Daily Spot: Metals
A weekly summary of one complex, including daily updates of other developments elsewhere.
[pay]Gold Dec (GCZ) Gold narrow ranging Tuesday was a non-event, even overnight, as currencies are starting to dance more to their own tunes. There is potential to dip, but even a drop is unlikely to become a new downleg.
Hesitation at filling the gap back to last Thursday’s 1357.60 gap open (dashed line on nearby chart) continues to reinforce the pessimism. Pessimism doesn’t end rallies, or launch new downlegs.
And the longer the delay to filling last Thursday’s opening gap, the likelier to probe it. Candidates include the 1362.40 intraday high, but more likely a retest of the 1366.00 overnight high up to 1370.50. I’m very reluctant to be a seller before neutralizing at least one of these elements.
Meanwhile, the consolidation has formed an Ascending Triangle. Forming under the trend extreme, without incorporating it, makes the pattern “complex.” It’s still likely to resolve up, but that resolution is likely to react down much, much more sharply than the triangle’s breakout.
30-year Treasury Dec (USZ) The bond was all but closed on Monday’s holiday. A dip got underway with room down to 133’06-133’08. Its test can launch another upleg targeting 135’20. But closing under 133’06 would extend the decline to levels capable of offering only obligatory support and temporary bounces.
Crude Oil Nov (CLX) An overnight was recovered, as was another dip intraday, but neither into positive territory. Sellers are expending energy without gaining traction. A retest of the high above 84.00 would be triggered above 82.65. Otherwise, closing under 81.00 would suggest a downleg already underway.
Natural Gas Nov (NGX) There was no way to avoid new lows, which is how Tuesday started. The day ended by probing “higher prior lows” as resistance. This is not yet a rejection of the lows, and it is not buyers gaining traction – there is no unfinished business below. But sellers gained no traction for their efforts, which can become bullish. Recovering 3.65-3.68 could trigger a new rally leg.
Dollar Basket Dec (DXZ) Monday’s recovery from Sunday night’s new lows failed to close above last Wednesday’s close. Closing Tuesday above their 78.00 interim high might have served by proxy, but the open’s gap up made 78.00 likelier to push back. It did, back into negative territory. A new rally effort would be credible, but another test of the lows cannot be ruled out.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).