Gold Continues To Define A Narrow Trading Range

November 30, 2017 - 6:38pm

 by Gary Wagner

Although the recent action regarding gold would make it seem as though prices must have certainly declined during the month of November, this is not the case. Given that the price change from the beginning of the month to the last trading day of the month is narrow and defined, gold is headed toward its first monthly gain since August.

However, what has been most evident over the last couple of months in regards to gold is the narrow trading range which has been the defining characteristic of the precious yellow metal. In fact, according to Reuter's news service, gold has traded in the narrowest range in 12 years.

Given that gold has been under tremendous pressure since trading to its yearly high at $1361, it recently has been stuck in a trading range between $1260 on the support side and $1290 on the resistance side. That being said, the overall market pressure continues to be prevalently weighed to the bearish side.

Once again gold prices have fallen back, losing roughly 6/10 of a percent of value on the trading day. The most active December’s futures contract is currently fixed at $1270.20, which is a net loss of eight dollars on the day (-0.62%).

By analyzing the individual components of spot gold, we are able to gain a more detailed understanding of today’s price decline. According to the Kitco Gold Index (KGX), as of 4:30 PM Eastern standard time, spot gold is fixed at $1274.70, which is a net decline of $8.70 on the day. However U.S. dollar weakness today is actually providing a small amount of value to add roughly $3.60 per ounce. Once we factor in selling pressure in the market which has taken gold pricing $12.30 lower, we get the net price change in which gold pricing has lost $8.70 on the day.

A Risk-On Market Sentiment Continues To Define the Flow of Investment Dollars

U.S. equities continued their remarkable performance with today’s upside rally resulting in the major stock indexes trading to new all-time record highs. The Dow Jones industrial average rose in triple digits today, up 331 points and gaining 1.39% to close at 24,272.35 for a new all-time record close.

The S&P 500 gained 8/10 of a percent on the day. Closing at 2647.58, this new all-time record high was achieved as the market gained over 21 points on the day.

Although the NASDAQ composite closed slightly lower than the record high achieved earlier this week, it is still trading at a record level at least on a weekly basis. This unprecedented and remarkable move in equities has and continues to exert extreme bearish pressure both gold and silver pricing.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Sentiment Indicator:

Gold Forecast: Proper Action

We are flat with no active trades

Gold Market Forecast

Gold prices broke below a critical trend line (support) today, and is now close to the 200-day Moving Average. A break below that price would be a very bearish indicator.