The “Tru-ally “Affect - DJIA Breaks 19,000 and Gold Prices Remain Steady

November 22, 2016 - 5:10pm

 by Gary Wagner

Inasmuch as there is true uncertainty as a new US president takes office on January 20, the “Tru-ally” affect (Trump Rally) continues to add short-term optimism to US equities markets.

It is this short-term optimism that has partially fueled this current rally which has resulted in an all-time new record high for both the Dow Jones industrial average as well as the Standard & Poor’s 500.

For the first time in history, the Dow Jones industrial average has traded above 19,000. We continue to see a favorable risk on environment in which market sentiment believes that US equities as a whole will continue to gain value. Favorable economic reports, short-term optimism, and the upcoming presidential inauguration continue to weigh favorably on US equities.

This risk on environment coupled with a stronger US dollar has kept the precious metals in check with only modest gains or modest drawdowns evident in today’s trading. After taking a one day hiatus, the US dollar returned to rally mode trading back above 101 on the dollar index. As of this writing the US dollar index has traded to a high of 101.32, and is currently trading at 101.01, which in essence is unchanged on the day.

As of 5 PM EST Comex gold futures are trading up about $2.20 on the day at 1212 per ounce. We also see futures and spot prices coming into alignment as spot gold is currently trading at 1211.85  but with the net change of down $.25

Silver is currently trading higher on the day. As we have noted over the last couple of weeks, there seems to be a growing disconnection between gold and silver pricing. Comex silver futures are currently trading up about ten cents on the day at 1663.

Crude oil has traded in a tight and defined range with an intraday high at 49.20 and a low of 47.17. Crude oil in essence is trading unchanged at 48.46 as OPEC continues to meet in Vienna. Apparently, OPEC has deferred on any production agreement from Iran or Iraq, which has caused crude oil break from its recent rally and trade under pressure for the first time in a couple of weeks.

As we are quickly approaching the Thanksgiving holiday here in the United States we still have the Fed minutes which will become available tomorrow. Then following the Thanksgiving holiday, we can also look forward to the jobs report numbers which will come out next week.

So inasmuch as there is true uncertainty about our economic and financial outlook going into the next year, there seems to be a steadfast belief of better days ahead.

However, whether this trend will continue through the end of the year is still an unknown.

For those who would like a deeper analysis, I invite you to try our daily video newsletter. Simply use the link at the bottom of this report to sign up for a free trial.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

We are currently flat with no active trades in gold or silver.

Gold Market Forecast

Based upon recent activity and US dollar strength, the precious metals markets, specifically gold and silver, have been holding up quite well.

Gold for example has managed to trade above a 50% Fibonacci retracement for the better part of this week.

After gold prices fell from grace just following the conclusion of this month's presidential election, prices seem to be forming a base and finding technical support just above $1200 per ounce.

Whether gold prices find support at 1209 or 1169 (a 61% Fibonacci retracement), chart studies indicate that one of these price points will be a tentative bottom and supportive of gold prices.

Obviously until we have technical confirmation that a bottom is at hand and we have witnessed some sort of key reversal will we initiate our next trade.

Trending Markets Forecast

Although it might sound like the boy the cried wolf, I must announce that once again we have reached a historical landmark, the day that the Dow Jones industrial average went to a new historical record high above 19,000. Inasmuch as the new historical record high might be sounding like a broken record because of the multiple times we have done just that in recent time, the fact that we closed above 19,000 is truly historic.