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Gold, Silver Prices Hold Ground Ahead of Inflation Data

Published 08/07/2023, 03:19 AM
Updated 07/09/2023, 06:31 AM

Last week was a very heavy week filled with all kinds of data:

  • Fitch Downgrade
  • Earnings: Amazon.com Inc (NASDAQ:AMZN) up Apple (NASDAQ:AAPL) down
  • Jobs Report-Wages rising
  • Treasury Yields higher-at October 2022 highs
  • Record temperatures around the globe-including winter in S. America
  • Oil prices rise 6 weeks in a row

The metals are holding their ground. The first chart shows gold in contango.

Gold FUTS

That is when the futures price of a commodity is higher than the spot price.

Contango occurs when an asset's price is expected to rise over time.

Gold spot futures closed right around $1957 per ounce.

The GLD (NYSE:GLD) ETF chart shows it in a caution phase under the 50-DMA.

GLD Daily Chart

The leadership indicator shows GLD slightly outperforming the SPY or benchmark. SPY closed down on the week from $456.92 down to $447, or about 2.2% lower.

Gold closed down from $181.86 to $180.20, or about 1.1% lower. Stronger than the SPY on a percentage basis.

GLD’s momentum on the Real Motion indicator turned up some, yet remains in a bearish divergence to price.

SPY’s momentum also fell and sits just below the 50-DMA (the first time it broke that momentum line since March), while the price is above that is a bearish divergence in momentum.

The point is that if SPY falters more from here and GLD rises, this will confirm the first indication of risk-off, something to watch for the coming week.

Silver is still underperforming gold and is also in contango.

Silver Futures Daily Chart

Silver futures closed under the 50-daily moving average but over the 200-DMA. $23.50-24.00 gives us a good range to start from this week.

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Above $24, and we would be encouraged to think silver has more upside. And in the case of the next chart:

Silver Daily Chart

We would think that iShares Silver Trust (NYSE:SLV) could gain leadership against gold, which right now on the leadership indicator has it underperforming.

If this is the case, it would have a positive impact on both metals and could indicate an increase in inflation.

SLV, the ETF like the silver futures, closed under the 50-DMA and is in a warning phase.

The momentum indicator has silver waning in momentum, so the decision on the next price move for silver could be evident as quickly as this week.

ETF Summary

  • S&P 500 (SPY) 450 pivotal 440 support at the 50-DMA
  • Russell 2000 (IWM) 191 is the 23-month holy grail 193 July 6-month range hi
  • Dow (DIA) 35,000 support
  • Nasdaq (QQQ) 365-380 range
  • Regional banks (KRE) Back over 48 looks ok and under 44 not so much
  • Semiconductors (SMH) 161 now more in the rear view-150 in focus
  • Transportation (IYT) July 6-month calendar range high at 259.30-closed below it-caution
  • Biotechnology (IBB) Compression between 123-130
  • Retail (XRT) 66-67.40 short-term range

Latest comments

Good quick overview of XAU & XAG. I'm also watching the seasonals.
md,kobir
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