From the Trading Desk
Since failing multiple times at its 200 day moving average, gold has trended lower and has fallen in its last four consecutive trading sessions. Fed rhetoric from multiple officials is pointing towards the increased likelihood of a rate hike next week. The combination of a technical failure at the 200 day moving average plus this chatter has weighed on gold and the rest of the precious metals complex. Near term support is coming in at the convergence of the 100 and 50 day moving averages around $1,211. The recent ETF trend has shifted and there has been 500,000 toz of redemptions since last Friday. Comex longs are at three month highs though, as of CFTC data to February 28th, but these longs will be tested with a further move south. Silver Comex longs are at highs not seen since August of 2016 so this $1 drop in price we’ve seen over the last week is an understandable correction. Physical demand in the US for fabricated products remains historically weak, even with the drop in price. This is best exemplified by US Mint sales figures. This past February, the US Mint sold 1.215 million silver eagles. In February of 2016, they sold 4.782 million silver eagles. This is a staggering drop in demand of 3.567 million ounces, or 75% off from the same period last year.
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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.