President’s Trump and Xi met at the G20 and announced they wouldn’t increase tariffs as they attempt to restore trade negotiations. The dollar and stock market responded positively; gold tanked. The kneejerk reaction in gold was reversed entirely today. I think the rally in metals and miners can extend if we get decent upside follow-through from here.
The pullback in silver looks constructive. Prices held up relatively well during gold’s sharp selloff. I’m considering a swing trade in USLV.
US markets close at 1:00 PM tomorrow. There will be no Thursday report due to the fourth of July Holiday. I’ll update tomorrow if I take the USLV trade.
-US DOLLAR- The potential bear flag broke down after President’s Trump and Xi agreed not to increase tariffs. That sent the dollar sharply higher and gold lower. Currently, the dollar is backtesting the 200-day MA. Prices need to close above Monday’s high (96.42) to support a bottom. Otherwise, Monday’s kneejerk reaction will be viewed as temporary.
-GOLD- Prices slipped to test secondary support near $1385 after the G20 tariff announcement. Gold recovered today and closed back above $1400, forming a bullish engulfing candle. Upside follow-through that finishes above $1425 would promote another leg higher.
-SILVER- The structure in silver resembles a consolidation before the next leg higher. Closing below $15.00 at any point this week would signal a potential breakdown.
-PLATINUM- As long as platinum doesn’t close below $820, I think the odds still favor a jump to $865 – $885 to complete the W-bottoming pattern.
-GDX- Volatility is increasing. Miners gapped lower yesterday and finished below the support area near $24.75. That kneejerk reaction was reversed entirely today. If miners are going to make good on the potential measuring gap, they need to follow-through higher relatively soon to sustain June’s momentum thrust.
-GDXJ- Juniors reversed yesterday’s down gap. Upside follow-through from here would keep the potential measuring gap targeting $39.00+ alive.
-SPY- Stocks closed at new all-time highs. We are within striking distance of the broadening wedge boundary near 300.
-WTIC- Oil dropped sharply after testing resistance near $60.00. Prices need to hold support around $55.00 to prevent a more profound breakdown.
Have a great night.