Gold prices rallied to a six week high closing at 1275.3 basis December futures. For the week gold futures rallied $14.00 while September silver gained 24 cents to close at 1669.5. With the rally gold has pushed through and closed above all major moving averages as economic data sunk this week the Dollar while outside markets like energy soared as well. Prices were supported in early trading this morning by slightly downbeat U.S. GDP data and reports that North Korea fired a ballistic missile in what was described as an unusual late-night test. The U.S. dollar index fell on a combination of underwhelming U.S. economic data and political uncertainty, while global stock markets were also weak. While the Fed this week left rates unchanged as was expected, their statement following the announcement was seen as dovish as gold and silver scored their best gains of the week following the FOMC announcement. Gold also received some fortuitous demand news for a change from the world’s number two consumer China. China’s first half gold consumption for 2017 increased by ten percent according to GFMS (Gold Fields Mineral Services),with their output revised down ten percent. More importantly 2017 second half forecasts for Chinese gold consumption were revised higher. Gold was also given some safe haven demand boosts from the political chaos in Washington as the health care reform vote failed while chaos reigns within the Trump administration. Simply put, traders didn’t want to go home short in both precious metals and energy ahead of this weekend amid the re-emerging geopolitical mess with North Korea, and the political circus in Washington D.C. In my view seasonal buying has aided this rally as gold and silver performs best following the July 4th weekend up until Labor Day weekend.
Some of the major macro releases next week include latest employment figures — July’s ADP Employment Report is due on Wednesday and July’s non-farm payrolls are scheduled for Friday. Other notable U.S. reports include PMI Manufacturing Index, Factory Orders, ISM Non-Manufacturing Index and Trade Balance. Technical’s read like this for next week’s trade. For December gold, support is down first at 1253.2. A close below here and 1231.3 is next. Resistance sits up at 1287.0 and with a close over here 1298.9 is the next level up. For September silver, support is down at 1634.2 and with a close below 1599.1 is next. Resistance is up at 1692.7 and then up at 1716.1.
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.