Metals facing resistance
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Featuring views and opinions written by market professionals, not staff journalists.
Commodities, in general, continue to sell off, with crude oil trading under $100 today after topping at $130 last week. Traders may be familiar with the concept of reversion to the mean; in the same way a rubber band snaps back after stretching too far, so can, and will, asset prices. The drop in general commodities is likely a welcome occurrence to prevent a global recession. China reported a major COVID-related lockdown yesterday, which may be part of the reason for the continued selloff in the sector.
Precious metals haven’t been spared any of the selling. Gold trades back to its initial breakout level of $1915-$1925 as of this writing. Gold found resistance at $1965 yesterday intraday. Silver followed suit and is trading lower today after encountering resistance at $25.40 yesterday, as suggested. Platinum bulls will be looking to hold the $1000 level for signs of a bottom.
With the 10-year yield over 2% this morning and dollar strength seemingly waning, equities futures are pointing to a higher open; perhaps a sign that contrarian stocks bulls are soon to be rewarded? That said: Traders should continue to be on the lookout for volatility as we head into the upcoming FOMC meeting.