Dow to new record Highs, as gold recovers off lows
Gold futures recovered after trading to a low last night of $1449.60. As of 4 PM EST the most active December contract is currently fixed at $1462.10, putting it up $5.20 on the day. Silver is also trading higher on the day, currently up 1.12%, which is a net gain of $0.18, and is currently fixed at $17.07.
This all-in light of the fact that U.S. equities continue to trade higher. The Dow Jones industrial average closed at a new all-time record high for the second consecutive day. Yesterday the Dow gained approximately 190 points taking it over a key psychological number at 28,000, only to be followed by a 54.33-point gain today taking the Dow to 20,120.93. The optimism in U.S. equities have been spurred by strong earnings reports as well as optimism on a brisk holiday season.
The U.S. dollar had little effect as it closed in essence unchanged. Currently the dollar index is fixed at 98.16 which is a net decline of 0.08% on the day.
Based on the most recent data which indicated that U.S consumer confidence fell for the fourth month in a row (during November), which moved the consumer confidence index down to 125.5 from a revised 126.1 in October, the overall picture of the U.S. economy still looks healthy this according to a report in MarketWatch.
Yesterday Chairman Jerome Powell spoke to the greater Providence (Rhode Island) Chamber of Commerce. His comments laid out in optimistic view assessment of the U.S. economy. He said that he expected low inflation to continue indicating no need to raise interest rates “anytime soon”. He also said that, “with unemployment near a 50-year low of 3.6%, there’s still plenty of room for wages to rise and for more Americans to join the workforce.”
In an interview with MarketWatch, Phil Flynn senior market analyst at The price Futures Group in Chicago said, “Consumers are feeling pretty good, which bodes well for the holidays and should be good for sales,”. Also stating, “But the biggest negative that we’ve see on metals this week,” has said, has been optimism over a partial agreement to resolve the U.S. and China trade dispute. “But having said that, we still don’t have a deal.”
MarketWatch also reported optimism in that there could be progress in completing the “phase one” agreement this came in the form of an announcement that Chinese officials and U.S. trade negotiators have agreed to talk on a preliminary deal for resolving the terror for between the United States and China.
The next move in gold will be based upon the outcome of these talks and whether the United States and China can reach an interim agreement and a phase one document which both sides will sign.
Wishing you as always, good trading,
This report is now free and publicly available to everyone
Gold Forecast: Proper Action
Gold Market Forecast
In light of record high in US equities today, gold managed to recover off of the lows hit this morning at $1449 per ounce. What that tells me is that there are some traders that believe these new highs could be indicating a potential top in the market and are allocating part of their portfolio capital into the safe haven asset class as insurance against a possible downside move in US equities.
That being said, US equities have been moving higher on strong economic data as well as low interest rates by the federal reserve. Recent statements by Chairman Powell indicate that he does not expect to raise rates anytime soon which is a highly constructive undertone for both US equities and gold. The key is whether or not gold can hold a critical support level at $1453 per ounce.