From the Trading Desk
The headlines surrounding tensions between North Korea and the United States continue to increase in frequency and severity. Up until this week, the back-and-forth intimidation’s from North Korean dictator Kim Jong-un and US President Trump occurred, in general, a few weeks apart. Now they’re occurring multiple times a day. Earlier in the week, North Korean officials declared that the US “would suffer a shameful defeat and final doom” if it “persists in extreme military adventure, sanctions and pressure”. The statement went on to say that officials “vowed to mercilessly wipe out the provocateurs making desperate efforts to stifle” North Korea. Last night, North Korea said it would have a plan ready within days to fire four missiles near the US Pacific territory of Guam. President Trump responded to these threats in kind earlier in the week by saying that North Korea “will be met with a fire and fury like the world has never seen”. He reiterated that point today by saying “maybe it wasn’t tough enough”. US Defense Secretary James Mattis backed up Trump’s rhetoric yesterday when he issued an ultimatum to North Korea to “cease any consideration of actions that would lead to the end of its regime and destruction of its people”.
The situation with North Korea is escalating rapidly and gold has reacted accordingly over the last three days. After holding support at the 50 and 100 day moving averages in the low $1,250s on Tuesday, gold has shot up and looks poised to test the year’s highs, and the double top, at just under $1,300. There should be plenty of action around $1,300; if spots are triggered and it breaks through, the next area of resistance is $1,350. Silver is still lagging but has even more potential than gold to make a big mover higher considering that speculative Comex positions are still quite short. A break of $1,300 in gold could allow silver to test its highs of the year at $18.50.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.