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Will gold prices hold above the 100-day moving average? – Part two

September 28, 2020 - 5:41pm by Gary Wagner

On Friday, September 25 we spoke about the fact that gold had plunged below its 50-day moving average one week prior. Last Thursday and Friday the intraday lows took gold pricing just above the 100-day moving average. The fact that gold prices managed to hold above this key level indicates that on a technical basis there is real support for gold at approximately $1850 per ounce.

Now for a third consecutive trading day, gold prices traded to, but not below this key indicator of intermediate market sentiment. Today’s action in both U.S. equities and gold pricing is a polar opposite of what traders observed a week ago Monday (September 21) when gold futures opened at $1957 and closed at $1910.

As of 4:40 PM EST gold futures basis, the most active December contract is currently fixed at $1886.20, after factoring in today’s gain of $19.90 (+ 1.07%). However, it is the intraday low that warrants our attention. Currently, the 100-day moving average is fixed at $1850.40, and today gold traded to a low of $1851.10 less than one dollar above that average.

Dollar weakness today provided tailwinds contributing a little under one-third of today’s advance in gold futures and spot pricing. According to the KGX (Kitco gold index), spot gold is currently fixed at $1881.10, which is a net gain of $19.90. On closer inspection dollar weakness resulted in a gain of $5.60 per ounce, and a strong buying bias resulted in a net gain of $14.30 on the day.

It is important to acknowledge two upcoming events in the United States that could have an enormous impact on gold prices this week. The first is the presidential debate which will be held tomorrow and secondly is the U.S Labor Department’s jobs report which will be released on Friday. Concurrently there are increased tensions between the United States and China, as well as a stalemate with no deal between the United Kingdom and the European Union in regards to Brexit.

These factors and events could be highly supportive of gold pricing. There is absolute uncertainty as to the outcome of tomorrow’s presidential debates. Uncertainty continues to be the fuel that could reignite gold pricing this week, and as such could take the precious yellow metal’s pricing higher.

Wishing you as always good trading and good health,

Gary S. Wagner - Executive Producer

Previous Reports:

Daily Report: September 22, 2020 - 6:35pm

Global concerns about the increase of new cases of the novel coronavirus in Europe as well as the United States have had a dramatic impact on both U.S. equities and gold yesterday. Both equities as well as gold were sharply lower in trading yesterday. While equities in the United States recovered today, gold pricing on the other hand, continued to decline. The recent uptick in Covid-19 infections has... View report

Daily Report: September 21, 2020 - 6:35pm

As of 4:00 PM EST the equities markets are closing for the day and still settling. Today’s market action can best be described as brutal, with all three major indices and the entire precious metals complex trading dramatically lower. Currently the Dow Jones industrial average is trading 510 points lower, and currently fixed at 27,147.24. The Dow was down well over 800 points before slightly recovering in... View report

Weekly Report: September 18, 2020 - 6:57pm

Over the last few days, we have been focusing upon the FOMC meeting which concluded on Wednesday of this week. We have spoken about how recent changes in the monetary policy of the Federal Reserve have had an impact on gold pricing. The most important take away from the statement released by the Federal Reserve, and the press conference held by Chairman Jerome Powell was that the Fed intends to keep... View report