Precious Metals ended the week on a sour note after the monthly employment data showed 339,000 jobs were created in May, crushing the expectations of 193,000. The reaction produced a bid in the U.S. Dollar, Treasury Yields, U.S. Equities, and Energies. However, looking back on the week, both Gold and Silver both added 2% giving us an indication that a bottom is forming from the recent selloff. Platinum futures dipped below $1000/oz for the first time in two months, and Copper futures received a "lift-off" from positive manufacturing data out of China. I expect Precious Metals to continue its recovery next week if we can get a sustained rally over $2008 on Gold and $24.17 on Silver.
Daily Gold Chart
Since challenging all-time highs in early May, Gold futures have traded lower for three weeks before running into critical support at $1950/oz. We remain optimistic that a near-term bottom is in place and that overhead resistance lands at two levels. We will want to watch the psychological $2000 level and ultimately $2008 as your breakout level. Any close over $2008 should trigger a short-covering rally. Remember, every bull market begins with a short-covering rally.
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Daily Silver Chart
Silver's recovery this week was fueled by a local top in the U.S. Dollar and a reversal in the Copper market. The 50% retracement level on the daily chart near $23 proved an excellent opportunity to add to core positions using the December 1000 oz Silver contract. Tightness in the physical markets, a decline in mining supply, and solar and EV demand should offset any potential for prices to decline further. Over the next 18-24 months, we expect Copper to make new all-time highs and Silver to break $35/oz.
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