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Gold/Silver: New Month, New Markets

August is officially in the books, and other than Platinum rising $100 from $885 to $985, there was little to get excited about. Precious Metals were flat, where hot economic data and a hawkish Federal Reserve supported the U.S. Dollar and Treasury Yields, further pressuring prices. As the month went on, softer prints from Consumer Confidence, ADP, GDP, and Jolts data cast doubts on the Fed's ability to maintain its hawkish stance. The September FOMC meeting now sits at a 93% chance that the Fed will leave interest rates unchanged. China made another attempt to support its economy overnight by cutting the reserve requirements on foreign currencies. The immediate reaction was a breakout in Copper prices and a retest of the 200-day moving average. Still, as the day session progressed, better-than-expected employment data left traders uneasy ahead of the long weekend, booking gains in Copper and reducing exposure in Precious Metals. 

Daily Silver Chart

Silver futures started the week on a firmer note but fell back as the week progressed and look susceptible to a more extensive correction next week. In the last article, I indicated that breakout traders will use a close above $24.75 to establish new long positions. However, the lack of upside momentum makes me question the strength of this "bull market." Those long Silver will want to use $23.79 as their stop-out point or short-dated put options such as the "week two, $24.50 puts" for protection. Remember, prices remain trapped between $$23-22 on the downside and $26-25 on the upside and lack a real catalyst to trade any higher. For those of you who are "perma bulls" on Silver, it would be wise to wait for a correction before adding to positions.

We have recently updated our "5-Step Technical Analysis Guide" and integrated our "Top 5 trade ideas for Q3." Please download and review our Copper, Gold, and Silver strategies. The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here:  New 5-Step Technical Analysis Guide.

Daily Gold Chart

Gold futures have risen since mid-August, with $1900 on the downside and $1980 on the upside. The technical perspective shows momentum studies struggling to maintain overbought levels. As long as 10-year Treasury Yields remain above 4% and the U.S. Dollar above 102.90, it is hard to bet on a near-term move back above $2000. It would take a close over $1986 to switch trend traders to the long side, while a close below $1938 will open the door for another retest of $1900. 

Having the flexibility to enter and exit the market quickly makes it essential for Precious Metals investors to have a futures trading account alongside their core Physical Precious Metals holdings. If you are interested in speculating on the rise and fall of the price of Precious Metals on a shorter-term basis, such as two weeks or two months, or If you have never traded futures or commodities, check out this new educational guide that answers all your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book.

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