Gold/Silver/Commodities: Is this breakout for real?

Posted: April 16, 2021, 7:03 p.m.

Is this the breakout we have been looking for, and what confirms a breakout? Those have been the two most asked questions this week from clients.

Daily S&P 500 

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Out of the 40 commodities that we actively track and trade, only a handful finished the week lower. Two big standouts were the Dollar slipping .65% and the Vix falling 5.5%. That tells me two things, first, any hard asset should be rising in value, and secondly, the level of complacency in the equity markets is beginning to make me nervous. The rising geopolitical tensions between multiple countries justify looking at inexpensive put options on U.S. equities for the latter half of the year. Isn't the old saying "buy insurance when you don't need it, not when you have to have it." In addition to rising geopolitics, we recognize that the second half will have challenges on the economic data matching the unprecedented trajectory since the reopening.  If you would like to be up to date on the developments of our specific strategies in the futures and commodities markets, please register for a Free two-week trial by clicking on the link here: The Blue Line Express Two-Week Free Trial Sign up

Gold and Silver are extending their run and have received an adrenaline shot on a Reuters report (confirmed by other sources) that China will now allow domestic international banks to import large amounts of Gold. China is the world's number one consumer of Gold, but the PBOC only allows just enough to meet the demand to be imported. Amid a steadfast recovery, demand is surging, and China is raising its quota to the most significant level since 2019. These are the much-needed tailwinds the metals markets were needing.

Daily Gold Chart

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Good luck and good trading,

 

Phillip Streible

Chief Market Strategist

312-858-7303

 

[email protected]

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