Thoughts from the Trading Desk
After the long Memorial Day weekend in the US, the markets came back today to a decidedly bearish tone across a variety of assets. Equities, precious metals, energy, and the euro were all in a sea of red today while the Vix index, a gauge of overall market volatility, closed up on the day nearly 16%. US economic data mildly beat expectations and encouraged participants to flock to the USD. The revision for April Durable Goods Orders came in better by a full 1% while consumer confidence and new homes sales impressed. The Dow Jones and S&P both closed down on the day by 1% and any safe haven bids for the precious metals were nowhere to be found in the face of broad market liquidation.
Gold finished right near the lows of the day and has near term support coming in at $1,180. Any rallies will likely be sold ahead of the convergence of the 100 and 200 day moving averages around $1,213. Silver somehow managed to tread water ahead of its 50 and 100 day moving averages today but the momentum is clearly down for the time being.
In yesterday’s Current Thoughts I said the following;
With the dollar perched above 96 on the Index now, it seems to be putting more pressure on the metals and this will continue unless the dollar moves below 96. Watch a break above 97 on the Dollar Index to get confirmation that gold may be headed to new lows. There is no earth shattering data coming till the next jobs report, and market makers may use this time to play havoc with gold, pushing it closer to those Nov. 5th lows of 2015. From there, gold can easily take out the $1,000 mark before settling towards a final low.
What is at conflict now is whether or now we break higher for the typical summer good months before the final smack down. Right now it doesn’t look good as the dollar moving higher, today past the 97 mark I indicated, gold could very well take the summer off. It has occurred before. Right now I would say the professionals are in charge and I for one don’t fight the professionals.
I have had a large list of the mining stocks break down today. This could be a tell tale sign of what is to come.
I have provided a glimpse of what has occurred the last couple trading days and my thoughts moving forward for the short term in an updated ETF Research Trading Analysis, current for today 5/26/2015.
You can find this research by clicking this link. https://buygoldandsilversafely.com/etf-research-trading-service/
We will be offering a Free Trial of the ETF Research Trading Analysis in the weeks ahead.
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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