Gold prices drifted lower in afternoon trading as equities traded significantly higher. A higher greenback today dulled gold’s appeal as comments from Fed governor Fisher pointed to two more rate hikes in 2017. The comments at least for today soothed investor fears over a lame duck Trump Presidency as failure to repeal and replace Obamacare created some nervousness in the market late last week. Those fears spilled over yesterday and pushed both Gold and Silver to new four week highs. The metals market looks to trade inverse of the stock market given the heightened perception of sizable tax cuts coming for the business sector. The anticipation of these cuts occurring especially following the health care debacle, will drive stocks going forward until we reach earnings season in mid April. Aside from geo-political tensions arising near term, I look for Gold to potentially move lower and experience some back and fill if the Trump trade stays intact and equities continue to rally. Remember we are heading into month and quarter end where trend and index following funds are still long the market,. Given the timeframe, don’t be surprised to see some profit taking.
Technical levels read like this for the remainder of the week for June Gold. Support comes in first at 1243.9 and then 1231.4. Resistance comes in first at 1258.8 and then 1271.3.
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Sean Lusk
Director Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
slusk@walshtrading.com
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Walsh Trading
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Chicago, Il 60604