Gold/Silver: The Bond Breakdown

Finally, a bit of excitement in the precious metals markets this week, with Silver one of the best-performing commodities right behind Copper, Coffee, Corn, and Lumber, giving further validation to this "Commodities Super-Cycle." Gold also broke through a critical psychological resistance level of $1800/oz while extending the rally on Friday when the payroll data added just 266,000 jobs, a far cry from the million expected.

The miss in the April jobs reading will spark chatter on wall-street that there are new challenges to the economic recovery. That will lead to further monetary debasement and increased debt discussions, often an ideal mix for the precious metals group. We at Blue Line Futures frequently are quoted saying that "the backbone of a Gold rally hinges on the direction of the U.S. Dollar and U.S. Treasury Notes and Bonds." That is why we created the "FX Rundown" covering the Dollar and other key currencies and now have launched the "Bond Breakdown." Remember, if you can get the Bonds right and get the Dollar right, you can get many markets right. Here is the link to a two-week trial of the Bond Breakdown, where you will receive actionable trade ideas. You can register here Bond Breakdown.

Focusing back to Gold and Silver, the next likely target I suspect in Gold will be a test of the 200 DMA at $1853/oz. A push to this level will most likely attract new participants into the market along with the market neutralizing the bearish trend the market has been in since reaching its "All-time high" last August. Silver had entered a "Value-Zone" sub $24/oz in March that many of you were able to capitalize on with 1000 oz futures, while this week, we had recommended to many of our clients purchasing the September Silver $29-$31 call spreads. If you did not receive the new edition of our free "Gold Trends Macro Book," it has been updated with silver slides. This monthly updated booklet will provide you with all the quantitative analyses of the precious metal's markets. You can request yours here: Free Gold Trends Macro Book.

Good luck and good trading,

Phillip Streible

Chief Market Strategist


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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.

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