Gold/Silver – The Week Ahead

Overnight, Precious Metals are Weaker after Friday’s snapback rally.

If you trade U.S. Equity indices, you will want to roll from June to September today.

Equities futures have drifted sideways after European stocks began to slide. France’s CAC-40 erased its gains for 2024 after analysts downgraded the region following calls for a snap election. It is essential to watch global equities beyond the U.S., where a secular “Bear Market” could be several weeks away. We will want to wait for a technical confirmation before attacking the bear side.

I know many of you trade mining stocks. You will want to pay special attention to a bear market in Stocks. Why? Remember that miners are just companies, and over time, they tend to correct the same way as equity markets. Traders seeking safety from a correction often rotate into safe haven assets such as gold bullion rather than miners.

Process – Identify what economic reports come out this week and how they impacted the markets I trade from the previous month

This week in the U.S.

Monday – Empire State Manufacturing Index

Tuesday- Retail Sales and Industrial Production

• Last month’s retail sales miss (Result Gold up $28)

Wednesday – U.K CPI/Core – Expected to Cool

Thursday – Initial Claims – Expecting 240k

Friday – Flash Services PMI

• Flash Services PMI – Expected to Cool

Rewind

Wednesday – May 22

• U.K. inflation data surprised with a higher-than-expected reading, leading to market speculation that the U.S. would follow suit. This anticipation caused a breakout in the U.S. 2-year Yields.

Result – Gold down $42

Thursday – May 23

• Flash Manufacturing PMI – Expected 50 – Actual 50.9
• Flash Services PMI – Exected 51.2 – Actual 54.8
• A Number above 50 indicates expansion and is a leading indicator of the economic health of businesses

Result – Gold down $51

Gold 

Market Remains “Bearish Trend” as long as the market remains below $2402

• The market needs to retrace the June 7 sell-off, which shifted the market on my proprietary trend discovery system from a “neutral to a bearish trend.” $2300 is the critical level of support. I may recommend to our clients to buy $2300-2250 put spreads for protection against long positions.
• Stochastics are rising from oversold territory, DMI+ could cross above DMI- and the average true range is $38.

Silver

The price moved to a neutral trend because of the close below $29.14 on June 13. However, it has recaptured the 50 DMA. Stochastics have declined into oversold territory; the average true range is $1.09/oz.

• The two levels to watch on Silver are $31.20 and $28.26. A close above triggers new bullish momentum, whereas a break below $28.26 opens the door to another wave of selling.

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