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Precious Metals and the U.S. Dollar (DXY):I keep thinking that the 3% plunge in Gold (GLD) and the near 5% plunge in Silver (SLV) are a liquidation event into the end of the quarter in reaction to last week's parabolic spike in 10-year YIELD from 4.93% to 5.23%. A risk-off reflex action ahead of the start of Q4...That said, however, I also think that Wednesday's PCE Inflation report for August is the next significant headline risk (reward) for precious metals. If PCE comes in cooler than expected, then YIELD and the Dollar should moderate and the PMs should catch a bid.
As of my writing this update just before 2PM on Wednesday, the pressure remains down in the metals complex. So, let’s look at each of the 3 charts individually.As we know, we have been trying to determine if this pullback is a 2nd wave (or even a b-wave when it comes to silver and gold), or whether we are going to see levels lower than seen this past summer before the next rally begins. And, the market has not yet made that clear.
Today the market moved higher only to move back lower in the afternoon session. That move up and then back down left us with three waves off of yesterday's low, so we still do not have confirmation that a bottom is in place for all of wave b. The move down off of today's high also counts best as three waves on the smaller timeframe, which does not yet confirm a local top either.This leaves us trading in a bit of no-man's-land on the smaller timeframes.
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