From the Trading Desk
In the overnight session, a European Central Bank board member said that the central bank would front load its purchases in bond buying to May and June. The accelerated quantitative easing program caused the euro to lose ground against the USD. As the New York session began, the euro tumbled even more with the release of strong US economic data. New construction on homes surged 20% in April, the fastest increase since late 2007. The positive housing data encouraged participants that the US economy will continue to recover after a slow first quarter.
Gold had been consolidating nicely in the $1,220 area but with the USD gaining over 1% against a basket of currencies today, bids evaporated and the yellow metal made a low on the day of $1,205.50. Immediate support is coming in at $1,200 while rallies will now likely be sold ahead of yesterday’s high of $1,232.50. Silver sold off even more than gold did and finished on the day down 3.50%. It dipped below its 200 day moving average at $17 at one point but finished the trading day above this key level.
The mining stocks broke down today along with gold and silver as the dollar rebounded after comments out of the ECB that were Euro negative. I said yesterday when all else fails, look to the dollar for answers and today we saw the two trade their typical inverse pattern of each other.
Keep an eye on the Fed minutes release tomorrow afternoon EST for where we are headed next. Expect volatility in everything.
There is a certain individual who calls himself on his Linkedin page the “World’s Leading Gold Analyst and Market Forecaster.” Last year in July this person, Larry Edelson, called a bottom in gold and gold mining stocks and the bottom fell out through Nov. 5th. He admitted he was wrong and said gold will fall sometime in August. Meanwhile the mining stocks got hammered.
This year hasn’t been that great for Edelson as year to date he is down 35.80% with his calls and month to date down 17.69%.
Just last week I gave out two calls for the ETF Research Trading Analysis that earned double digits (as much as 15% or 20%). I had member take their profit rather than hold on and hope. I don’t write about this to brag, but to point out that I feel strongly about what I know that can help you make money. In almost 30 years of being in the financial services industry, I have learned a thing or two and if you read what I write about gold and silver, you know my calls haven’t been too bad. We will be rolling out a free trial of this service for those of you who don’t want to spend the $300 for 3 months to check it out. I’m not sure when that will be ready, but my guess is in another month. My goal isn’t to beat the world’s leading gold analyst and market forecaster. My goal is to lead you to great profits.
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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.