RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

AUG GOLD

Today’s clear recovery above 23-Jun’s 1795.6 high and our short-term risk parameter discussed in 29-Jun’s Technical Webcast confirms a bullish divergence in momentum that defines last week’s 1750.1 low as one of developing importance and possibly the end of the decline from 01-Jun’s 1919.2 high.  Per such, we’re defining 1750 as our new short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can be objectively based and managed.

From a longer-term perspective, the compelling thing about this relatively smaller-degree momentum failure is that it stems from the lower-quarter of the past 11 months’ range shown in the weekly log chart below.  As this entire 2089-to-1673-range is considered a corrective/consolidative event until negated by a break below 08-Mar’s 1673.3 key low that ultimately warns of a resumption of the secular bull trend that preceded it, it is within the bounds of possibility that the secular bull trend could be resuming from last week’s 1750.1 low.

These issues considered and after neutralizing cautious bearish exposure on the recovery above 1795.6, traders are advised to return to a cautious bullish policy from current at-the-market levels (1810) OB with a failure below 1750 negating this call and warranting its cover.  In lieu of such sub-1750 levels, further and possibly accelerated gains should not surprise, including a possible resumption of the secular bull trend to new all-time highs above 2089.

SEP SILVER

By and large, the technical construct of the silver market is basically the same as that detailed above in gold, except for the fact that May-Jun’s relapse attempt only made it to the middle of its 11-month range rather than its lower-quarter.  Nonetheless, the past few days’ recovery above our short-term risk parameter defined by 25-Jun’s 26.38 high confirms the same type of bullish divergence in momentum as that discussed above in gold, defining last week’s 25.58 high as one of developing importance and our new short-term risk parameter from which non-bearish decisions like short-covers can be objectively based and managed.

The problem and challenge posed by silver is that, unlike gold’s mo failure from the lower-quarter of its 11-month range where the risk/reward merits of a bullish punt are much preferred, the daily (above) and weekly (below) log scale charts of silver show May-Jun’s setback attempt only retracing to the middle of the middle-half bowels of its 11-month range where the risk/reward metrics of a bullish punts are muted.  Last week’s 25.58 low serves as an equally important and objective risk parameter that, until broken, could likewise see a resumption of the secular bull trend to new highs above 07Aug20’s 29.915 high.  But by its continued residence within the middle-half of this range, we believe the odds of aimless whipsaw risk must still be approached as high.

These issues considered, a neutral-to-cautiously-bullish policy and exposure are advised with a failure below 25.58 negating this call and warranting its cover amidst further lateral-to-lower range-center chop.  In lieu of such sub-25.58 weakness however, further and possibly accelerated gains should not surprise either.

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