Friday’s job number short-covering rally seems to be short lived. Gold has comfortably set in its new trading range between $1,070 and $1,090. For my technical enthusiasts, $1068.20 support and then $1,052.30 will be the levels to look for. And of course to the upside, nothing between here and $1,100 is worth getting excited over.
Silver riding the back of Friday’s Gold rally seems to be overbought here. Wall Street traders continue to ignore the physical demand stories from the retail markets and are comfortable playing the market here from the short side.
With just a week or so before the FED meeting, gold traders seemed to have adopted a “wait and see attitude” before taking on new positions. For the traders who have to play to overcome boredom, a small short position is in order just to keep their sanity.
Even after Friday’s rally, the majority of the traders I spoke with still have a bearish attitude in the gold market.
Crude below 39 dollars and the Euro just above the 108 area seems to have little impact on precious metals pricing this morning. If you want to get a sense of where the price of gold is headed, most dealers say they like to keep a close eye on the Euro and the dollar index markets.
For those folks who like to follow the ETF market, gold redemptions continue to fall near the 2015 lows at 1,486 tons. Silver ETF holdings seem to have steadied of late at 18,934 tons as of the end of last week.
The question remains, where is the bottom in the platinum and palladium markets? Most traders are hesitant to put a bid in these markets as platinum and palladium miners just keep holding their breath hoping for some stabilization in the price.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.