Gold Hits 2-Week High as Stagflation Theme Builds | Retail Buys Silver | Metals Minute Phil Streible

[00:00:00]Futures trading involves a substantial risk loss that may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Good morning. It's Wednesday, July 22nd. I'm Phil Streel, chief market strategist at Blue Line Futures. So, Metals Minute episode 706 and looking at the overnight price action in the precious metals here.

[00:00:16]We're continuing to get that push up across the board. Gold, silver, copper taking a little bit of a breather.

[00:00:22]Copper futures up massively yesterday here. Number of different reports coming out. Bank of America releasing one on some of the supply issues. You got the hormones concerns with the sulfur pushing on through there being halted.

[00:00:35]That slows down some of the production process there on that copper market. You got platinum futures starting to push up, but it hasn't really broken out to the upside, but gold and silver breaking out of their wedge patterns.

[00:00:46]Essentially, you got something where it was this kind of triangle pattern and then what happened was is that prices have been coming down. they kind of consolidated and then they broke out to the upside. So, it's a little bit tough to see, but anyways, you get the point here. So, we got this breakout of this wedge pattern that's been occurring. So, you look at the overnight price action.

[00:01:06]August gold here up $45 at 4121. So, nice to see that moving up. My recommendation, don't be really looking at adding too much on the August contract. go out to like the October and the December contract because of the fact that you're going to need to roll over uh this week and into next here.

[00:01:24]And then you look at September silver getting back above $60. Really looking good there. Backing off just a little bit. 5962. We'll see if there's any kind of rugpull. Silver, one of the problems that it's had is it gets this little bit of moment momentum up and then we see this big liquidation occur here. But the setup here right now is really interesting because you do have gold at the highest level in two weeks. Silver posting its biggest rally here in two weeks here occurring alongside an economic shift that's kind of taken place here where we're seeing inflation reacelerate and real growth is slowing here. So the economic setup it creates one of those environments that we've seen in the past that really works well for the gold market. This is where we're also seeing this oil market. That's the only thing that I don't like to see pushing on up because a lot of times strengthens the dollar, strengthens the case here for the Fed to raise rates and then that tends to weigh in on that gold market, take silver down with it. So, we'll see if this oil market going to peak out anywhere here anytime soon. But we haven't really seen much progress take place, at least in the Middle East here. So, you've got copper futures pushing up. You got treasury yields rising as well with that oil market creating that stagflationary type environment and we have to expect to see that decline in that July CPI but now a reaceleration in the August because of the fact that so many things are pushing up even look at the grain markets pushing on up as well. So you look at capturing the growth environment that we monitor here. We tend to look at this is on the economy. We look at housing. We look at manufacturing. We look at consumer spending. We look at the labor, the employment. And that's where we get that measure of how the growth element of the economic environments occurring.

[00:03:10]And recently we've seen those mortgage loan applications. They continue to decline five out of the last six weeks.

[00:03:16]the ADP employment on track here to slow to the lowest levels since March. We've got TSA traveler numbers, they're declining and consumer spending, well, that's been moderating here. So, it's the setup here where you get the rising inflation, you get the declining growth, and then the Fed, they typically want to raise rates because of the fact of that higher inflation, but they can't because of the growth aspect of it, which is now declining. So, again, back tested stagflation, one of the best economic environments for the gold market. So, the other thing that really got things hot and bothered in those metals markets, and we've been covering this, and you look at the title of the metals minutes over the last, you know, several sessions, it's been those ETF flows here. So, the ETFs now, they did a little bit of swapping going on here.

[00:04:01]They were buying some gold. They were selling some silver, but nothing really too big or out of the ordinary. The exchange traded funds, they added 237,000 troes of gold, biggest 1day increase since June 19. And then the ETFs, they cut 264,000 Troy ounces of silver. So, you know, you look at the cross asset picture because it's something you definitely want to be aware of here. You look at the crude oil market. You got September crude oil up $2.88 and at 8720 getting as high as 88.61 in the low84.44.

[00:04:31]Then you get Brent crude oil here pushing on up to $95. So up $3.15 kind of backing off just a little bit. You got natural gas prices pushing on a touch higher here and heating oil and arbot both pushing up as well. So the energy front across the board has been rising here and then that's helping push up some of these other markets. You're seeing like the wheat market pushing on up as well. Sugar futures been pushing on up a touch here as well. So you check out on the interest rates and the CME Fed watch tool. Those expectations they are now elevating a bit here for that rate hike on July uh 29th here and it's a big jump from yesterday here. So, at 26% chance in the of those odds and then two-year Treasury yields, four and a quarter, 10-year yields, 4.62, we will have those NBA mortgage applications coming out. And then you check on the equity markets because equities taking a bit of a breather here overnight. Mag 7 stocks are they're mixed here in the pre-market. We've got some key earnings coming out of Alphabet, Tesla. We'll also have IBM here later on today. The S&P 500 futures down about 2/10en of a percent. NASDAQ down about half of a percent here as of this recording. And you look at the earnings front here. 70 of the S&P 500 companies. They've reported so far 90% have beat the analyst forecast. 4% have missed. 73% of the companies have positively surprised on sales and 9% have missed. So you go over to Europe and you go over to Asia.

[00:05:53]That's where a lot of the fireworks been taking place here specifically in Asia.

[00:05:56]But those European stocks, they did move higher. Spain's biggest letter, Stant Sand Tander. Here they posted their second quarter net income that beat the analyst estimates. That was all the talk last night on Bloomberg. And then you go to Asian trading, the MCI Asia Pacific index just edging up just a bit here with the volatility in SKH Highex with it falling as much as 2.2% after being 7% higher. So it's triggering some of those side cars over there, uh, which is a pause in the trading momentum. So, if you guys got any questions, a lot of people picking up like call options in the silver market, looking at September, not a recommendation to the public, but they were looking at those $70 calls here yesterday, the day before. They were also looking at uh on the gold market, looking at futures on there, but the october contract, copper futures we want to keep an eye on here because that is quite at an elevated level as well. A lot of people, a lot of the dip buyers trying to work their way into the crude oil market here, but not really giving up um much of that at all. And then one thing to note here is that you got the dollar index kind of pushing up, getting back to that 101 level here. And that's going to be interesting because the dollar index may push up. It may break back out to the upside here. So a lot of dip buyers coming in the S&P 500 and then also looking at the Dow as well and the Nikkei. They've been picking that up all those three indices. So if you guys got any questions here, shoot us an email, give us a call, be sure to like and subscribe to this video here. A lot of people watch it, but they don't uh they don't subscribe to it. So, we'd love to um you know get you on the regular rotation and a lot of people register for some of the things like the navigating the week ahead email. We also put out the metals edge here that's got those daily support resistance levels here. Give you some charts, give you some key commentary. I bold some of those key levels here that you want to watch and some of the developments that um that take place here in the metals markets. But again, you guys got any questions, shoot an email [email protected].

[00:07:47]Remember, futures and option trading does involve risk a loss. May not be suitable to all investors. Good luck, good trading. Futures trading involves a substantial risk of loss and may not be suitable for all investors.