Silver Spiking Again | Market Rundown
Goldman on Oil, Barclays on Gold
Today:
Market Rundown
Barclays on Gold
Goldman on Oil
1- Market Rundown:
Good morning. The dollar is down 20. Bonds are stronger. Stocks are all up 50-60 bps. Gold is up $5 Silver Fu. are up 44c and lead this rally today thus far. Crude oil is up 64c. Crypto is up 50-150 bps and Grains are all up about 35bps.
Data
8:30 am GDP (2nd revision) 2.7% 2.7%
8:30 am Initial jobless claims March 25 195,000 191,000
8:30 am Continuing jobless claims March 18 -- 1.69 million
12:45 pm Boston Fed President Collins speaks
12:45 pm Richmond Fed President Barkin speaks
1:00 pm Minneapolis Fed President Kashkari speaks
4:15 pm Fed H.4.1 report on bank lending
2- Bullish Barclays: Buy a GLD May23 185/200 call spread
Their report touches all the bases for Gold but stops short of recommending to get long outright. The whole report is accurate yet seemingly hedges the trade recommendation… odd.
Our notations in red…
Here are the key points of their idea:
Central case is favorable to gold, but positioning/performance is stretched;
Consider renting upside
Base case bodes well for gold, but economic uncertainty calls for stock replacement
Gold at the mercy of economic outlook and policy path expectations
We like the trade idea despite the tepid recommendation.
3- Goldman’s Bullish trade recommendation for Oil
Goldman is suggesting to clients to buy a 30 delta call, sell both a 25 delta put and sell a 5 delta call to partially finance the purchase. The idea is to lean into the current heavily weighted put skew in oil to take a bullish stance.
For investors looking to position for higher near-term prices while taking advantage of current skew levels, we present the following trade idea: Long CON3 85-115 Call Spread, Short CON3 70 Put.
The combination of light bullish fund positioning, short CTA positions, and heavily put skewed options gives a good setup for a short term spike higher they feel.