August Comex Gold futures posted a strong rally early Tuesday, but heavy selling pressure at a major Fibonacci level helped weaken the market into the close. Although gold closed higher for the session, the move had the appearance of a reversal top. This could trigger a follow-through break today. A reversal to the upside in the oversold U.S. Dollar could trigger further selling pressure in gold today.
The silver markets did very little during the session on Tuesday as you can see, suggesting that the markets may be a bit quiet between now and nonfarm payroll numbers on Thursday. On top of that, we are sitting just at significant support but have not been able to break higher. Because of this, we are not overly impressed by the movement over the last several sessions, and do in fact need to see an impulsive candle to the upside in order to start buying. However, we certainly wouldn’t short this market at as it has been fairly strong as of late.
The light sweet crude market went back and forth during the Tuesday session, essentially settling on a relatively benign candle. That being the case, we feel that the market is trying to find a bit of support in this general vicinity, but with nonfarm payroll numbers coming out on Thursday this week, it’s very likely that the markets will too much between now and then. Because of this, we certainly wouldn’t sell this market, especially considering how supportive it has looked. On the other hand, we are more than willing to buy on a move higher, but don’t necessarily expect that to happen anytime soon. However, given enough time we do think that the market ultimately tries to test the $107.50 level again, and then possibly as high as $110 given enough time, as the market certainly seems to be fairly buoyant overall.
DAY’S RANGE FOR 2nd JULY