America faces uncertain times
Today both gold futures, and spot gold prices closed in opposite directions. Gold futures basis the most active December 2020 Comex contract gained $1.10 in trading today and is currently fixed at $1927.30. Concurrently spot gold closed off by $7.50 and is currently fixed at $1921.90.
This differential between spot and futures pricing might have to do with the fact that it seems highly unlikely that the government will be able to come to an agreement on a fiscal stimulus bill prior to the election. There is a defined stalemate between President Trump, House Speaker Nancy Pelosi and the Senate Majority Leader Mitch McConnell.
Last week President Trump through a series of tweets briefly spoke about his hopes for and aid package prior to the election and urged Congress to approve more money for the unemployed and companies most hurt by the coronavirus pandemic.
However, his remarks were not taken to heart by either the House or the Senate.
Both Senate Majority Leader Mitch McConnell, and House Speaker Nancy Pelosi have both declined to support the president in regards to agreeing on a fiscal stimulus package.
According to MarketWatch, “Pelosi appears to be betting on Democrats winning the presidency and is unlikely to budge unless the Trump White House agrees to most of her party’s demands. McConnell has said the two parties remain too far apart to strike a deal with the election so close. Republicans in the Senate prefer a smaller bill that’s more narrowly tailored.”
There is also much uncertainty regarding the upcoming presidential election. Currently many polls indicate that former Vice President Joe Biden is in the lead.
On a technical basis the fact that both spot gold and gold futures closed above $1920 is significant. This price point was the former all-time record high that occurred in the middle of 2011. Therefore, it becomes a logical area to become a level of support. The next level of support below that is $1900, and major support currently resides at $1860.
Resistance in gold futures is currently at $1941 per ounce, this corresponds to the 23% Fibonacci retracement level. Above that price point is ultimate resistance at $2000 per ounce.
There is much uncertainty in regards to the outcome of the presidential election. Also the current pandemic which continues to see certain countries and parts of the United States spiking looking very much like a second wave of infections. These two factors will certainly continue to be supportive of the safe haven asset class, i.e. gold
Wishing you as always, good trading and good health,
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Gold Forecast: Proper Action
We sent out a trade alert on 09/28 and 09/29. We raised stops on Friday October 9.
Maintain long December gold at $1890. Move stop to $1909.30 from $1851.10
Maintain long December silver at $23.95. Move stop to $24.50 from $22.45
Maintain long forex gold at $1883.68. Move stop to $1907 from $1847
Maintain long GLD ETF at $178.03. Maintain stop to $$179.80 from $172.03
Maintain long SLV ETF at $22.66. Move stop to $22.03 from $20.03
Long GLD @ $183.91- stop hit @ $178.50 for a loss of $5.41 per share
Long SLV @ $ 26.33 - stop hit @ $23.53 for a loss of $2.80 per share
Long Forex gold (XAU A0-FX) @ $1939.00 - Stop hit @ $1944.80 for a profit of $5.80 per ounce
Long December silver @ $27.39.Stop hit @ $27.80 for a profit of $2050 per contract
Long forex gold @ $1948.55.Stop hit @ $1955 for a profit of $6.45 per ounce
Long GLD @ $183.57.Stop hit @ $184.36 for a profit of .79 per share
Long SLV @ $25.10.Stop hit @ $25.75 for a profit of .65 per share
Long December Gold at $1955.50. Our stop was hit @ $1979 for a profit of $2350 per contract
Long Forex Gold at $1947. Our stop was hit @ $1967,52 for a profit of $20.52 per Ounce
Bought GLD @ $166.74. Our stop was hit @ $$183.00 for a profit of $16.87 per share.
Bought SLV @ $18.00 Our stop was hit @ $23.80 for a profit of $5.80 per share.
Long December gold at $1997, we covered the trade @ $2035 for a profit of $3800 per contract
Long Forex gold at $1977, we covered the trade @ $2017 for a profit of $40.00 per ounce
Gold Market Forecast
With it just under three weeks until the presidential election is held in America, there is much uncertainty as to who will be the president in January of next year. That coupled with rising cases of the coronavirus in certain states as well as countries has the potential for more economic contraction. Lastly it seems almost a certainty that there will not be a fiscal stimulus aid package passed prior to the election. All of these uncertain factors have the net effect of being highly supportive of gold pricing.
On today’s video report we will look at our current trades in both gold and silver and address our upside target as we have moved our stops and they will remain where they are.