From the Trading Desk
Gold closed today capping its best three month performance in over 25 years. The last time gold exhibited quarterly gains of more than 15% was Q3 of 1990! Financial turmoil across a variety of assets was the overarching theme this past quarter and the safe haven allure of gold proved to be an attractive calling to investors. USD weakness overnight allowed gold to extend gains up to $1,240 but quarter end mining sales sent gold lower during the US trading session. Resistance remains in the $1,240 – $1,245 range while support is at the double bottom of $1,223. Silver held support for the third day in a row at its 50 day moving average but ultimately failed to sustain gains over $15.50 once gold rolled over.
We’ve had quite a move down in the dollar but gold doesn’t seem to want to explode higher. A push below 94 on the Dollar Index may do the trick. It seems poised for this and gold poised to move higher with silver. Any bounce in the dollar though and this range bound movement is all we are seeing till we break one way or the other.
I really want to play closer attention to silver here as a move over $16 and it can lead gold higher, even though my thoughts haven’t changed that silver will trade down to the $12 mark later this year. When will it get there is what many ask me, and I don’t really think it matters unless someone is trading options or something. The data I read tells me it will get there. Watch for that break below $15 as your key area for the next leg down. For now I want to see if there is any good momentum left in the metals to drive them higher and with a lower dollar we just may get it.
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
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.