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With a steady dollar index and consolidating bond yields, the price of Gold and Silver is seen this morning in positive territory.
At the time of this report, February gold is trading right in the middle of the most recent trading range between $1,160 and $1,190. So I think it’s safe to say that all the negative news effecting gold and silver prices of late seems to have been absorbed by the market and in turn the market seems to be building a base for higher prices to come.
In order for the market to trade higher, my technical friends remind me of the previous level of support at $1,172 in the February gold contract. We must hold this level otherwise they indicate a testing of the most recent low in the February contract at $1,158 will be in jeopardy.
Everyone seems to be happy with silver back around the $17.00 level as indicated by the small inflows overnight into the Silver ETFs. The Gold ETFs still seeing continued redemptions and I expect that will not change until the market heads higher or the Fed meeting results are released next week.
The industrial metals to include Silver, Platinum and Palladium and the base group of metals should fair better under the Trump administration as infrastructure seems to be on the top of his list in his first 100 days in office.
A reminder, in the event that gold rallies from here, the level of resistance is $1,192 in the February contact.
Some Wall Street traders I spoke with this morning agree with the technical levels. Matter of fact one guy indicated that these are the exact numbers he has plugged into his algorithm platform. I guess with the lack of any new news in the market place, working off the charts seems to be the only way to trade Gold and Silver today.
Author Name: Walter Pehowich
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