The bulls are dropping the US dollar like it's hot – and risk assets worldwide love it!
Few areas are enjoying the newfound dollar weakness quite like the metals space. It’s not just precious or base metals catching higher. It’s both.
So if you shelved those shiny rocks months ago, it’s time to pull them out and take a look.
Copper futures are up first:
Dr. Copper went out with a bang last week, posting its largest single-day return since 2009. We call these types of strong directional moves momentum thrusts.
They often indicate either the exhaustion of an ongoing trend or the initiation of a new trend. Our money is on the latter when it comes to copper.
Yesterday it took out its summer pivot highs. Those former highs are a great level to define our risk.
I like copper futures long if and only if it’s above 3.70, targeting the shelf of former lows near 4.00.
Next, we have gold:
This shiny yellow rock is back in the box after failing to break down from a multi-year top.
I prefer when price moves swiftly in the direction of the breakout. The hesitation in recent months indicated an underlying demand for gold futures.
That demand has now absorbed overhead supply as price rips higher.
We can measure our risk against the October pivot highs of 1,738. It’s well above that level, so if you’re not already long you can trade small or buy weakness back toward those pivot highs.
Remember, gold is back within its prior range. It could get messy. But as long as it’s above 1,738, I like it long toward the all-time highs of 2,088.
Silver is also reclaiming a critical level:
It’s a similar situation for gold’s crazy cousin. Silver is breaking back into a box that’s full of price memory.
It doesn’t mean we won’t see a face-ripping rally in the coming weeks or months, but it wouldn’t surprise me if a move didn’t materialize, either.
Regardless, you can’t be long silver futures below the shelf of former lows at 21.50. That’s my line in the sand. If it’s above there, I like it long back toward the March highs of 27.50.
Last but not least, we have platinum futures:
The platinum chart isn’t as clean as gold or silver. But you can’t ignore the fresh eight-month highs as it reclaims a critical level of former resistance.
Platinum futures are a buy if and only if they’re above 1,045, targeting 1,340.
I can’t remember when I liked buying copper, gold, silver, and platinum! That alone is information! It’s simple.
The dollar rally is on the rocks, so our best bet is to short the dollar and buy rocks!
When was the last time you heard that?
Stay tuned!
COT Heatmap
Due to Veteran's Day, the Commodity Futures Trading Commission will release the Commitment of Traders Report on Monday, November 14.
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