeks.

The metals markets leading the declines in speculator bets this week were Gold (-1,687 contracts) on the week.

Highlighting the metals data this week is that Platinum speculator bets that have bounced back a bit over the past three weeks after a recent down-streak that put the position in negative territory. The Platinum large speculator positions rose this week for a third straight week and for the fourth time over the past five weeks. This recent uptick has pulled the overall position out of a bearish level that had held from June 28th to August 2nd. This week, the current position increased into a small bullish level of +2,940 contracts. The Platinum futures price, meanwhile, took a step back this week with a loss. The futures had previously seen four straight weekly gains before closing the week below the $900.00 level.

Data Snapshot of Commodity Market Traders | Columns Legend

Aug-16-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,557,349	0	214,940	1	-239,291	100	24,351	48
Gold	453,960	0	141,164	19	-153,709	84	12,545	4
Silver	144,314	11	3,508	10	-12,451	90	8,943	12
Copper	183,500	17	-28,220	22	28,932	79	-712	21
Palladium	7,951	7	-1,599	14	1,536	83	63	48
Platinum	57,254	17	2,940	12	-6,361	90	3,421	10
Natural Gas	983,460	5	-120,911	42	82,862	57	38,049	70
Brent	176,902	21	-36,012	51	34,290	50	1,722	33
Heating Oil	296,987	34	24,926	79	-40,022	29	15,096	51
Soybeans	595,095	5	83,183	39	-51,650	68	-31,533	18
Corn	1,316,462	1	220,129	58	-166,318	48	-53,811	12
Coffee	190,302	0	33,471	68	-35,318	37	1,847	16
Sugar	737,535	7	49,970	47	-61,837	56	11,867	23
Wheat	313,237	11	-1,908	17	7,448	70	-5,540	82

Strength Scores

Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) showed that Copper is the highest metals market currently at just 22.0 percent of its 3-year range. The rest of the metals markets are all in bearish extreme levels (below 20 percent) and have been for a while now. Gold (18.6 percent), Palladium (13.8 percent), Platinum (12.0 percent) and Silver (9.7 percent) round out the rest of the metals market in strength scores.

Strength Statistics:
Gold (18.6 percent) vs Gold previous week (19.2 percent)
Silver (9.7 percent) vs Silver previous week (9.0 percent)
Copper (22.0 percent) vs Copper previous week (21.9 percent)
Platinum (12.0 percent) vs Platinum previous week (9.2 percent)
Palladium (13.8 percent) vs Palladium previous week (11.7 percent)

Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Palladium (10.2 percent) leads the past six weeks trends for metals this week. Platinum (7.7 percent) and Copper (2.6 percent) are the only other positive movers in the latest trends data. Silver (-2.0 percent) and Gold (-1.7 percent) lead the downside trend scores currently but have both improved since last week.

Move Statistics:
Gold (-1.7 percent) vs Gold previous week (-5.7 percent)
Silver (-2.0 percent) vs Silver previous week (-9.7 percent)
Copper (2.6 percent) vs Copper previous week (1.6 percent)
Platinum (7.7 percent) vs Platinum previous week (2.9 percent)
Palladium (10.2 percent) vs Palladium previous week (10.4 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week reached a net position of 141,164 contracts in the data reported through Tuesday. This was a weekly fall of -1,687 contracts from the previous week which had a total of 142,851 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 18.6 percent. The commercials are Bullish-Extreme with a score of 83.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.6 percent.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.5	27.0	8.3
– Percent of Open Interest Shorts:	21.4	60.9	5.6
– Net Position:	141,164	-153,709	12,545
– Gross Longs:	238,196	122,566	37,826
– Gross Shorts:	97,032	276,275	25,281
– Long to Short Ratio:	2.5 to 1	0.4 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	18.6	83.7	3.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.7	4.3	-20.2

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week reached a net position of 3,508 contracts in the data reported through Tuesday. This was a weekly rise of 629 contracts from the previous week which had a total of 2,879 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.7 percent. The commercials are Bullish-Extreme with a score of 90.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.3 percent.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.2	41.4	16.1
– Percent of Open Interest Shorts:	30.7	50.0	9.9
– Net Position:	3,508	-12,451	8,943
– Gross Longs:	47,851	59,753	23,230
– Gross Shorts:	44,343	72,204	14,287
– Long to Short Ratio:	1.1 to 1	0.8 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	9.7	90.0	12.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.0	-0.8	12.0

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week reached a net position of -28,220 contracts in the data reported through Tuesday. This was a weekly rise of 257 contracts from the previous week which had a total of -28,477 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.0 percent. The commercials are Bullish with a score of 79.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.2 percent.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.5	46.4	7.7
– Percent of Open Interest Shorts:	40.9	30.7	8.1
– Net Position:	-28,220	28,932	-712
– Gross Longs:	46,797	85,187	14,097
– Gross Shorts:	75,017	56,255	14,809
– Long to Short Ratio:	0.6 to 1	1.5 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.0	79.3	21.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.6	-1.7	-6.8

Platinum Futures:

The Platinum Futures large speculator standing this week reached a net position of 2,940 contracts in the data reported through Tuesday. This was a weekly lift of 2,094 contracts from the previous week which had a total of 846 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.0 percent. The commercials are Bullish-Extreme with a score of 90.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.6 percent.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	45.8	39.7	11.3
– Percent of Open Interest Shorts:	40.7	50.8	5.3
– Net Position:	2,940	-6,361	3,421
– Gross Longs:	26,218	22,749	6,467
– Gross Shorts:	23,278	29,110	3,046
– Long to Short Ratio:	1.1 to 1	0.8 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	12.0	90.2	9.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.7	-6.1	-13.7

Palladium Futures:

The Palladium Futures large speculator standing this week reached a net position of -1,599 contracts in the data reported through Tuesday. This was a weekly advance of 371 contracts from the previous week which had a total of -1,970 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 13.8 percent. The commercials are Bullish-Extreme with a score of 83.4 percent and the small traders (not shown in chart) are Bearish with a score of 47.5 percent.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.6	54.9	15.1
– Percent of Open Interest Shorts:	38.7	35.6	14.3
– Net Position:	-1,599	1,536	63
– Gross Longs:	1,479	4,363	1,202
– Gross Shorts:	3,078	2,827	1,139
– Long to Short Ratio:	0.5 to 1	1.5 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.8	83.4	47.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.2	-14.3	43.8

Article By InvestMacro – Receive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

16 Aug

Gold And Silver: Is It A Trap?

By Ino.com

Back in June, I shared with you an alternative scenario for gold with a downside trigger on the trendline support.

I highlighted it with a purple color in the weekly gold futures chart below. This area is fortified with the red horizontal trendline based on the former valley of $1,678. Though, it’s a double support level.

Source: TradingView

It is amazing how accurately the price bounced off that strong support. The metal took its chance to jump to the upside amid the falling yield of 10-year U.S. government bonds (10Y).

The easing inflation data limits the hawkish expectations on the Fed rate hikes. Though, the 10Y’s advance has been paused as the market took some gains amid uncertainty.

However, the real interest rate is still strongly negative at -6%. The labor market shows vitality according to statistics. This leaves the room for the Fed to keep tightening until something breaks down.

The 10Y bounced off recently from 2.6% to 2.85% and nobody knows if it’s a continuation or a consolidation.

The gold market has been trapped with the whole uncertainty as it has built a large sideways consolidation since August 2020.

As long as the gold futures price keeps both above the former valley of $1,678 and the trendline support there is a chance to see the retest of the all-time high of $2,089.

For a bullish setup, the price should chart the minor correction that should not drop below the recent valley followed by the breakup of the most recent minor top as shown with the blue zigzag.

The RSI is close to the neutral area and it should move above the “waterline” of 50 to support a further advance of the price.

Such a large consolidation could bring a hope for gold bulls for a really big gain, as size matters! The longer it takes the market to digest the uncertainty, the stronger will be the new base for a new launch of the price to the upside.

Let us watch to see if the price will keep its grip above current support otherwise it would be a trap.

Source: TradingView

The silver chart was so bullish and so clean in my earlier update this March.

Much to the regret of silver bugs, the price couldn’t overcome the top of a junction at the confirmation level and then it rapidly lost its shine and a glory.

The drop in the second red leg down was sharper as was the Fed with a tightening. I relocated the labels of the red legs down as the structure got clearer over time. This is the tricky nature of corrections.

The silver futures have an ideal reaction on the chart. The volume profile has shown an amazingly accurate support in the second largest volume zone in the $18 area. The price bounced off right there. The 61.8% Fibonacci retracement is also here. The last valuable measurement is the size of red leg 2 compared to red leg 1 – the former is longer than the latter and that is a sign of sufficiency.

The most of you didn’t buy the target of $80 based on the giant Cup & Handle pattern and preferred the conservative targets within $40-$50 range.

Bulls should push the price above the nearest barrier of $22.6 first to overcome the volume gap pit where the silver futures price is now.

The RSI must break above the neutral level above 50. The final confirmation is located at the apex of the junction at $27.5. The new target based on a lower C point is located at $36.7.

The trap could evolve if the silver futures price drops below the most recent valley of $18.

Intelligent trades!

Aibek Burabayev
INO.com Contributor

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: Gold And Silver: Is It A Trap?

Financial News Metals

13 Aug

Gold & Silver Large Speculator bets continue to gain after falling to multi-year lows

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday August 9th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes

COT precious metals speculator bets were higher again this week as five out of the five metals markets we cover had higher positioning this week while just one market had lower weekly contracts.

Leading the gains for the precious metals markets was Gold (18,525 contracts) with Platinum (3,387 contracts), Silver (1,905 contracts) and Palladium (590 contracts) also showing positive weeks.

The only metals markets with a decline in speculator bets this week was Copper with a decrease of -1,071 contracts.

Highlighting the COT metals changes this week is the strong rebound in Gold speculator bets over the past two weeks. This week’s +18,525 contract rise followed last week’s +31,636 contract jump for a two-week gain of approximately +50,000 contracts. This positive speculator sentiment has pushed the Gold bullish level to the highest of the past five weeks. Previously on July 26th, the Gold speculator level had fallen to the lowest level in one hundred and sixty-five weeks, dating back to May 28th of 2019 and near the height of the COVID-19 pandemic panic when most markets were going haywire. The Gold futures price has been on the rebound as well after hitting a recent low near $1,678.50 on July 21st. The Gold price has had four straight positive weeks and closed out this week near the $1,815.50 level.

Silver speculator contracts rose this week for a second consecutive week and rose a little further away from bearish territory. The Silver speculator positions had previously dropped into bearish territory on July 26th, a rare occurrence and the first time it has happened since June 4th of 2019 (a span of 164 weeks). Silver bets have seen a modest rebound over the past two weeks while the Silver futures price has risen in two out of the past three weeks. Silver is back above the $20 threshold after bouncing off the $18 level for a few weeks in July.

Data Snapshot of Commodity Market Traders | Columns Legend

Aug-09-2022	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,570,131	0	210,651	0	-238,073	100	27,422	53
Gold	453,540	0	142,851	19	-154,554	83	11,703	1
Silver	141,093	8	2,879	9	-13,574	89	10,695	21
Copper	187,988	21	-28,477	22	27,700	78	777	30
Palladium	7,619	6	-1,970	12	2,044	86	-74	40
Platinum	62,782	26	846	9	-4,055	93	3,209	7
Natural Gas	969,582	3	-125,419	41	86,734	58	38,685	72
Brent	175,896	21	-34,211	54	32,411	47	1,800	34
Heating Oil	283,749	29	24,464	78	-36,472	32	12,008	40
Soybeans	583,208	2	88,901	41	-62,971	65	-25,930	27
Corn	1,317,913	1	210,786	57	-160,654	49	-50,132	14
Coffee	209,446	13	30,453	65	-31,268	41	815	7
Sugar	765,669	12	26,065	42	-30,608	62	4,543	13
Wheat	320,767	14	-3,426	15	9,939	74	-6,513	77