As noted on Friday’s report, gold and silver experienced an intraday reversal which most likely meant that both markets would experience follow through buying in the next few sessions. That is exactly what has occurred to start this week. December gold settled at 1293.8 and is currently up $18.90 for the week while silver settled up at 1720.5 and is up currently 41.5 cents. As gold and silver have experienced follow through, the Dollar has also moved lower from last Friday’s highs. This has aided precious metals in the interim while energies have gone bid to start the week as well. Tomorrow the market will get a look at the minutes from the last FOMC report which should provide the dollar with some support in my view as the Fed has become more hawkish in recent weeks. Geopolitical worries have ratcheted up another notch as well on reports U.S. President Donald Trump will stop at the North Korea-South Korea demilitarized zone to deliver a strong anti-North Korea speech, during his Asia trip next week. Also, U.S. Defense Secretary James Mattis reportedly told his Army officers to be ready, in case U.S.-North Korea negotiations fail. Also of concern in my view are reports or worries from the European Union due to its stock markets being seen as “shaky” regarding Catalonia possibly seceding from Spain. The Catalan regional president gave a speech Tuesday, in which he said it is his intention to at some point separate Catalonia from Spain, per the recent voter referendum. In short, a lower Dollar, geopolitical concerns and a technical reversal have pushed metals higher over the last 2.5 sessions. China is also back after a week-long holiday with physical buying that is anticipated to pick up again heading into November from both the Indians and Chinese.
Watch the Dollar’s reaction after the Fed minutes release tomorrow and then look to buy any dips into the weekend. With Trump in Asia next week, I don’t see much in the way of major selling in the metals markets until that trip is concluded. Just my opinion here, but here’s some technical levels to watch. For December gold, near term support sits at 1285.6. A close under and the 100 day is next at 1279.4 and then the weekly pivot number at 1274.2. Resistance is up at 1296.4, then the 50 day at 1299.6. A close over the 50 day moving average and the next level to the upside is 1317.1. For December silver, support sits at the 50 and 200 day at 17.14 and 17.135 respectively. A close below and the 100 day sits at 16.90. A close under 16.90 and 1668.5 is the next support level for the remainder of the week. Resistance is up at 17.26 and then up at 17.44.
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