Gold continued its ascent Tuesday posting solid gains to end the month. Gold has finished lower for the month of May the last five years but today’s rally broke that streak showing modest gains month on month of just over $3.00. What is more impressive is that gold has rallied over $57.00 since making a monthly low of 1214.3 on May 9th. Geo-political chaos in Washington, North Korea, and Europe can be cited for the mass rebound in price as investors have poured back in both gold and silver as safe haven investment. Today’s rally of $9.70 basis August futures and the rally from mid-month comes in the face of an impending rate hike later this June by the FOMC and the fact that equities remain firm and seem poised to make new highs. What has aided the gold bulls though has been a weaker greenback for most of May. Commentary by the Fed in their “minutes” release last week signaled that a rate hike was coming, but for most investors was already priced in. However the near term focus will be centered on Friday’s job report and any surprises versus expectations there. Although we have many Fed Governors speaking in the next few days, it will be the job data that will determine market direction into the weekend. The non-farm payroll number is forecasted to come in around 210,000.
Technical’s for the remainder of the week come in as follows. For August gold, support comes in at 1257.4 and with a close below 1243.4. Resistance comes in at 1278.9, and with a close over 1286.4. For July silver, support comes in at 17.18, and then down at 16.98. Resistance comes in at 17.52 and then at 17.72.
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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