BRIC(S) by BRIC(S) Supporting Gold
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 2365.5, down 34.2
Silver, yesterday’s close: Settled at 30.913, down 0.776
Gold and Silver were bludgeoned to start the week. One could argue they went too high, too fast during a holiday week. Although volume in Silver was nothing to write home about, volume in Gold on Friday hit the highest since the June roll on May 28th. Unfortunately, yesterday’s sell volume nearly matched this feat. One could also argue news that China did not add to its Gold reserves for the second month in a row was a sell trigger. However, price action largely held in the hours after the news broke, and India added 9 tons to its Gold reserves, the most in two years, topping the nearly 2 tons China added in April and the 5 tons it added in March. You have to go back to February, when China added 12 tons of Gold to its reserves to top India's purchases. In 2023, China added 225 tons to its Gold reserves, an average of 18.75 tons per month. We do believe that China is not done adding to its reserves, but the likely scenario is the PBOC is attempting not to drive prices while allowing other BRICS nations to accumulate at a faster rate. India increased its 2024 purchases by 32% in June.
Fed Chair Powell visits Congress for his first of a two-day testimony at 9:00 am CT, before July CPI data is due Thursday. There is additional comments around that time from the Fed Vice Chair of Supervision Barr and Treasury Secretary Yellen, but most interesting is Fed Governor Bowman due at 12:30 pm CT. She is known as the most hawkish voice at the Fed and it begs the question, is she planned to balance a more dovish Fed Chair Powell? Certainly, we would believe comments from Powell hold more weight.
While price action finds itself on the backfoot this week, traders can lean into strong seasonality in the month of July, and that price action has so far had a constructive response to Friday’s Nonfarm Payroll whipsaw low. This aligns to create rare major four-star support in Gold at 2353.1-2358.3 and a series of major three-star supports in Silver detailed below. Still, we must reduce our more Bullish Bias given that overnight price action failed at yesterday’s scene of the crime.
Bias: Neutral/Bullish
Resistance: 2374.8**, 2379.2-2381.8***, 2397.7-2401.5***
Pivot: 2371
Support: 2362.2-2365.5**, 2353.1-2358.3****, 2341.6-2343.7***
Silver (Sept)
Resistance: 31.37-31.53***, 31.69-31.80***, 31.98**
Pivot: 31.20-31.25
Support: 30.91-30.99***, 30.68-30.84***, 30.45-30.54***, 30.34**, 30.00-30.17****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Gold, yesterday’s close: Settled at 2365.5, down 34.2
Silver, yesterday’s close: Settled at 30.913, down 0.776
Gold and Silver were bludgeoned to start the week. One could argue they went too high, too fast during a holiday week. Although volume in Silver was nothing to write home about, volume in Gold on Friday hit the highest since the June roll on May 28th. Unfortunately, yesterday’s sell volume nearly matched this feat. One could also argue news that China did not add to its Gold reserves for the second month in a row was a sell trigger. However, price action largely held in the hours after the news broke, and India added 9 tons to its Gold reserves, the most in two years, topping the nearly 2 tons China added in April and the 5 tons it added in March. You have to go back to February, when China added 12 tons of Gold to its reserves to top India's purchases. In 2023, China added 225 tons to its Gold reserves, an average of 18.75 tons per month. We do believe that China is not done adding to its reserves, but the likely scenario is the PBOC is attempting not to drive prices while allowing other BRICS nations to accumulate at a faster rate. India increased its 2024 purchases by 32% in June.
Fed Chair Powell visits Congress for his first of a two-day testimony at 9:00 am CT, before July CPI data is due Thursday. There is additional comments around that time from the Fed Vice Chair of Supervision Barr and Treasury Secretary Yellen, but most interesting is Fed Governor Bowman due at 12:30 pm CT. She is known as the most hawkish voice at the Fed and it begs the question, is she planned to balance a more dovish Fed Chair Powell? Certainly, we would believe comments from Powell hold more weight.
While price action finds itself on the backfoot this week, traders can lean into strong seasonality in the month of July, and that price action has so far had a constructive response to Friday’s Nonfarm Payroll whipsaw low. This aligns to create rare major four-star support in Gold at 2353.1-2358.3 and a series of major three-star supports in Silver detailed below. Still, we must reduce our more Bullish Bias given that overnight price action failed at yesterday’s scene of the crime.
Bias: Neutral/Bullish
Resistance: 2374.8**, 2379.2-2381.8***, 2397.7-2401.5***
Pivot: 2371
Support: 2362.2-2365.5**, 2353.1-2358.3****, 2341.6-2343.7***
Silver (Sept)
Resistance: 31.37-31.53***, 31.69-31.80***, 31.98**
Pivot: 31.20-31.25
Support: 30.91-30.99***, 30.68-30.84***, 30.45-30.54***, 30.34**, 30.00-30.17****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.