I suppose if you were to describe gold’s performance this week resilience would come to mind. Despite the fact that the S&P and Nasdaq made new all time highs this week, gold continues to benefit from fund ands speculative bidding on dips. With the continued push higher above $1260.0 an ounce this week, technicians noticed that the 50 day day moving average crossed above the 200 day which is a bullish technical indicator. What is also telling is that despite the President being overseas, saber rattling from the administration over trade deals with European powers ignited foreign investment back into gold most notably from Germany according to the World Gold Council. Gold’s best gains for the week followed June option expiration Thursday where the overnight trade saw a $11.00 push higher while silver rallied twenty cents. August gold futures rallied $12.50 for the week to close at 1271.4 while July silver rallied .54 cents to 17.32.
Although the Federal Reserve’s minutes from their last meeting didn’t change investor sentiment regarding a June rate hike, the commentary from the Fed was seen as inflationary and for now put a floor under price at 1250, which was the low for the week basis August futures. Despite the stock rally which most times would halt gold from making any advance, the political and economic uneasiness that is in the new cycle has slowly prompted the speculative investor back into the precious metal sector. It seems for now that sentiment regarding gold in my view, is that one may not want to be bullish but definitely doesn’t want to be short this market. Next week’s holiday shortened week will be all about jobs with the monthly unemployment report out Friday. This news along with anything else that enters the market geo-politically.
My technical swing numbers for next week come in as follows. For August gold, support is down at 1257.4 and with a close below, 1243.4 is next. Resistance is up at 1278.9 and then up at 1286.4. For July silver Resistance is up 17.52 and with a close over 17.72. Support is down at 16.98 and then down at 16.64.
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