Weekly Update (Week of 5/26/2025)

   

Weekly Update: May 26th, 2025

Trading Portfolio: (It is a link to Google Sheets)

Hey all - happy MDW. Our gold trade from last week has paid off big time so far and some great trade opps have developed for us that I have on watch around Oil and Platinum.

Nothing in this blog, except graph images, has been generated by AI - all thoughts and analyses are my own (not financial advice).

General Major News/Economic Developments

• US Tariff policy escalations with the EU and Apple products
• Moderating US inflation, weaker retail sales, and slowing consumer spending are putting pressure on the Fed's rate plans.

Metals

Developments/News

Gold

The move over the last week has paid off brilliantly. We are up 109 points from entry (a gain of $10,940 per /GC contract!), and nearing our supply zone target of 3385.5. If we had multiple contracts, I'd be more than happy to peel some off and lock in some profits here, but let us hold for our target. Strength is continuing, but keep an eye on the RSI going overbought. Moving stop loss up to 3300 now (50 points in profit).

News Updates:

The Moody's downgrade of the US credit rating and the rising national financial debt drove a flock to safe haven assets like gold this week, seeing a rally in gold and silver spot. Secondly, Trump's tarrif threats (a whopping 50% on EU imports and 25% on iPhones not made in the US) continue to fuel market uncertainty. Finally, the dollar kept selling off to a three week low, all of which driving the appeal for gold. The macro story supports us holding our trade. 

Silver

Strength has followed that of gold, but silver is lagging behind a bit. I believe we will almost certainly reach into the supply zone at 34.29 to grab liquidity and potentially see a dip back down into this gray box area before seeing a pop to new highs. But let's see. Gold is the better metal to be long right now, so no position here for me.

News Updates:

The macro drivers are the same as those for gold (tariffs, US downgrade, lower dollar, trade tensions), but trade tensions and tariffs also put a hamper on the markets for silver's industrial uses, hence the slower rise as compared to gold. 

Platinum

I have kept platinum on the back burner for quite some time as it was just bouncing from my demand level over and over again. It has finally gone up and reached into a supply zone for us to work a short off of with great risk/reward. I am taking a 3 contract position short at 1090.20 and have a plan to retry the short at 1114.70 (no order out, but keeping a close eye). Stop loss is placed at 1105.90 and the soft target I have in mind is 1070. I am being cognizant that this may just be a quick scalp trade if we see continued strength in the rest of the metals, but the knee jerk reaction down at our level (can be seen on a 4h chart), tells me we should see at least a bit of downside before another leg higher. 

News Updates:

Apart from the general macro trends in precious metals mentioned with gold and silver above, there are a few headwinds for platinum that I have been looking at. Firstly, industrial use of plat is projected to fall by about 15% in 2025 (driven by a drop in glass manufacturing demand, projected to go down -58%) and a 6% drop in chemical sector demand (source). Tariffs have also introduced new uncertainties in the automotive use case, dampening plat use in catalytic converters. It's general underperformance against silver/gold also has me a touch more bearish.

Copper

Although we have reached into a supply zone (4.8435), I have not seen the hard reaction to the downside I typically wait for to consider entering a position. There is another supply zone right above (4.9115) which may provide more liquidity to short side traders and a better risk-reward, so we will evaluate a position if and when we reach it.

News Updates:

According to Reuters, the US saw "unusual shipments of 10,000 tons and 4,500 tons from Germany and Spain in March and April, respectively".  These are countries that don't typically export to the USA. Looking a bit deeper, we can see that COMEX copper (USA traded) has been trading at a premium to LSE copper (EU traded). Traders are likely enjoying the benefits of the arbitrage opportunity by landing the more attractively priced US-settled COMEX copper. The tariff anticipations have also spurred a surge in US copper inventories, which could also exert downwards pressure on price, closing the gap. I do like the short idea but it's a good idea to wait for the higher supply and better risk-reward.

Agriculture

Developments/News

Coffee

We broke below support pretty strongly with a bump up in volume and a strong candle down, followed by the hammer bar we are seeing now. Not too much is happening in terms of a technical setup just yet.

News Updates:

As a result of tariffs, Paramount Coffee Company, which is a major US roaster, raised prices, adding pressure to an already strained supply chain. The USDA projects a 4% increase in year over year production but ending stocks are projected to fall by 6.6% to a 25 year low (supply conditions are tight!). Labor shortages and changing weather patterns are not helping the case at all. Global consumer demand remains strong, even amid these struggles. 

Wheat 

Wheat prices saw a pretty sharp rebound from the highlighted support from last week, reaching all the way back up to the 200-day EMA. Trend is still headed lower with lower lows being put in (and lower highs for the most part).

News Updates:

Traders changed positioning a bit this week with a decrease of 18,000 contracts in net short positions in Chicago wheat futures. This is a shift from the previously near seven-year high in net short positions earlier this month, indicating traders are beginning to cover their short positions here. Globally, parts of Russia and Europe have raised concerns about wheat crop yields due to adverse weather conditions in key production regions. 

Energy

Developments/News

Crude Oil (WTI)

Crude saw a jump back to near 64 for s short while before trailing down towards 60 once again. We didn't quite get back up to 65 to initiate a short position and I don't want to chase it here, so I am watching closely early this week to see if weakness persists and if we get an opportunity to initiate at a good risk-reward. I have a limit order out at 62.70 for 2 contracts of /CL short, with stop loss at 64.19 and a target of 55.

News Updates:

OPEC+ is considering a significant production increase of 411,000 barrels per day in July 2025, leading to a well-supplied market (bearish). Commercial US crude inventories have also increased to their highest point since July 2024, adding downward pressure on price. The IEA (international energy agency) projects a slowdown in global oil demand growth due to economic headwinds, exacerbating oversupply risk. The weaker dollar is a bullish indicator which could provide short term support to prices, so let's see if we get filled. 

Crude Oil (Brent)

From a technical standpoint, this still looks very similar to WTI, although Brent is a bit weaker.

News Updates:

The macro story remains mostly the same as the story for WTI. 

Footnotes

Sources include Thinkorswim, Tradingview, Barchart, Wall Street Journal, Financial Times, Investing.com, and Metals Daily.