Standard Research

Enjoy our market updates, in-house videos, media interviews, data analysis and more.

Please visit our Premium Research section for daily actionable analysis, including updated fundamentals, technicals, actionable bias, and proprietary tradable levels.

Blue Line Futures Research

Gold/Silver: Two critical levels to watch

Posted: June 19, 2022, 4:49 p.m.

Major indices sustained significant damage this week, confirming a global economic recession is coming, along with more central bank surprises. Wednesday, investors initially felt relief from the 75 bps rate hike by the Fed under the assumption they had made the correct policy move by trying to get ahead of the rising rate of inflation. Unfortunately, this assumption is wrong, and the Fed is committing a major policy mistake by tightening into a slowing economic growth environment. Traders know this, and panic had set in on Thursday due to emergency actions by the Swiss National Bank. The SNB had surprised the market with its first rate hike in 15 years, which triggered a chain reaction causing European bond yields to spike, leaving Europe deep in recessionary territory. My takeaway is to expect more "emergency" moves by central bankers, tightening global liquidity, and significant volatility from equities. 

Recapping last week's article, I believe that the Fed and other central bank's actions will result in a "Hard Landing" where the Fed raises multiple times as economic growth deteriorates into "crash mode." The sell-off in Equities hits the consumer so hard that the Fed needs to pivot back to dovish and cut rates to undo the damage done. 

Daily Gold Chart

image.png

Moving on to the markets you are watching, these actions should support Gold with $1800/oz as critical support. I believe Gold will maintain a "flight to safety" status as risk assets remain liquidated. Treasury Yields will eventually level off, and Gold will receive another lift-off. To learn more about trading Gold, we completed a new educational guide that answers your questions on how to transfer your current investing skills into trading "real assets," such as the 10 oz Gold futures contract. You can request yours here: Trade Metals, Transition your Experience Book.

 Daily Silver Chart

image.png

Silver, I have a slightly different view as its sister metal Copper has dropped below $4 for the first time this year. Copper and Silver are closely correlated with industrial demand weakness from Chinese lockdowns and supply chain constraints. My suggestion on Silver is to monitor any corrections below $21/oz as buying opportunities while adding to any material strength on a closing basis above $22.50/oz. If Silver can break above $22.50/oz, a "Double Bottom" has likely been made, and a new bull market has begun. To help you identify different technical analysis formations, I went back through 20 years of my trading strategies to create a Free New "5-Step Technical Analysis Guide to Gold but can easily apply to Silver." The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here:  5-Step Technical Analysis Guide to Gold.



Sign up for a 14-day, no-obligation free trial of our proprietary research with actionable ideas!
Free Trial Subscribe to our YouTube Channel
Email [email protected] or call 312-278-0500 with any questions -- our trade desk is here to help with anything on the board!

Futures trading involves a 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 Silver Central Banks

Like this post? Share it below:


Back to Insights