From the Trading Desk
In the overnight session, the Shanghai stock exchange had its biggest drop in four months (6.5%) after it was disclosed that a Chinese sovereign fund reduced investments in the biggest state owned banks for the first time. This was the biggest equity sell off since China tightened up margin trading rules in mid-January. The bearish Asian equity tone carried over to the US session where the Dow and S&P finished mildly lower. The precious metals seemed to mostly ignore the fireworks in Asian equities and meandered through today’s session in uninspiring ranges though. Gold briefly tested support at $1,180 but bids lifted it to close around unchanged as the day wore on. Silver only had a 20 cent range and moved lower for the fourth day in a row. The path of least resistance is lower with initial support coming in at $16.50.
The US Mint announced today that it has lifted the imposed silver eagle allocation process for authorized distributors. This means that there is no longer a cap on the maximum amount of silver eagles a distributor can order. The physical markets have not been great recently and this US Mint announcement is a further reinforcement of lackluster demand.
I have been putting more emphasis on the dollar action recently and it hasn’t let us down from a micro point of view. After moving lower pre-market and into the open, gold managed a little move higher and the mining stocks rebounded a bit with a dollar decline below 97. Still keep an eye on this level for gold’s next move, but also keep in mind that from a micro point of view, the dollar and gold don’t always trade opposite each other.
I wrote an exclusive article on Seeking Alpha and you loyal readers will get first glimpse of it before I put it on the main blog. It will give you my thoughts on where we are now with the precious metals market.
I have provided one more day of the ETF Research Trading Analysis so you can see how we are doing with our calls this week. Every week we get some action somewhere and it is playable for some good trades. We will announce the Free Trial soon to our service. Click this link to see the latest trade recommendations and results the last 3 trading sessions;
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.