Today was another mixed bag in the precious metals’ markets, with gold and platinum closing higher on the day, and silver and palladium trading lower. Over the last few weeks market participants have witnessed a decoupling of the precious metals, in which on many occasions, the individual precious metals do not move in tandem with each other.
Although typically gold and silver will both move lower, or higher on the day, in tandem. With The difference being the percentage of gains or losses seen on any given day, which will affect the gold-silver ratio.
Gold has had an extremely bullish week with the last three trading days resulting in pricing which contained a higher high, and a higher low than the previous day. Also, gold has closed higher than the previous close every day this week after breaking and closing above the key psychological level of $1300 per ounce on Monday. Today gold futures basis the most active June contract is currently trading up $3.70, and is fixed at $1312 per ounce.
Most importantly today’s close resulted in current pricing trading and closing above the 50-day moving average for the first time since March 27th. Today’s trading range resulted in an intraday high of $1314.70. This price point matches precisely with the .23% Fibonacci retracement. The data set used for this retracement begins mid-November of last year when gold was trading at $1196 per ounce, up until February 19 when gold hit the current yearly high of $1350 per ounce.
Technical studies indicate that a break above this level should lead to very little resistance in gold pricing until the recent high of $1324 which occurred on March 25th. Above that price point is $1330 and then $1350 per ounce. Our studies indicate that if gold is able to break above $1315, it could easily trade as high as $1330.
We also see solid support for gold at $1290, and the key psychological level of $1300. Based upon the multiple fundamental events currently creating bullish tailwinds for gold pricing it is quite feasible that gold will run at least to $1350 before finding any major resistance.
Wishing you as always, good trading,