As of 5:30 PM Eastern standard time, gold futures basis the most active April contract is trading $.70 higher and currently fixed at $1315.30. Although gold futures are exhibiting extremely fractional gains on the day, there is over a $10 differential from the lows achieved last night.
New York gold traders witnessed pricing trade to a two-week low as market forces drove the precious yellow metal down to today’s intraday low at $1304.70. There was however a fairly rapid recovery taking just about 40 minutes resulting in prices moving back to approximately $1314 per ounce.
Although current pricing is still creating a weekly decline, that decline is only about $2 to $3 with one more trading day to complete the week. That means that although current pricing is below the open on Monday, traders could easily move pricing into positive territory for the week on Friday.
Physical Gold Prices Surge Compared to the Fractional Gains in Futures
One interesting facet in gold today is the difference between the price change of physical gold when compared to gold futures. Although gold futures are only trading up approximately $.70 on the day, physical gold has had an impressive price advance of $6.40. This price increase is primarily the direct result of traders bidding physical gold higher by $5.35. Once we factor in fractional dollar weakness which has resulted in a price advance of $1.05, we get the current price of physical gold at $1312.30.
The dollar index is trading in essence unchanged, but fractionally lower on the day. Currently the index is fixed at 96.885, which is a net decline of -0.053 points or -0.05%. With gold futures currently up +0.04% it is easy to conclude that gains in gold futures are about equal with the decline of the dollar index.
According to MarketWatch positive and negative influences are in essence canceling out any real changes in gold futures. Concerns surrounding the current trade negotiations between the United States and China have put price pressure on the U.S. dollar. At the same time a more dovish federal reserve and economic data today displaying the largest monthly drop in retail sales in the past nine years fueled minor bullish sentiment.
On a technical basis gold continues to trade in a narrow and defined consolidation pattern with major support at $1300 and resistance at $1330. This current rally in gold has been composed of price spikes followed by periods of consolidation, if this trend continues we can expect gold to break above the current level of resistance.
Wishing you as always, good trading,