Gold Consolidates and Holds Steady In Light Of Soaring Equities

April 20, 2017 - 6:02pm

 by Gary Wagner

Gold prices are holding steady considering the dynamic upside swing witnessed today in U.S. equities. The Dow Jones Industrial Average is trading a full percentage point higher on the day. As of 2:55 Eastern Standard Time it is trading at 20,611, up 207 points on the day.

Considering that the all-time high with the Dow is approximately 21,200, today’s impressive rally does not challenge that record. However, it’s a different story when we look at the NASDAQ index. The NASDAQ composite is currently trading at 5922.39, which is a 59.60 gain (+1.01 %). If the index closes here or higher, market participants will witness this index closing at a new record high.

It is quite obvious that this risk-on environment does not favor safe haven assets such as gold. Regardless, the precious metals complex is holding steady in regards to gold, with strong upside price advances in both platinum and palladium. Silver is the only precious metal to close lower on the day.

Palladium and Platinum Prices Move Towards Parity

Palladium gained $26 today to close at 802, a 3.35% increase. Platinum gained 1.3% on the day, a $12 gain, to close at $977. There is now only a $175 difference between the two precious metals. Although this occurrence is unusual, we did see price parity between platinum and palladium in November of last year. Both platinum and palladium traded sharply higher today. This comes as a net result of U.S. equities in the tech sector rallying to new record highs.

Mixed Close for Gold and Silver

One interesting aspect of trading today was the fact that silver, which is a highly used precious metal in the industry, did not rally along with platinum and palladium. Rather, silver sold off in trading with the active May futures contract losing almost $.16, closing just above $18 per ounce. Spot gold did manage to eke out a fractional gain of two dollars, currently trading at $1281.44. Gold futures closed unchanged on the day and are currently trading at 1283.40.

Market participants are still wary and cautious about current geopolitical concerns. However, at least for today, the risk-on asset class is certainly being favored over safe haven assets.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Sentiment Indicator:

Gold Forecast: Proper Action

Last Tuesday (April 11)  we sent out a trade alert:  Major breakout above resistance. June gold up 19 dollars at 1273. Buy gold at market (1273 current). Stop under 1260

Yesterday  morning we raised our stop and sent a trade alert to that effect.

Maintain long gold at 1273. Maintain Stop below 1278-1279  (Current 1281.50)

Low today was 1278, so we pulled profits as our stop was hit

In @ 1273 out @ 1278 for a profit of $5.00 or $500 per contract

Gold Market Forecast

In interesting mix in the precious metals markets with silver closing under pressure, and gold closing unchanged on the day. Given the extremely strong US equities markets the fact that gold prices held their own is significant, it indicates that gold is currently consolidating just under recent highs, but above the current support level at 1260.