For the gold and silver bulls this calendar year the Trump administration has been the gift that keeps on giving in my opinion as the market continues to hold yearly gains. I have been mentioning in previous posts here that for Gold and Silver to reverse recent downward price direction, that the precious metal sector would need a continuation of being fed bullish news. Whether it was in the form of physical demand or a geo-political event, the market needed something to stem the tide of lower price action that looked unrelenting as of last week. Recent developments at the White House concerning the President’s handling of the James Comey firing and very recent reports of the President potentially obstructing the investigation into the former National Security Advisor over Russian ties has finally had an effect in the stock market. As of this post, the stock market has suffered major losses posting its biggest percentage down day for 2017. Consequently fear gauges like the VIX and precious metal sector are soaring. Gold and Silver have posted impressive gains. June gold futures settled up $22.30 to settle at 1258.7. Today’s settlement pushed gold above the 50, 100, and 200 day moving average which could ignite more buying from technicians in my view. July silver posted a 16 cent gain to close at 1690.5 after briefly trading above 17.00 earlier in the session. The U.S. Dollar also moved lower and remains under pressure as talk that a June rate hike that all but seemed certain from the last FOMC meeting a few weeks prior is now up in the air. In fact the Fed Fund Futures rate curve has flattened dramatically as increased bets of no rate hike have increased. Clearly its no secret to many that with all the leaking from White House and Trump administration officials that there is disarray among the Presidents closest advisors. As a result there has been a lot of noise in the market about impeachment proceedings coming down the road. Its important to note that the market trades fear before fact and with Congress ordering further probes into the Comey-Trump-Russian investigation it appears meaningful legislation on health care, taxes, and trade will shift to the back seat for the foreseeable future potentially creating further uncertainty among the investment community. Its this uncertainty that in my view should prevent any major setbacks in price for both gold and silver going forward.
Daily Swing #s GCM7 (June Gold) and SIN7 (July Silver) for 5/18/17
R2-1276.0/1717.8
R1-1267.3/1704.1
Pivot- 1251.8/1689.8
S1-1243.1/1676.1
S2-1227.6/1661.8
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