Gold prices fell this week but managed to hold and settle above the key 200 day moving average. Geo-political uncertainties were one of the reasons that prices didn’t slip much further along with a slightly weaker reading on first quarter GDP released this morning. While June gold posted modest losses of $20.80 for the week, Silver was the big loser posting a loss of 60 cents or 4 percent weekly loss as recent all -time record long positions as of early April continue to be liquidated. Next week will be a busy week for investors as the Fed begins a two day meeting on Tuesday with a policy announcement on Wednesday which is followed by the monthly non-farm payrolls Friday. Geo-political events will be followed of course with the French Presidential election next weekend. First and foremost though aside from anything else entering into the market it will be the Fed’s purview of the economy and on rates that will ultimately drive prices and therefore trend going forward. The market has discounted any rate hike in May and will wait for the Fed’s commentary on whether June is viable for the years second rate hike. its important to note that May has been the worst performing month for gold over the last five years, so in my opinion, gold will have to be fed dovish commentary from the Fed, at best a tepid jobs report next Friday, and for geo-political rhetoric and saber rattling to remain in the news cycle. It appears that Congress avoided a government shutdown by coming to a deal. If one were to play anything to the long side at this point as far as metals are concerned I would consider buying a July Silver 19.00 call for 8 cents or better. those wanting gold, look to buy the June Gold 1300-1330 call spread for 3 points or $300.00 plus all commissions and fees.
My weekly swing numbers for both June Gold and July Silver come in as follows for next week. For June Gold, support is down at 1259.2 and below there at 1250.3. Resistance is up at 1278.5 and then up at 1288.9. For July Silver support is down at 1695.2 and then down at 1664.6. Resistance is up at 1779.7 and then up at 1833.6.
For those interested I hold a weekly grain webinar each Thursday at 3pm. It is free for anyone who wants to sign up and link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.
Sean Lusk
Director Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604