Gold | The Gold Forecast

Gold

MOST RECENT REPORT:

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:

Archived: August 27, 2020 - 6:55pm, Daily Report: August 27, 2020 - 6:55pm

Today traders witnessed one of the more volatile trading sessions, trading in double digits lower, double digits higher and closing lower under pressure. Today marked the beginning of the annual Economic Symposium sponsored by the Kansas City Central Bank. Due to the pandemic the symposium which is usually held in Jackson Hole, Wyoming was a virtual event. Prior to the event the Federal Reserve made... View report

Archived: August 26, 2020 - 6:43pm, Daily Report: August 26, 2020 - 6:43pm

According to Wikipedia, “The cobra effect occurs when an attempted solution to a problem makes the problem worse, as a type of unintended consequence. The term is used to illustrate the causes of incorrect stimulation in economy and politics.” The term comes from a story that references an attempt by the British government in India to reduce the number of deadly cobras. They offered a bounty for every... View report

Archived: August 25, 2020 - 5:16pm, Daily Report: August 25, 2020 - 5:16pm

It seems as though traders and market participants are favoring the risk on asset class, even during a global pandemic which has truly been at the root of economic contractions in countries worldwide. Overseas global stock markets were higher today, and the Standard & Poor’s 500 is currently trading at an all-time record high. Yesterday’s close in the Standard & Poor’s matched very closely to the... View report