Gold Inches Closer to $1300 Per Ounce

In pre-holiday trading, gold prices continue to hold steady while inching closer and closer to $1300 per ounce. In an interview with the Wall Street Journal, statements made yesterday by President Trump put dramatic pressure on the U.S. dollar.

As reported by Reuters, “President Donald Trump said on Wednesday that the dollar was "getting too strong" and would eventually hurt the U.S. economy, even as he said he would like to see interest rates stay low, the Wall Street Journal reported. "I think our dollar is getting too strong, and partially that's my fault because people have confidence in me. But that’s hurting - that will hurt ultimately." This, of course, moved gold prices substantially higher. However, the opposite was true for today’s price action.

U.S. Dollar Surge Curtails Continuation of Rising Gold Price

Today’s military action by the United States in Afghanistan moved the U.S. dollar off its low of 100.02, which was today’s opening price. It is currently trading approximately 4/10 of a percent higher at 100.455. This dollar strength curtailed any real upside move in gold.

Spot gold is currently trading at 1286.50, as of 4 o’clock Eastern Standard Time, showing a net change of $-.10 on the day. However, a closer look defines how powerful the U.S. dollar was today. The Kitco Gold Index (KGX) reveals that a strengthening U.S. dollar accounted for -5.60. The +5.70 upside move in gold was created through normal trading.

On a technical basis, the midweek surge in gold pushed current pricing above the former resistance level of 1260. Continued buying on the following day confirmed this level of resistance has now most likely become a critical support level. More than that this week certainly contained a historical event, as gold prices broke through their 200-day moving average on Tuesday.

The last time gold prices effectively traded above its 200-day moving average for any extended period was January 2016. Gold prices managed to trade above the 200-day moving average up until October of last year. At that point, gold prices broke below before going back above. Following the election of Donald Trump in November of last year, gold prices went back below the average. From then until Tuesday of this week, gold prices had been trading below this benchmark technical study.

As we enter an extended three-day holiday weekend, in honor of Good Friday, the markets will be closed tomorrow. It is my hope that this holiday season will remind us all of our inherent desire for peace and goodwill towards all.

Wishing you as always, good trading,