Gold and silver exhibited some follow through from the late surge higher last week. However both June gold and July silver futures finished well off session highs which in my view keeps this very recent uptrend suspect for any further advances. A new North Korean missile launch and global cyber attacks over the weekend pushed June gold up to 1237.4 in overnight trading. This surpassed last week’s high but the rally fizzled later in Monday’s session. June gold finished up $2.40 to settle at 1230.1. July silver experienced a more defined rally making a daily high up at 16.81, but like gold weakened into the close settling at 16.60. Still though, silver finished the session up .20 cents posting its highest close since May 2nd. What most likely impeded the early morning rally was the continued push higher in indices, with the Dow, S&P, and Nasdaq surging higher throughout the session. We have noted that investors continue to pour into equities as the risk on vibe continues off of strong earnings and decent economic data. Despite the recent slide in the Dollar and six dollar bounce in crude oil, gold and silver haven’t seen any consistent buying or conviction from investors to continuously buy dips. This weekends missile launch in North Korea has been seemingly shrugged off by investors so far. In Friday’s commitment of traders report, the non- commercial and non- reportable trader position has a net long of 157,351 contracts which showed a decline of 42,891 contracts in the last week alone. For silver, the non-commercial and non-reportable position comes in this week with a net long of 71.091 contracts. This is a decrease of 16,945 long positions last week. In order for gold and silver prices to continue to rally, geo-political issues and weak economic data need to re-emerge in order for spot gold and silver to trade above key moving averages and challenge previous highs.
Technical levels come in as follows for the remainder of this week. For June gold, support sits down at 1215.7 and with a close under 1203.7 is next. Resistance is up at 1238.7 and then up at 1248.9. For July silver, support is down at 16.15 and then down at 15.90. Resistance is up at 16.56 and then up at 16.72.
Moving Averages Gold (GCM7)/Silver (SIN7)
50-1247.6/17.53
100-1228.1/17.43
200-1257.9/17.99
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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