Thursday's Market Minute: Metals Shine As Equities Climb

Gold Bugs have been enjoying a bullish run since late 2018, and a new leg up may be developing. Gold futures moved into new yearly highs above 1,620 in the premarket, pushing into their highest prices since early 2013.

The yellow metal’s technicals also are showing strength, logging a bullish MACD crossover coupled with the RSI moving into the overbought area. But /GC isn’t the only metal commodity on the move. Silver also saw a sharp surge upward on Tuesday after diverging from Gold and getting stuck in a downward channel since early January, suggesting the typically tight positive correlation between /SI and /GC may be returning. Palladium continues an epic run upward into new all-time highs, smashing through double-top resistance near 2,400 and now up over 100% since the yearly lows in May.

However, not all is well across this sector. Copper futures recently got trounced as coronavirus raised concerns about global industrial demand. The /HG contract has rebounded somewhat, but is still down about 9% from its January highs near 2.88. Additionally, equities climbed upward in tandem with Gold, with the /ES and /NQ logging new all-time highs this week and implying another possible correlation breakdown in the typically inverse relationship between risk-on and risk-off assets. This resilience in Gold amid rising equities suggests there could be many risks still facing the stock market.

Image by Matthias Wewering from Pixabay