Gold (Up $25 today) and Silver Futures for the Next Three Months | Market Rundown
Bank: More Crude Downside in the Cards
Market Rundown:
Good Morning: The dollar is down 2 bps. Bonds are stronger. Stocks are firm after yesterday’s run up. Gold is up $25 trading around $1800 again as the gravitational pull takes effect. The market is again at the technical line so many are looking at and can be in play for a nice rally again. We shall see. Silver is up “only” 38 cents so far. Copper is down. Oil is slightly bid.
Frankly: when Gold runs like this with no apparent other market moving we are happy. That means gold is its own animal still. Maybe they read the story about the Gold manipulation and decided to buy? We wish. Further, the Silver EFP remains backwardated ever so slightly. Perhaps more CTA flows are incoming after 9:30 a.m. Hard to tell yet. Technically: $1805 and $1814 are areas now in play.
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Fed Fails to Quell Rally:
We continue to use the 2 back-to-back weak inflationary data points concept as our signpost that the Fed will actually start to back off on tightening barring a crash or blow-up. But all markets, stocks especially, will test Fed commitment to this by rallying once in a while to see if they have the nerve to raise even more than they say they will.
Yesterday was a classic case of that. Fed says they are tough on inflation. Stocks rally thinking they are not. Fed trots out speakers to talk market down. Stocks ignore them. At some point they have to call the market’s bluff, or the data will call theirs. Meanwhile if the market craps out too much, the Fed has to ease1.
Gold and Silver Futures For the Next 3 Months
The CTA Shorts:
Recall the last 2 weeks where we noted and tracked the shorts in Gold and Silver handicapping they would be stopped out soon. Almost every Silver CTA short was closed out in that 4 day 10% run up.2 The first wave of Gold shorts covered but zero follow-through sadly. Today may fix that however. One very important corollary is: usually at least some of the CTAs reverse and get long. We saw none that did. That tells us 2 things,
The banks did not recommend them to reverse and/or
Investors just do not have the liquidity to put on more risk, implying speculative froth is leaving all markets.
Banks Have to Work Now:
We note this as long time readers (between the lines) of corporate research.
More At Bottom including Oil, and Apple Zen Moment:
Gold, Oil, and Apple at bottom