Weak Jobs Data, Stocks And Gold

Gold and Silver

gold and Treasury yields

Gold had a good chance to rebound higher throughout this week, but didn‘t – given its Monday‘s performance, I had some reservations even as the support zone held, and upswing could easily follow – especially given the positive copper to oil ratio‘s move, or TLT not putting fresh pressure. But that‘s not happening in today‘s pre-market session, as the support‘s lower border is being tested again.

silver, platinum and copper

Silver keeps holding the $26 level, and still trades at the 50-day moving average. While it‘s lagging behind both platinum and copper, its chart is (unlike gold‘s) bullish. Remember, the most bullish thing prices can do, is to rise. Not to rebound and fizzle out, only to rebound and fizzle out again, the way we see in gold as it keeps offering both bearish and bullish signs.

Oil

oil

Oil keeps trading in a bullish fashion, and the 3-day long correction hasn‘t broken even Feb local lows yet. While we‘re for increased volatility in here, the uptrend remains strong, and volume currently doesn‘t support a deep correction theory. Just look how little have the retreating daily indicators achieved when it comes to the underlying price move? That‘s a reflection of a strong uptrend, which would be however best advised to resume sooner rather than later so as not to lose the technical advantage.

Summary

Stock bulls are on a recovery path, and new all-time highs are basically a question of when the tech would step up to the plate again. Despite today‘s premarket weakness reaching well below the 3,870 level, the S&P 500 internals and credit markets performance (including foreign bonds) doesn‘t indicate that much downside potential currently. This correction‘s shape is largely in, and I mean the price downside – patience though will be needed before seeing new highs.

Gold remains stuck in its support zone, unable to rally, not breaking down. The copper advantage of yesterday is lost for today, but seeing it and silver recover would be the most likely outcome once the immediate threat of rising Treasury yields retreats more noticeably. Gold is far from out of the woods, and flirting with the support level without a convincing rebound, is dangerous to the bulls.

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Monica Kingsley 2 months ago Author's comment

Quick update:

Morning selling pressure appears abating, stocks returning above 3,850, HYG apparently refusing to decline more, and if XLK keeps above 130 today, we're still in that now again shallow correction that I talked before Feb 24.

Gold refused to decline below $1,700 - but needs to clear off the low $1,720s (yeah, that's another $10 today still to go if I am to like the short-term bullish turn). Still nothing to call home about in the metals. The dollar better tank again over the coming days... Gold and silver haven't yet lost the recovery momentum, and the $1,730s and above $26.50 are attainable still. The bull market in gold needs a rebound off strong support, otherwise it's becoming suspect.