Looking to the Futures

Precious metals pushed higher to start the week after the dollar showed weakness. Monetary policy to boost liquidity has put negative pressure on the dollar, giving support to precious metals. Global economic news was mixed to start the week. Strong central bank demand in China for Gold and Silver has provided support for prices.

The dollar saw significant selling pressure yesterday as the Fed began purchasing $40 billion a month in T-Bills starting last Friday in an attempt to boost liquidity in the financial system. The dollar dropped to a new low after Fed Governor Stephan Miran stated the Fed's policy stance may be too restrictive on the economy. 

Markets are expecting President Trump to appoint a dovish Fed Chair in early 2026, which is putting additional pressure on the dollar. National Economic Council Director Kevin Hassett is seen as the front runner to become the next Fed Chair, according to Bloomberg.

Global economic news was mixed to start the week with the US Dec Empire manufacturing survey of general business conditions dropping -22.6 points to -3.9, well below expectations of 10.0. The US Dec NAHB housing market index increased +1 to 39, in line with expectations. Eurozone Oct industrial production increased +0.8% m/m, meeting expectations and showing the biggest increase in five months. 

The yen increased against the dollar with Japan Q4 Tankan Large Manufacturing Outlook Survey rising +3 to 15, beating the expectations of 12. Japan Oct tertiary industry index rose +0.9% m/m, higher than the expected +0.2% m/m increase. Markets are pricing in a 95% chance of a BOJ rate hike at the next policy meeting on Friday. 

Economic news was unexpectedly slow with Nov industrial production dropping to 4.8% y/y, missing the expected increase to +5.0% y/y. China Nov retail sales increased +1.3% y/y, missing the expectations of +2.9% y/y. China's new home prices fell 0.39% m/m, the 30^th consecutive month of declines. 

Central Bank demand for gold is bullish for prices with China's PBOC reserves increasing +30,000 ounces to 74.1 million troy ounces in November. Silber inventories in warehouses linked to the Shanghai Futures Exchange on November 21 dropped to 519,000 kilograms, their lowest levels in 10 years.

Looking at the daily chart for the Silver Futures March (/SIH26) contract we can see the rebound back to Friday’s open on average volume. The 20-Day, 50-Day, and 200-Day Simple Moving Average are still trending upward despite short upticks in volatility over the past two months. 

Trading Central’s Daily Technical Analysis has support levels found at 60.210 and 58.533 with resistance levels at 64.190 and 66.672.

According to the CFTC Commitment of Traders report released November 25^th managed money traders have decreased their long position by -914 contracts and increased their short position by +259 contracts. Managed money traders are net long 19,061 contracts. 

The 14-Day Relative Strength Index at 70.83% indicates the contract is moving into overbought territory.

20-Day SMA                    56.632

50-Day SMA                    52.521

200-Day SMA                  41.344

14-Day RSI                      70.83%

Implied Volatility             41.17%

Last Trading Day-Futures: December currencies

3-and 6-month T-bills 

Average Workweek 8:30 AM ET

Avg. Hourly Earnings 8:30 AM ET

Building Permits 8:30 AM ET

Business Inventories 10:00 AM ET

Housing Starts 8:30 AM ET

Nonfarm Payrolls 8:30 AM ET

Nonfarm Private Payrolls 8:30 AM ET

Retail Sales 8:30 AM ET

Retail Sales ex-auto 8:30 AM ET

S&P Global U.S. Manufacturing PMI - Prelim 9:45 AM ET

S&P Global U.S. Services PMI - Prelim 9:45 AM ET

Unemployment Rate 8:30 AM ET

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