Daily Spot: Metals

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

Gold Dec (GCZ) [Next week I will be adding coverage of Copper (HG) and Silver (SI)] Further evidence of a major trend change underway came Tuesday, when both Gold and the Dollar firmed simultaneously. Normally correlated markets become disjointed from each other, and appear to decouple, as their turns are not always in sync.

Meanwhile, there remains potential for Gold to probe fresh highs for the week. Monday’s recovery all the way back up to last week’s already well-tested 1347.00 resistance – after so deep of a pullback in the interim – makes a fresh high likely. Testing 1357.00 and perhaps also 1363.00/1366.00 before reversing down would refuel sellers for more durable downleg.

Otherwise, simply extending down under 1335.00 would trigger the next downleg, albeit a more limited and temporary correction.

Dollar Basket Dec (DXZ) Tuesday’s gap up to test 78.00 left another gap outstanding back to Monday’s close. It also avoided neutralizing the recent optimism that limited the pullback from fulfilling a test of 76.65 where a more durable bottom could form. Nevertheless, 78.00 is an inflection point, and its recovery would be credible for extending higher. Resistance at the gap back to 78.50 would be the last chance to prevent a multi-week temporary corrective rally.

30-year Treasury Dec (USZ) With no unfinished business above, Tuesday’s open gapped down under the 131’25 sell signal and extended down to probe new lows. The breakout resumes a bigger Double Top underway, its next objective in-play at 128’14 if confirmed by a lower close Wednesday. A close above 131’25 Wednesday would invalidate the breakout.
Crude Oil Nov (CLZ) Still waiting for close under 81.50-81.55 to trigger the next downleg. There is no mandatory unfinished business above whose outstanding retest would change the pattern.

Natural Gas Nov (NGZ) Monday had fulfilled all lower objectives: 1) a new low on Monday is all but required following new low on Friday, and 2) a new low was required following Friday’s confirmation of Thursday’s breakout. Despite an otherwise bearish session – gapping down, probing new lows, trading entirely in negative territory – Monday’s close was still in the process of testing Friday’s prior low. Any strength Tuesday would have been credible for extending higher, and its open did gap up and extend sharply higher. A complete retracement intraday filled the open’s gap back to Monday’s close. Another agrressive open or close above 3.80 would be credible again for extending higher.

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