From the Trading Desk
At the European Central Bank meeting today, key interest rates and the existing 1.5 trillion euro monetary stimulus program were left untouched. In ECB President Mario Draghi’s commentary, the door was left open for further stimulus measures to be considered at the next meeting should the central bank deem them necessary. The euro tanked against the USD in the wake of Draghi’s remarks and gold was brought down with it. The US equity market started off today ripping higher and this added further pressure to gold. As the US equity market started to lose steam and sell off from the highs though, gold was able to attract bids and moved back up to the $1,100 area. The 100 day moving average at $1,106.50 has capped gold perfectly twice over the last two weeks and this is the big near term resistance level to watch. Silver has failed for three days in a row to break above $14.20. This level represents the top of its recent range while $13.75 is support.
Gold fell early on today and fell even more with the spike in the dollar after ECB President Mario Draghi let it be known that they will do more QE in March. But then the dollar fell the rest of the day and gold took off to the 1100 resistance mark again where it stayed most of the day. Silver is still hovering around its resistance level at 14.10 too.
This range bound moves in gold and silver are boring to sit through but we will break one way or the other soon enough. The dollar will be your key in knowing which direction but take at look at this confusing intra-day chart of the dollar. It doesn’t even know what it wants to do.
That 99.11 mark seems to be the over under for gold. Buy if under short if over. But really the dollar needs to get under 98.90 for me to jump on board for a good trade long. I say trade because I am not yet convinced we are taking off with gold.
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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.