Daily Spot: Metals
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Gold Feb (GCG) More impressive than Tuesday’s $47 plunge is that it only retrace to last Monday’s close. A massive sell-off began by gapping down under the ever-relevant 1407.00 level. Rather than recover back above 1411.00-1414.00 to absorb sellers, the drop extended down, and down.
An outstanding gap back to last Monday’s 1383.40 close was filled by mid-morning. Its initial reaction resolved in fresh lows that probed under last Monday’s 1378.40 low. Its probe held on a closing basis, but that did not rob sellers of their traction.
A close above last Monday’s 1384.80 high would trigger at least a corrective bounce. Its target would be “higher prior lows” at 1403.00-1404.00. Closing under 1378.00 would next target 1361.00.
Dollar Basket Mar (DXH) Too pessimistic to take sellers too seriously. Tuesday’s low kissed support at the prior bottom’s 79.11 overnight low. Its reaction up stopped pessimistically short of touching 79.85, or filling the gap back to Thursday’s 79.88 close. This is despite having recovered to session highs before noon. That’s extra ineffectual pessimism, which is potentially bullish from a contrarian perspective.
30-year Treasury Mar (USH) Too pessimistic for too long not to be concerned if buyers don’t reassert themselves immediately. Monday’s recovery had stopped pessimistically short of filling the gap back to Friday’s close. So did Monday, and it closed under 121’14. Both the added delay and the lower close require an immediate recovery that extends to fresh highs so sellers do not gain traction.
Crude Oil Feb (CLG) The volatility is due for a rest. Tuesday’s opening break under the 91.00 sell signal slid sharply until probing Thursday’s 89.00 low. A bounce was rejected by a fresh low. Thursday’s low ultimately held as support to rob sellers of their traction. But the low’s interim high was not recovered. Buyers did not gain traction, so any bounce should fail and resolve in fresh lows.
Natural Gas Feb (NGG) Inside day gives breathing room for a corrective dip. The room for a pullback down to 4.50 wasn’t fully utilized by Tuesday’s inside day. Wednesday could still test it. Regardless, its test would require a quick rejection to new highs above 4.69.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).