I said in my last Current Thoughts that we will know later in the week if we have bottomed or not. Today might have been that day. The dollar was up once again and gold broke below 1220 but ended the day over 1220 to 1222 as I type with a rumor of another North Korean missile test coming soon. And yes, gold did move up with fear today as the VIX started to move up with the N. Korean missile launch rumor.
Right now below 1220 we should be looking for lower gold prices and over 1230 the bottom should be confirmed. Where do I lean? I lean that we have bottomed. for now. but we need the dollar to start falling more or all bets are off. Let’s see what the Trading Desk has to say;
From the Trading Desk
On Sunday night, the market’s breathed a sigh of relief as Emmanuel Macron easily beat the right-wing populist and nationalist candidate Marine Le Pen in the French presidential election. With Japan returning from Golden week to find much lower gold prices, gold received an initial bump up on Sunday evening trading. The pop higher was short lived though as the Macron victory encouraged broader market selling. Geopolitical tensions, in general, have subsided substantially in the last few weeks (especially with North Korea) and gold and silver have felt the pain of it as a consequence. Gold is hovering around two month lows and looks poised to test psychological support at $1,200. Since mid-April, silver has fallen over 13% and lost over $2.50. CFTC data last week showed that speculative net length on the Comex was cut massively. In one week’s time, gross speculative longs fell by 86.5 million ounces to 645 million ounces and shorts increased by 21 million ounces to 212 million ounces, the highest level this year. After losing so much ground so quickly, silver should find some support around the $16 handle.
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
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