Daily Gold Report

Sean LuskGeneral Commentary

Gold futures have found a temporary bottom this week so far on two fronts.First the news cycle is awash with political headlines concerning the Trump administration election ties with Russia and secondly ahead of a two day Congressional testimony on the economy from Fed Chair Janet Yellen. Gold’s bounce though has been weak as August futures are only up $5.00 for the week while silver has seen a rally of just .32 cents. August Gold closed today at 1215.6 while September silver settled at 15.74. While the U.S. Dollar remains weak against outside currencies like the Euro, gold’s biggest nemesis has been the elevated levels of the stock indices that in my view have prevented a more sustained bounce in gold and silver. Non-commercial and non-reportable funds in gold have liquidated over 110K contracts since the early June highs at 1397 and come into this week long just 105K contracts, the weakest long in the market since February 2016. This coincides with a price break of 93.00 in just over one month. For Silver, longs have liquidated over 65K contracts over the same time frame and now sit with the weakest long since 2015 at around 37K contracts long. It appears for now that due to the Yellen testimony and the enormity of potential comments on short term rates, that the uncertainty would offer short covering and bargain hunting at these levels. In my view from a demand standpoint, the late July/August time frame is the best preforming time of year to be long metals due to increased demand from Asia, specifically from India. This break in price may entice some buying from that sector ahead of Indian wedding season as demand there has been insatiable in years past.

Technical levels for the remainder of the week come in as follows. For August gold, support is down at 1196.6 and with a close below 1183.3 is next. Resistance is first at 1219.6 and beyond that 1232.6. For September silver, support is first at 15.47 and below there at 15.05. Resistance is up at 16.14 and then at 16.60.