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Trade Deficit News Briefly Lifts Precious Metals

Trade Deficit News Briefly Lifts Precious Metals
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Posted: 05-06-2015 10:36:00 AM

See how this week compares to last week in a new Market Report by Roy Friedman.

Last Wednesday, following weak economic data and a dovish FOMC statement, precious metals were unable to extend a rally that had finally broken above key resistance levels and sold off sharply on Thursday and Friday. This week has started off with a rally as renewed buzz about Greece’s problems and a continuation of weak economic data have supported our market. Yesterday, the closely watched U.S. trade deficit ballooned to a level not seen since March of 2008, which briefly pushed gold back to $1,200.00, but sellers were lurking and the balance of the day was spent trading in the mid $1,190.00s.  On the positive side, we have seen a noticeable increase in physical demand from Europe and Asia, which is supportive, but global interest rates continue to move higher as bonds sell-off and this is likely to weigh on gold.

Getting back to my original thought now, this Wednesday morning feels a lot like last Wednesday afternoon felt to me and my concern is if we do not see gold make a push above $1,200.00 today the market could be susceptible to another sharp fall in prices tomorrow or Friday. Silver, currently at $16.65, is trading constructively and could be the catalyst for a move higher as it trades above the 10, 50 and 100-day moving averages. Gold at $1,195.00 trades just above support at $1,192.75 (10-day average), and $1,190.50 (50 day average) while resistance looks formidable at $1,200.00 and $1,210.25 (100 day average).

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About The Author

Roy Friedman

This editorial has been prepared by Roy Friedman of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.

This editorial is republished by MCM with permission from Dillon Gage Metals. It is not intended, nor should it be taken, as investment advice. No warranty as to the accuracy or validity of comments made within this editorial is expressed or implied by MCM or its staff. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals.

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