Daily Spot: Metals
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Gold Feb (GCG) Tuesday’s reversal extended down sharply Wednesday to 1372.10. This left outstanding Tuesday’s 1427.40 opening gap up above prior highs that requires its eventual retest.
A close under 1381.00 would have signaled a new downleg underway. If the drop from Tuesday’s high into Wednesday’s low was not a new downleg, but just a correction of the upleg – even if the correction’s recovery were going to hold as expected – then 1381.00 had to hold as support. No matter how deeply it was tested intraday, or how many times, it had to hold as support if Tuesday’s opening gap up were going to be retested.
It did hold, so this should be the lower-end of the range. The upper-end of the range is a recovery back up to Tuesday’s 1427.40 opening gap up and potentially also a fresh high at 1436.50. Then a more durable downleg can begin.
Dollar Basket Dec (DXZ) Tuesday’s recovery extended higher at Wednesday’s open. The balance of the day ranged sideways. There is room down to 79.70 without sellers gaining traction for any more substantial correction. But the rally’s resumption still requires closing above 80.50-80.70.
30-year Treasury Mar (USH) Tuesday’s 2-point intraday drop under prior lows was a breakout. Despite its significant drop, it still required confirmation from a second consecutive lower close Wednesday. It did confirm. With sellers entrenched, there is room for a bounce with potential to 123’06 or 124’00. This is even likelier since so much selling pressure has been expended. Regardless, the 119’14 next lower target is in-play. The monthly 30-year Treasury auction is at 1:00pm ET Thursday.
Crude Oil Jan (CLF) Tuesday’s retest of the prior day’s lows was still in process at the close. It extended down Wednesday, but held 87.50 and ended testing the prior day’s lows. Sellers haven’t gained traction despite expended a lot of energy. A retest of Tuesday’s 90.65 opening gap up is likely, and could form a more durable top.
Natural Gas Jan (NGF) Gapped up Wednesday and closed at a new recovery high. This followed overnight weakness that touched the 4.31-4.35 pullback objective. There is no required unfinished business below to prevent extending the rally. EIA reports at 10:30am ET.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).