Daily Spot: Metals

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Gold Feb (GCG) Tuesday’s gap up quickly peaked upon retesting the same outstanding gap that had attracted November’s rally leg higher. Despite dipping intraday into negative territory, the afternoon recovered fully. Closing above 1398.00 signals that the 1427.40 retest is underway, potentially to 1436.50, Rejecting Tuesday’s gain Wednesday would target at least a retest of 1381.00.

Dollar Basket Mar (DXH) Tuesday’s opening gap down did not extend, and recovered into positive territory. The days’ volatility did not gain traction either way. Upside was limited to 79.85, whose recovery on a closing basis would signal momentum reversing up. Still need to recover 80.90-81.10 to signal a larger rally leg is underway. There is no unfinished business below, so any lower low should be temporary.

30-year Treasury Mar (USH) Tuesday’s plunge proved Monday’s shallow new low and recovery were excessive optimism. A myriad of targeted support (targets, lower prior highs, prior lows) were fulfilled in the 119’08-119’20 area. That is not a buy signal, and an immediate recovery would not be credible for launching a durable upleg. Delaying a recovery attempt until next week would be more credible.

Crude Oil Jan (CLF) Tuesday was essentially an inside day that didn’t trend in either direction. It was a a non-event. But it does make Wednesday vulnerable to opening with a gap beyond Tuesday’s range. The attraction above at 90.65 makes gapping up likelier.

Natural Gas Jan (NGF) Tuesday’s extended drop fell far below 4.31-4.35, which had previously held pullbacks. It is very critical that those sellers be trapped – not necessarily by gapping up Wednesday – but by quickly recovering 4.35e, preferably into Wednesday afternoon. Then price would likely be attracted higher by the gaps back to Tuesday’s close and back to Monday’s open. Otherwise, later recovery attempts would be difficult if allowed time to gain traction.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).