From the Trading Desk
Yesterday’s Federal Open Market Committee minutes failed to cause a stir in the precious metals markets. According to the minutes, most participants think it is unlikely that economic data in June will provide satisfactory evidence to raise the target range for the federal funds rate. Notably, dollar strength may have a greater and longer lasting adverse effect on exports than previously anticipated. Gold finished out the trading day after the minutes in the exact same way it started it, lethargically and still in a tight range.
Today, a mixed bag of US economic data encouraged market participants to trade gold with a bearish bias. Gold ETFs continue to shed ounces and net outflows for the month of May are now in excess of 700,000 ounces. This isn’t that surprising given that US equities are challenging all-time highs. The 100 and 200 day moving averages are starting to converge in the $1,212 – $1,215 area which is also, not coincidentally, the highs from yesterday and today. This area is certainly near term resistance while bids are waiting ahead of $1,200.
Another trending day and not much going on. Dollar up a little. If dollar was to break 95 now, I would lean long gold. If it breaks 96, I would lean short gold. Until those times I would look for data tomorrow for direction. It’s a holiday weekend so market makers may just go home early to expand their weekend. I suggest you do too! Gold will still be there on Monday!
Have a good Memorial Day! Next report is on Monday.
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About Doug EberhardtDoug 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
Disclosure:
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.